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 fiscal year ended December 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Registrant; State of
Incorporation or I.R.S. Employer
Commission Organization; Address; Identification
File Number and Telephone Number Number
- ------------ ---------------------- ---------------
1-6564 NEW ENGLAND POWER COMPANY 04-1663070
(A Massachusetts corporation)
25 Research Drive
Westborough, Massachusetts 01582
Telephone: 508-389-2000
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.
(X) Yes ( ) 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. (X)
Aggregate market value
of the voting stock Number of shares of
held by nonaffiliates common stock outstanding
of the registrant at of the registrant at
March 15, 2000 March 15, 2000
---------------------- ------------------------
New England $1,285,104 3,619,896($20 par value)
Power Company
Documents Incorporated by Reference
Part of Form 10-K into which
Description document is incorporated
- ---------------------------------- ----------------------------
Portions of New England Power Company Parts I and II
Annual Report to Shareholders for the
year ended December 31, 1999 as set
forth in Parts I and II
TABLE OF CONTENTS
PAGE
GLOSSARY OF TERMS.......................................... iii
FORWARD LOOKING INFORMATION................................ v
PART I
ITEM 1. BUSINESS............................................ 1
THE COMPANY................................................. 1
Merger Agreement with National Grid ................... 1
Employees.............................................. 2
ELECTRIC UTILITY OPERATIONS................................. 2
Industry Restructuring................................. 2
Accounting Implications............................. 2
Overview of Financial Results....................... 2
Year 2000 Disclosure................................... 2
Eastern Utilities Associates Merger.................... 2
Transmission and Nuclear Generation Business........... 3
Description of Business............................. 3
Rates............................................... 3
Standard Offer Service.............................. 5
Operating Revenues.................................. 6
Electric Utility Properties............................ 7
Transmission Properties............................. 7
Interconnection with Quebec ........................ 8
Nuclear Generation Properties....................... 8
Nuclear Units..................................... 9
Purchased Power Transfer Agreement................ 14
Regulatory and Environmental Matters................... 15
Regulation.......................................... 15
Environmental Requirements.......................... 15
Construction and Financing............................. 16
EXECUTIVE OFFICERS.......................................... 19
ITEM 2. PROPERTIES.......................................... 20
ITEM 3. LEGAL PROCEEDINGS................................... 20
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS................................................ 21
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED SECURITY HOLDER MATTERS........................ 21
ITEM 6. SELECTED FINANCIAL DATA............................. 21
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.................... 22
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK............................................ 22
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......... 22
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.................... 22
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT............................................. 22
ITEM 11. EXECUTIVE COMPENSATION............................ 24
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT......................................... 33
PART IV
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.... 33
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K.................. 33
INDEX TO FINANCIAL STATEMENTS............................... 44
GLOSSARY OF TERMS
Term Meaning
---- -------
AFDC allowance for funds used during
construction
Connecticut Yankee Connecticut Yankee Atomic Power Company
CTC contract termination charges
DOE U.S. Department of Energy
EUA Eastern Utilities Associates
Electricity Delivery Mass. Electric, Narragansett, Granite
Companies State, and Nantucket
FERC Federal Energy Regulatory Commission
Granite State Granite State Electric Company
Interconnection transmission interconnection between
participating New England utilities
and Hydro-Quebec
ISO Independent System Operator
kWh kilowatthour
Maine Yankee Maine Yankee Atomic Power Company
Mass. Electric Massachusetts Electric Company
Mass. Hydro New England Hydro-Transmission Electric
Company, Inc.
MDTE Massachusetts Department of
Telecommunications and Energy
MW megawatts
Nantucket Nantucket Electric Company
Narragansett The Narragansett Electric Company
National Grid The National Grid Group plc
National Grid USA Successor to NEES and a wholly-owned
subsidiary of The National Grid Group plc
N.E. Hydro Finance New England Hydro Finance Company, Inc.
NEEI New England Energy Incorporated
NEES New England Electric System (renamed
National Grid USA)
NEES Energy NEES Energy, Inc.
NEET New England Electric Transmission
Corporation
NEP New England Power Company
NEPOOL New England Power Pool
N.H. Hydro New England Hydro-Transmission
Corporation
NRC Nuclear Regulatory Commission
PG&E Gen PG&E Generating, formerly USGen New
England, Inc.
GLOSSARY OF TERMS
Term Meaning
---- -------
Research Drive Research Drive LLC
Seabrook 1 Seabrook Nuclear Generating Station
Unit 1
SEC Securities and Exchange Commission
Sellers NEP and Narragansett
Service Company New England Power Service Company
spent nuclear fuel high level radioactive waste
stranded costs the amounts by which prudently
incurred costs incurred to supply
customers electricity under a
regulated industry structure
exceed market prices under an
unregulated industry structure
Vermont Yankee Vermont Yankee Nuclear Power
Corporation
VPSB Vermont Public Service Board
Yankee Atomic Yankee Atomic Electric Company
Yankee Companies Yankee Atomic, Vermont Yankee,
Maine Yankee, and Connecticut
Yankee
1935 Act Public Utility Holding Company Act
of 1935, as amended
FORWARD LOOKING INFORMATION
This report and other presentations made by New England Power
Company (NEP or the Company) contain forward looking statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Throughout this report, forward looking
statements can be identified by the words or phrases "will likely
result", "are expected to", "will continue", "is anticipated",
"estimated", "projected", "believe", "hopes", or similar
expressions. Although NEP believes that, in making any such
statements, its expectations are based on reasonable assumptions,
any such statements may be influenced by factors that could cause
actual outcomes and results to be materially different from those
projected. Important factors that could cause actual results to
differ materially from those in the forward looking statements
include, but are not limited to:
(a) the impact of ongoing industry restructuring, as more
fully set out in the Industry Restructuring section of the 1999 NEP
Annual Report;
(b) timing and nature of SEC action on the proposed merger of
National Grid USA with Eastern Utilities Associates (EUA) as more
fully set out below under EASTERN UTILITIES ASSOCIATES MERGER, PAGE
2;
(c) the impact of general economic changes in New England;
(d) federal and state regulatory developments and changes in
law which may have a substantial adverse impact on the value of
NEP's assets;
(e) changes in accounting rules and interpretations which may
have an adverse impact on NEP's statements of financial position
and reported earnings;
(f) timing and adequacy of rate relief;
(g) adverse changes in electric load;
(h) climatic changes or unexpected changes in weather
patterns; and
(i) operation and decommissioning costs associated with
nuclear generating facilities, as set out under Nuclear Units
below, page 9.
PART I
ITEM 1. BUSINESS
THE COMPANY
Merger Agreement with National Grid
On March 22, 2000, the merger of New England Electric System (NEES) and The
National Grid Group plc (National Grid) was completed, with NEES (renamed
National Grid USA) becoming a wholly owned subsidiary of National Grid. New
England Power Company (NEP) will maintain its existing name and will remain a
wholly owned subsidiary of National Grid USA.
New England Power Company, a wholly owned subsidiary of National Grid USA
(formerly New England Electric System), is a Massachusetts corporation qualified
to do business in Massachusetts, New Hampshire, Rhode Island, Connecticut, Maine,
and Vermont. NEP is subject, for certain purposes, to the jurisdiction of the
regulatory commissions of these six states, the Securities and Exchange
Commission, under the Public Utility Holding Company Act of 1935 (the 1935 Act),
the Federal Energy Regulatory Commission, and the Nuclear Regulatory Commission.
NEP's business is primarily the transmission of electric energy in wholesale
quantities to other electric utilities, principally its distribution affiliates
Granite State Electric Company, Massachusetts Electric Company, Nantucket
Electric Company, and The Narragansett Electric Company. NEP's transmission
business will also do business under the name of National Grid Transmission USA.
Holders of common stock and 6% Cumulative Preferred Stock have general voting
rights. National Grid USA owns 99.57% of the voting stock of NEP and the NEP 6%
preferred holders own 0.43%. NEP owns voting stock in the amounts indicated of
the following companies:
% Voting
Securities
State of Type of Owned by
Name of Company Organization Business NEP
--------------- ------------ -------- ---------
Connecticut Yankee Atomic Conn. Ownership of 15%
Power Company Nuclear Unit (a)
Maine Yankee Atomic Maine Ownership of 20%
Power Company Nuclear Unit (a)
Vermont Yankee Nuclear Vermont Ownership of 20%
Power Corporation Nuclear Unit (a)
Yankee Atomic Electric Company Mass. Ownership of 30%
Nuclear Unit (a)
(a) For information on NEP's ownership interest in nuclear
generating units, see Nuclear Units, page 9.
The facilities of NEP, together with National Grid USA's four
electricity delivery companies, Massachusetts Electric Company
(Mass. Electric), The Narragansett Electric Company (Narragansett),
Granite State Electric Company (Granite State), and Nantucket
Electric Company (Nantucket), (together, the Electric Delivery
Companies) constitute an electrical transmission and distribution
system that is directly interconnected with other utilities in New
England and New York State, and indirectly interconnected with
utilities in Canada. See ELECTRIC UTILITY OPERATIONS, page 2.
EMPLOYEES
At December 31, 1999, NEP had 83 employees, approximately 17
are members of labor organizations. Collective bargaining
agreements with the Brotherhood of Utility Workers of New England,
Inc., the International Brotherhood of Electrical Workers, and the
Utility Workers Union of America, AFL-CIO expire in May, 2004.
ELECTRIC UTILITY OPERATIONS
INDUSTRY RESTRUCTURING
For a full discussion of Industry Restructuring see the
Industry Restructuring section of the 1999 NEP Annual Report,
incorporated herein by reference.
Accounting Implications
For a full discussion of Accounting Implications see the
Accounting Implications section of the 1999 NEP Annual Report,
incorporated herein by reference.
Overview of Financial Results
For a full discussion of Overview of Financial Results see the
Overview of Financial Results section of the 1999 NEP Annual
Report, incorporated herein by reference.
YEAR 2000 DISCLOSURE
For a full discussion of Year 2000 disclosure, see the Year
2000 Disclosure section of the 1999 NEP Annual Report, incorporated
herein by reference.
EASTERN UTILITIES ASSOCIATES MERGER
In February 1999, NEES, Eastern Utilities Associates (EUA),
and Research Drive LLC (Research Drive), a wholly owned
subsidiary of NEES, entered into an Agreement and Plan of Merger
(EUA Agreement). Pursuant to the EUA Agreement, Research Drive
will merge with and into EUA, with EUA becoming a wholly owned
subsidiary of National Grid USA.
The acquisition of EUA has received approval or support from
EUA shareholders, the Federal Trade Commission (FTC), the Federal
Energy Regulatory Commission (FERC), the Nuclear Regulatory
Commission (NRC), the Connecticut Department of Public Utility
Control, the Rhode Island Public Utilities Commission, and the
Massachusetts Department of Telecommunications and Energy (MDTE),
and the Vermont Public Service Board (VPSB). An application has
also been filed for approval with the Securities and Exchange
Commission (SEC), under the 1935 Act. The acquisition of EUA,
including the consolidation of Montaup Electric Company (Montaup
Electric ), a wholly owned subsidiary of EUA, into NEP, is
expected to be completed following the receipt of an SEC order
approving the acquisition, which could come at any time. If the
SEC order is not received in time to close the transaction by
April 28, 2000, the approval by the FTC, under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, expires
and will have to be renewed prior to completion of the
acquisition.
TRANSMISSION AND NUCLEAR GENERATION BUSINESS
Description of Business
On September 1, 1998, NEP completed the sale of substantially
all of its nonnuclear generating business to PG&E Generating
(PG&E Gen) an indirect wholly-owned subsidiary of PG&E
Corporation. NEP's primary business is now the transmission of
electric energy to other electric utilities, principally its
distribution affiliates, the Electricity Delivery Companies. NEP
owns a system of transmission lines and substations. NEP
continues to own minority interests in two joint owned nuclear
generating units as well as minority equity interests in four
nuclear generating companies (see Nuclear Units, page 9).
Rates
From January 1995 to March 1998, NEP collected the majority
of its generation and transmission revenues pursuant to the rates
under Tariff No. 1 established in the FERC approved W-95
settlement agreement, including the revenues from the Electricity
Delivery Companies. Under Tariff No. 1, NEP was obligated to
sell to its customers, and its customers were obligated to
purchase from NEP, the requirements of their respective retail
service territories, and they could only terminate those mutual
obligations upon seven years' notice. In addition, NEP
established an open access transmission Tariff No. 9 applicable
to non-Tariff No. 1 customers in July 1996. NEP continues to
serve a small number of non-affiliated customers pursuant to
Tariff No. 1.
Under the settlement agreements between NEP and the
Electricity Delivery Companies implemented in 1997 and 1998, an
amendment to the Tariff No. 1 service agreement reformed the
contractual relationship to allow for the early termination of
the Electricity Delivery Companies' obligation to purchase
wholesale all-requirements service from NEP, in consideration for
the payment of contract termination charges. The Electricity
Delivery Companies are recovering contract termination charges
through a transition access charge (see the Industry
Restructuring section of the 1999 NEP Annual Report). NEP has
also reached similar agreements with three unaffiliated
wholesale customers. In addition, one unaffiliated wholesale
customer has terminated service under Tariff No. 1. NEP has
obtained FERC approval to collect the associated stranded costs.
These agreements amend the provisions of Tariff No. 1 and allow
for the provision of unbundled service by NEP. See Legal
Proceedings, Page 20.
NEP's unbundled rates consist of contract termination
charges, transmission charges, standard offer charges where
applicable, and market revenues where applicable. The Contract
Termination Charges (CTC) rate was originally set at 2.8 cents
per kilowatthour (kWh), and subsequently reduced to approximately
1.5 cents or less per kWh upon completion of the sale of NEP's
nonnuclear generating business (see the Industry Restructuring
section of the 1999 NEP Annual Report). The transmission rate
pursuant to the open access Tariff No. 9 is a formula rate which
recovers NEP's actual costs plus a return on actual capital
investment and equals approximately 0.5 cents per kWh. This
includes the transmission element of the New England Power Pool
(NEPOOL) Tariff charges as well as Tariff No. 9. The standard
offer revenues equaled 3.5 cents per kWh in 1999 and equals 3.8
cents in 2000 and, with respect to NEP's continuing obligation to
supply standard offer service to Narragansett, the rate will
escalate in the years thereafter. Revenues from sale in the
marketplace will vary.
In March 2000, the MDTE approved the merger of Montaup
Electric into NEP, which is contingent upon the approval of the
pending acquisition of EUA. Under a rate consolidation plan
accepted by the FERC in September 1999, upon National Grid USA's
acquisition of EUA, Montaup Electric's open access transmission
tariffs will adopt the same terms and conditions for service as
those contained in NEP's tariffs. Upon the merger of Montaup
Electric into NEP, the combined company will charge a single
system transmission tariff based upon its total transmission
costs. The CTC rates for the companies will not initially be
combined.
The electric utility business of NEP is not highly seasonal.
In 1999, 47% of NEP's total transmission billings was derived
from affiliated companies, and 53% was from municipal and other
utilities. In addition, NEP's distribution affiliates are
responsible for 98% of NEP's revenues associated with stranded
cost recovery.
Standard Offer Service
Prior to divesting its nonnuclear generation business, NEP
was the wholesale supplier of the electric energy requirements of
the Electricity Delivery Companies under contracts that required
seven years' notice of termination. NEP's contracts with the
Electricity Delivery Companies were amended to remove the
obligation to sell electrical energy and related products. PG&E
Gen, TransCanada Power Marketing, Ltd. and Constellation Power
Source, Inc. retain the backstop obligation to supply the
electric energy requirements of the Electricity Delivery
Companies for retail customers eligible to continue to buy
standard offer generation service from their electricity delivery
company at regulated prices. NEP remains obligated to provide
transition power supply service at fixed rates to new customer
load in Rhode Island. NEP meets these obligations by
periodically procuring the necessary power supply at market
prices. NEP cannot predict whether the resulting revenues will
be sufficient to cover the costs to procure such power.
OPERATING REVENUES
The following is the detail of kWh sales and deliveries,
electric sales and other operating revenue, and operating income
for the last three years.
Sales and Deliveries of Electricity
(in thousands of kWh)
------------------------------------
1999 1998 1997
---- ----
Total Sales
and Deliveries 2,970,433 18,214,193 26,405,204
========== ========== ==========
Operating Revenues
(in thousands of dollars)
------------------------------------
1999 1998 1997
---- ---- ----
Total Electric Sales Revenue 90,639 631,943 1,616,598
Other Operating 505,702 586,397 61,305
Revenue
---------- ---------- ----------
Total Operating
Revenue $596,341 $1,218,340 $1,677,903
========== ========== ==========
Operating Income $78,563 $ 157,362 $ 190,852
========== ========== ==========
Operating revenue for 1999 decreased $622 million compared
with 1998 due to the divestiture and reduced CTC charges.
ELECTRIC UTILITY PROPERTIES
Transmission Properties
NEP's integrated system consists of 2,236 circuit miles of
transmission lines, 108 substations with an aggregate capacity of
13,209,382 kVA, and 7 pole or conduit miles of distribution
lines.
The properties of National Grid USA subsidiaries also
include the ownership interests of NEET, Mass. Hydro, and
N.H. Hydro in the Hydro-Quebec Interconnection, and an integrated
system of transmission lines, substations, and distribution
facilities.
NEP is a participant in NEPOOL. The NEPOOL Agreement
provides for coordination of the operation of the generation and
transmission facilities of its members. The NEPOOL Agreement
further provides for New England-wide central dispatch of
generation by the Independent System Operator (ISO).
ISO-New England was activated on July 1, 1997 and has been
operating the control area since that time. It operates under
contract with NEPOOL and is governed by an independent Board of
Directors. NEPOOL's Open Access Transmission Tariff, which
covers service across pool transmission facilities is
administered by ISO-New England.
In May 1999, NEPOOL and ISO-New England commenced
implementation of the NEPOOL competitive market system. The
market system establishes markets for several tradable energy and
reserve products. Implementation of the markets also has
resulted in the imposition of certain costs including congestion
related costs. As ordered by FERC, NEPOOL is currently working
to develop a Congestion Management System and a Multi-Settlement
System.
NEPOOL's governance structure consists of five sectors:
transmission owners, generators, suppliers, public power, and end
users. National Grid USA participates in the transmission owners
sector. As of December 31, 1999, the Transmission sector
accounted for 25 percent of the NEPOOL vote and the National Grid
USA Companies accounted for one-eighth of the Transmission sector
vote. Under NEPOOL's revised governance structure, all National
Grid USA companies are considered "related persons" and therefore
receive only a single vote.
Interconnection with Quebec
New England Electric Transmission Corporation (NEET) owns
and operates a portion of an international transmission
interconnection between the electric systems of Hydro-Quebec and
New England. New England Hydro-Transmission Electric Company,
Inc. (Mass. Hydro) and New England Hydro-Transmission Corporation
(N.H. Hydro) own and operate facilities in connection with an
expanded second phase of this interconnection. New England Hydro
Finance Company, Inc. (N.E. Hydro Finance) provides the debt
financing to Mass. Hydro and N.H. Hydro for the capital costs of
the interconnection. National Grid USA owns 100% of the voting
stock of NEET and 53.97% of the voting stock of Mass. Hydro and
N.H. Hydro. Mass. Hydro and N.H. Hydro each own 50% of the
voting securities of N.E. Hydro Finance.
NEET, Mass. Hydro, and N.H. Hydro own and operate, on behalf
of NEPOOL participants in the project, a 450 kV direct current
transmission line and related terminals to interconnect the New
England and Quebec transmission systems (the Interconnection).
The transfer capability of the Interconnection is currently rated
at 1,800 MW. Operating limits implemented by adjacent Power
Pools covering New York, New Jersey, Pennsylvania, and Maryland
often restrict the effective transfer capability to levels of
1,200 MW to 1,400 MW.
The Interconnection has two phases. NEP's participation in
both is approximately 18 percent. NEP and the other participants
have entered into support agreements that end in 2020. Under the
support agreements, NEP has agreed to guarantee its share of
debt financing for the second phase. At December 31, 1999, NEP
had guaranteed approximately $21 million of project debt. NEP's
rights and obligations under its support agreements were
transferred to PG&E Gen upon completion of the sale of NEP's
nonnuclear generating business, but NEP remains an obligor in the
event of PG&E Gen nonperformance (see the Industry Restructuring
section of the 1999 NEP Annual Report).
Nuclear Generation Properties
On September 1, 1998, NEP and its affiliate Narragansett,
completed the sale of substantially all of their nonnuclear
generating business to PG&E Gen. NEP also plans to seek offers
to sell its nuclear generating interests. For more information,
on pending sales of Vermont Yankee and Millstone 3, see Nuclear
Units, page 9.
Nuclear Units
General
NEP has interests in six nuclear units. Three of the units
have been permanently shut down. The remaining three are
currently operating.
NEP is a stockholder of Yankee Atomic Electric Company
(Yankee Atomic), Vermont Yankee Nuclear Power Corporation
(Vermont Yankee), Maine Yankee Atomic Power Company (Maine
Yankee), and Connecticut Yankee Atomic Power Company (Connecticut
Yankee). Each of these companies (collectively referred to as
the Yankee Companies) owns a single nuclear generating unit. The
stockholders of three Yankee Companies (Vermont Yankee, Maine
Yankee, and Connecticut Yankee) have agreed, subject to
regulatory approval, to provide capital requirements in the same
proportion as their ownership percentages of the particular
Yankee Company. NEP also has power contracts with each Yankee
Company that require NEP to pay an amount equal to its share of
total fixed and operating costs (including decommissioning costs)
of the plant plus a return on equity. Yankee Atomic, Connecticut
Yankee, and Maine Yankee have permanently ceased operations. NEP
purchases the output of the Vermont Yankee plant in the same
percentage as its stock ownership, less small entitlements taken
by municipal utilities.
In addition, NEP is a joint owner of the Millstone 3 nuclear
generating unit in Connecticut and the Seabrook Nuclear
Generating Station Unit 1 (Seabrook 1) nuclear generating unit in
New Hampshire. Millstone 3 and Seabrook 1 are operated by
subsidiaries of Northeast Utilities. NEP pays its proportionate
share of costs and receives its proportionate share of output
from Millstone 3 and Seabrook 1. Listed below is certain
information on each nuclear plant in which NEP has an ownership
interest.
Under restructuring settlement agreements approved by
regulators in Massachusetts, New Hampshire and Rhode Island, NEP
has agreed to attempt to divest its nuclear holdings.
In November 1999, the Vermont Yankee Nuclear Power
Corporation entered into an agreement with AmerGen Energy Company
(Amergen), a joint venture between PECO Energy and British
Energy, to sell the assets of Vermont Yankee. Under the terms of
the agreement, after a Vermont Yankee contribution toward the
plant's decommissioning trust fund, AmerGen will take over the
fund and assume responsibility for the actual cost of
decommissioning the plant. The agreement also requires the
existing power purchasers (including NEP) to continue to purchase
the output of the plant or to buy out of the purchased power
obligation. In November 1999, NEP signed an agreement to buy out
of its obligation, requiring future payments which will be
recovered through NEP's CTC. NEP has recorded an accrued
liability and offsetting regulatory asset of $80 million for its
share of future liabilities related to Vermont Yankee, including
the purchased power contract termination payment obligation, but
excluding interest and a return allowance. The proposed sale is
contingent upon regulatory approvals by the NRC, the SEC, under
the 1935 Act, and the VPSB, among others. NEP has a 20 percent
ownership interest in Vermont Yankee and an equity investment of
approximately $11 million at December 31, 1999.
As part of its restructuring settlement with the State of
New Hampshire, Public Service Company of New Hampshire (PSNH),
through its affiliate North Atlantic Energy Corporation (NAEC),
has committed to sell its interest in Seabrook 1 by the end of
2003. NAEC is the lead owner with a 35.98% interest and the
operator of the plant. Also as a part of that settlement, PSNH
has agreed to endeavor to bundle its interests with those of
other owners seeking to sell their interests. This should allow
for an auction of a majority interest. Action on the PSNH
settlement by the New Hampshire Public Utilities Commission is
expected during the second quarter with subsequent action
required by the New Hampshire legislature by June.
For information on the potential sale of Millstone 3, please
see Legal Proceedings page 20.
Operating Nuclear Units
NEP's Share of
NEP's Net Plant
Ownership Assets
Unit Interest (%) ($ in millions)
---- ------------ ---------------
Vermont Yankee 20 34
Millstone 3 12 12*
Seabrook 1 10 14*
*See Note C of the 1999 NEP annual report for a discussion of an
impairment writedown and establishment of an offsetting
regulatory asset.
Decommissioning Estimates
NEP's share of
($ in millions)
--------------------------------
Estimated Decommissioning
Decommissioning Fund
Costs Balances (1) License
Unit (in 1999 $) (12/31/99) Expiration
---- --------------- --------------- ----------
Vermont Yankee $86 $42 2012
Millstone 3 $76 $23 2025
Seabrook 1 $56 $13 2026
(1) Certain additional amounts are anticipated to be available
through tax deductions.
Nuclear Units Permanently Shut Down
NEP's Investment Future Estimated
------------------- Date Billings to NEP
Unit % $(millions) Retired $(millions)
---- --- ----------- ------------ ----------------
Yankee Atomic 30 5 February 1992 7
Connecticut Yankee 15 16 December 1996 63
Maine Yankee 20 15 August 1997 128
For a discussion of NEP's investment in both operating and
retired nuclear units, the Millstone 3 unit, nuclear
decommissioning costs and nuclear insurance issues, Note D of the
1999 NEP Annual Report. For information on legal proceedings
related to Millstone 3, see LEGAL PROCEEDINGS, page 20.
High-Level Waste Disposal
The Nuclear Waste Policy Act of 1982 provides a framework
and timetable for selection of sites for repositories of
high-level radioactive waste (spent nuclear fuel) from United
States nuclear plants. The U.S. Department of Energy (DOE) has
entered into contracts with the Yankee Companies, the Millstone 3
joint owners, and the Seabrook 1 joint owners for acceptance of
title to, and transportation and storage of, this waste. Under
these contracts, each operating unit will pay fees to the DOE to
cover the development and creation of waste repositories. Fees
for fuel burned since April 1983 have been collected by the DOE
on an ongoing basis at the rate of one tenth of a cent per kWh of
net generation. Fees for generation up through April 1983 were
determined by the DOE as follows: $13.2 million for Yankee
Atomic, $48.7 million for Connecticut Yankee, $50.4 million for
Maine Yankee, and $39.3 million for Vermont Yankee. Neither
Millstone 3 nor Seabrook 1 has been assessed any fees for fuel
burned through April 1983 because they did not enter commercial
operation until 1986 and 1990, respectively.
The Yankee Companies had several options to pay these fees.
Yankee Atomic paid its fee to the DOE for the period through
April 1983. The other three Yankee Companies elected to defer
payment until a future date, thereby incurring interest expense.
However, payment to the DOE must occur prior to the first
delivery of spent fuel. Connecticut, Maine, and Vermont Yankee
have segregated a portion of their respective DOE obligations in
external accounts. The remainder of the funds have been used to
support general capital requirements. All expect to separately
fund in full in external accounts their DOE obligation (including
accrued interest) prior to payment to the DOE. To the extent
that any of the three Yankee Companies is unable to fully meet
its DOE obligation at the prescribed time, NEP might be required
to provide additional funds.
Prior to such time that the DOE takes delivery of a plant's
spent nuclear fuel, it is stored on site in spent fuel pools.
Millstone 3, Seabrook 1, and Vermont Yankee are in the process of
reconfiguring their spent fuel pools to allow for additional
storage capability. Upon successful completion of the
reconfiguring, Millstone 3 will have sufficient spent fuel pool
capacity to support plant operation through the expiration of its
current NRC license. Seabrook 1's licensed storage capacity will
allow a full core discharge until 2011. Vermont Yankee will be
able to maintain a full core discharge capability until 2004.
Yankee Atomic, Connecticut Yankee and Maine Yankee all have
adequate on-site storage capacity for all their spent fuel.
The Nuclear Waste Policy Act of 1982 establishes that the
federal government (through the DOE)is responsible for the
disposal of spent nuclear fuel. The federal government requires
NEP to pay a fee based on its share of the net generation from
the Millstone 3 and Seabrook 1 nuclear generating units. Prior to
1998, NEP recovered this fee through its fuel clause. Under the
Settlement Agreements, substantially all of these costs are
recovered through CTCs. Similar costs are billed to NEP by
Vermont Yankee and are also recovered from customers through
CTCs. In 1997, ruling on a lawsuit brought against the DOE by
numerous utilities and state regulatory commissions, the U.S.
Court of Appeals for the District of Columbia, held that the DOE
was obligated to begin disposing of utilities' spent nuclear fuel
by January 1998. The DOE failed to meet this deadline, and is
not expected to have a temporary or permanent repository for
spent nuclear fuel before 2010, at the earliest. Many utilities,
including Yankee Atomic, Connecticut Yankee, and Maine Yankee,
are plaintiffs in on-going litigation related to the DOE's
failure to accept spent nuclear fuel.
Low-Level Waste Disposal
Federal law allows the states in which the three existing
low-level waste disposal sites were located to deny access to
nonregional waste generators after 1992. Under the statute,
individual states are responsible for finding local sites for
disposal or forming regional disposal compacts by defined
milestone dates.
None of the states in which NEP holds an interest in a
nuclear facility has met the statutory milestones toward
developing disposal sites. Currently, two low-level waste
disposal sites in the U.S. are accepting nonregional waste, Chem-
Nuclear Systems, Inc.'s site in Barnwell, South Carolina and
Envirocare of Utah, Inc's site in Clive, Utah. Following a
closure in the early 1990s, the Barnwell facility reopened its
services to most nonregional generators on July 1, 1995 and is
authorized to remain open until July 1, 2005. In 1996, the South
Carolina Supreme Court upheld the constitutionality of the
legislative action that reopened Barnwell to nonregional
generators. Envirocare began accepting Class A low-level waste
in 1995. Class A waste is the least contaminated of the three
categories defining low-level waste. The Barnwell facility
accepts all three categories of waste. All the units in which
NEP has an interest are currently shipping low-level waste to
these sites. Chem-Nuclear Systems, as operator of the Barnwell
facility, is obligated to make certain payments to the State of
South Carolina. Chem-Nuclear has indicated that projected
revenues from its disposal activities at Barnwell are not likely
to be sufficient to reimburse it for these payments, and is
exploring alternatives to increase revenues from utilities
disposing waste at Barnwell. NEP cannot predict what impact, if
any, this situation will have on the continued availability of
the Barnwell site. Recently, the State of South Carolina has
begun contemplating the closure of the Barnwell site. Should the
Barnwell facility become unavailable, the cost of decommissioning
the Yankee Atomic, Connecticut Yankee, and Maine Yankee plants
could increase.
The States of Maine and Vermont have established a compact
with Texas for the disposal of low-level waste at a yet to be
determined location in Texas. The compact agreement has been
approved in all three states, ratified by the U.S. Congress and
signed into law by the President. NEP cannot predict when a
disposal facility will be selected, licensed and become
operational in Texas. The compact relieves Maine and Vermont
from having to site an in-state disposal facility. Connecticut,
Massachusetts, and New Hampshire are still required to pursue
local or regional low-level waste disposal facilities. However,
Massachusetts suspended its search for a local disposal facility
in 1996.
Nuclear Fuel Supply
The utilities responsible for the fuel supply for these
operating nuclear units are not experiencing any difficulties in
obtaining commitments for the supply of each element of the
nuclear fuel cycle.
Other Items
Federal legislation requires emergency response plans,
approved by federal authorities, for nuclear generating units.
The Yankee Companies, Seabrook 1, and Millstone 3 are not
currently experiencing difficulty in maintaining approval of
their emergency response plans.
A Maine statute provides that if both Maine Yankee and its
decommissioning trust fund have insufficient assets to pay for
the plant decommissioning, the owners of Maine Yankee are jointly
and severally liable for the shortfall. The definition of owner
under the statute covers NEP and may cover companies affiliated
with it. NEP and the Electricity Delivery Companies cannot
determine, at this time, the constitutionality, applicability, or
effect of this statute. If NEP or the Electricity Delivery
Companies were required to make payments under this statute, they
would assess their legal remedies at that time. In any event,
NEP and the Electricity Delivery Companies would attempt to
recover through rates any payments required. If any claim in
excess of NEP's ownership share were enforced against a National
Grid USA company, that company would seek reimbursement from any
other Maine Yankee stockholder which failed to pay its share of
such costs.
Purchased Power Transfer Agreement
As part of the sale of NEP's nonnuclear generating business
to PG&E Gen on September 1, 1998, NEP signed a purchased power
transfer agreement through which PG&E Gen purchased NEP's
entitlement to approximately 1,100 MW of power procured under
long-term contracts. For more information, see the Industry
Restructuring section of the 1999 NEP Annual Report.
REGULATORY AND ENVIRONMENTAL MATTERS
Regulation
Numerous activities of NEP are subject to regulation by
various federal agencies. Under the 1935 Act, many transactions
of NEP are subject to the jurisdiction of the SEC. With the
intensifying competitive pressures within the electric utility
industry, there has been increasing debate about modifying or
repealing the 1935 Act. Under the Federal Power Act, NEP is
subject to the jurisdiction of the FERC with respect to rates and
accounting. In addition, the NRC has broad jurisdiction over
nuclear units and federal environmental agencies have broad
jurisdiction over environmental matters.
For more information, see Industry Restructuring section of
the 1999 NEP Annual Report; Rates, page 3; Nuclear Units, page
9; and Environmental Requirements, page 15.
Environmental Requirements
Existing Operations
NEP is subject to federal, state, and local environmental
regulation of, among other things, wetlands and flood plains; air
and water quality; storage, transportation, and disposal of
hazardous wastes and substances; underground storage tanks; and
land-use. Upon completion of the sale of substantially all of
NEES' nonnuclear generating business to PG&E Gen, PG&E Gen
assumed responsibility for environmental conditions at the
Sellers' nonnuclear generating stations (see the Industry
Restructuring section of the 1999 NEP Annual Report.)
Siting and Construction Activities for New Transmission
Facilities
All New England states require, in certain circumstances,
regulatory approval for site selection or construction of major
transmission facilities. Connecticut, Maine, Massachusetts, New
Hampshire, and Rhode Island also have programs of coastal zone
management that might restrict construction of electrical
facilities in, or potentially affecting, coastal areas. The
New England states have environmental laws which require project
proponents to prepare reports of the environmental impact of
certain proposed actions for review by various agencies.
Environmental Protection Facilities Expenditures
Due to the divestiture of its nonnuclear generating
business, NEP estimates that capital expenditures for
environmental protection facilities in 2000 and 2001 will not be
material.
Hazardous Substances
The electric utility industry typically utilizes and/or
generates in its operations a range of potentially hazardous
products and by-products. For more information regarding sites
for which NEP has been named as potentially responsible parties,
other sites, a settlement agreement covering rate recovery of
certain remediation costs, and reserves, see Note D of the Notes
to the Financial Statements of the NEP 1999 Annual Report.
Nuclear
The NRC, along with other federal and state agencies, has
extensive regulations pertaining to environmental aspects of
nuclear reactors. Safety aspects of nuclear reactors, including
design controls and inspection programs to mitigate any
possibility of nuclear accidents and to reduce any damages
therefrom, are also subject to NRC regulation. See Nuclear
Units, page 9.
CONSTRUCTION AND FINANCING
NEP's estimated construction expenditures (including nuclear
fuel) are shown below for 2000 through 2002.
NEP conducts a continuing review of its construction and
financing programs. These programs and the estimates shown below
are subject to revision based upon changes in assumptions as to
load growth, rates of inflation, receipt of adequate and timely
rate relief, the availability and timing of regulatory approvals,
new environmental and legal or regulatory requirements, total
costs of major projects, technological changes, and the
availability and costs of external sources of capital.
Estimated Construction Expenditures
-----------------------------------
2000 2001 2002 Total
---- ---- ---- -----
($ in Millions - excluding AFDC)
Nuclear Generation (1) 10 10 10 30
Transmission 45 45 65 155
---- ---- ---- ----
Total NEP 55 55 75 185
---- ---- ---- ----
<FN>
(1) Includes nuclear fuel.
</FN>
Financing
All of NEP's construction expenditures during the period
2000 to 2002 are expected to be financed by internally generated
funds.
NEP's general practice has been to finance construction
expenditures in excess of internally generated funds initially by
issuing unsecured short-term debt. This short-term debt is
subsequently reduced through sales of long-term debt securities
and through capital contributions from its parent.
The ability of NEP to issue short-term debt is limited by
the need to obtain regulatory approval from the SEC under the
1935 Act and from the New Hampshire Public Utilities Commission.
The following table summarizes the short-term debt amounts for
which regulatory approval has been granted at December 31, 1999,
and the amount of outstanding short-term debt and lines of credit
and standby bond facilities at such date.
($ millions)
Lines of Credit/
Regulatory Standby Bond
Limit Outstanding Facilities
---------- ----------- ----------------
NEP 375 39(a) 460
(a) NEP plans to seek the necessary regulatory approvals in 2000 which would
allow the $39 million of variable rate debt to remain outstanding through
2015. This would result in classifying the debt as long-term rather than
short-term.
NEP and certain affiliates, with regulatory approval,
operate a money pool to more effectively utilize cash resources
and to reduce outside short-term borrowings. Short-term
borrowing needs are met first by available funds of the money
pool participants. Borrowing companies pay interest at a rate
designed to approximate the cost of outside short-term
borrowings. Companies which invest in the pool share the
interest earned on a basis proportionate to their average monthly
investment in the money pool. Funds may be withdrawn from or
repaid to the pool at any time without prior notice. At December
31, 1999, NEP had no moneypool borrowings outstanding.
EXECUTIVE OFFICERS
The Treasurer is elected by the stockholders to hold office
until the next annual meeting of stockholders and until the
successor is duly chosen and qualified. The other executive
officers are elected by the Board of Directors to hold office
subject to the pleasure of the directors and until the first
meeting of directors after the next annual meeting of
stockholders and until their successors are duly chosen and
qualified. Certain officers of NEP are, or at various times in
the past have been, officers and/or directors of the affiliated
companies with which NEP has entered into contracts and had other
business relations.
Alfred D. Houston - Age: 59 - Chairman since 1998 - NEES
Chairman 1998 to 2000 - NEES Executive Vice President from
1994 to 1998 - NEES Senior Vice President from 1987 to 1994
- NEES Chief Financial Officer from 1984 to 1998 - Vice
President of NEP from 1987 to 1994 - Vice President of
Narragansett from 1976 to 1998 - Treasurer of Narragansett
from 1977 to 1998.
Peter G. Flynn - Age: 46 - Elected President in 1999 - Vice
President and Director of Rates for the Service Company from
1996 to 1999 - Assistant General Counsel for the Service
Company during 1996 - Senior Counsel for the Service Company
from 1992 to 1996.
Cynthia A. Arcate - Age: 43 - Elected Vice President in 2000
- Executive Vice President of Granite State from 1997 to
2000 - Vice President of Granite State from 1995 to 1997.
Michael E. Jesanis - Age: 43 - Vice President since 1998 -
National Grid USA (formerly NEES) Senior Vice President and
Chief Financial Officer since 1998 - NEES Vice President
from 1997 to 1998 - NEES Treasurer from 1992 to 1998 -
Elected Vice President of Narragansett in 1998 -
Treasurer of Mass. Electric and NEP from 1992 to 1998.
Cheryl A. LaFleur - Age: 45 - Vice President since 1995.
National Grid USA (formerly NEES) Senior Vice President
since 1998 - NEES Vice President from 1995 to 1998 -
Secretary and General Counsel since 1995 - Vice President of
Mass. Electric from 1993 to 1995.
John F. Malley - Age: 51 - Vice President since 1992.
James S. Robinson - Age: 46 - Vice President since 1998 -
Director of Nuclear Investments from 1997 to 1998 - Manager,
Wholesale Business Administration from 1993 to 1997.
Masheed H. Rosenqvist - Age: 45 - Vice President since 1998
- Manager, Transmission Tariffs and Contracts for NEP or
Service Company since 1997 - Consulting Engineer for the
Service Company from 1995 to 1997.
John G. Cochrane - Age: 42 - National Grid USA (formerly
NEES) Vice President since 1999 - National Grid USA
(formerly NEES) Treasurer since 1998 - Treasurer of Mass.
Electric, NEP, and the Service Company since 1998 - Vice
President of the Service Company and Treasurer of
Narragansett since 1993.
Kwong O. Nuey - Age: 51 - Elected Controller in 2000 - Vice
President and Director, Retail Information Services for
Mass. Electric from 1993 to 2000.
ITEM 2. PROPERTIES
See ITEM 1. Business - Transmission Properties, Page 7 and
Nuclear Generation Properties, page 8.
ITEM 3. LEGAL PROCEEDINGS
See Item 1. BUSINESS - Nuclear Units, page 9.
In August 1997, NEP sued Northeast Utilities (NU) in
Massachusetts Superior Court for damages resulting from the
tortious conduct of NU that caused the shutdown of Millstone 3.
NEP's claim for damages included the costs of replacement power
during the outage, costs necessary to return Millstone 3 to safe
operation, and other additional costs. Most of NEP's incremental
replacement power costs have been recovered from customers,
either through fuel adjustment clauses or through provisions in
the Settlement Agreements.
In August 1997, NEP also sent a demand for arbitration to
Connecticut Light & Power Company and Western Massachusetts
Electric Company, both subsidiaries of NU (subsidiaries), seeking
damages resulting from their breach of obligations under an
agreement with NEP and others regarding the operation and
ownership of Millstone 3.
In November 1999, NEP, NU, and the subsidiaries executed an
agreement which settled the litigation and the arbitration
described above. Under the settlement, NU paid NEP approximately
$24 million. In addition, NU also agreed to include NEP's
Millstone 3 interest when NU sells its Millstone 3 interest at
auction. Amounts received pursuant to a sale will, after
reimbursement of NEP's transaction costs and net investment in
Millstone 3, be credited to customers.
From 1983 until 1998, NEP was the wholesale power supplier
for the Town of Norwood, Massachusetts (Norwood). In April 1998,
Norwood began taking power from another supplier. Pursuant to a
tariff amendment approved by the FERC in May 1998, NEP has been
assessing Norwood a CTC. Through December 1999, the charges
assessed Norwood amount to approximately $15 million, all of
which remain unpaid. NEP is pursuing a collection action in
Massachusetts Superior Court.
Separately, Norwood filed suit in Federal District Court
(District Court) in April 1997 alleging that NEP's divestiture
violated the terms of the 1983 power contract and contravened
antitrust laws. The District Court dismissed the lawsuit. On
appeal, the First Circuit Court of Appeals (First Circuit) also
consolidated appeals Norwood made from FERC's orders approving
the divestiture, the wholesale rate settlement between NEP and
its distribution affiliates, and the CTC tariff amendment. On
February 2, 2000, the First Circuit dismissed Norwood's appeal
from the FERC orders and dismissed its appeal from all but one of
Norwood's District Court claims, which relates to the creation of
generation market power. On February 28, 2000, and March 3,
2000, respectively, the First Circuit denied Norwood's petition
for further review of its District Court claims decision and its
decision on the FERC orders.
Norwood has also appealed a 1999 FERC decision that rejected
Norwood's challenge to the calculation of the CTC based on the
term of the 1983 power contract.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders
during the last quarter of 1999.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDER MATTERS
The information required by this item is not applicable as
the common stock of NEP is held solely by National Grid USA.
Information pertaining to payment of dividends and restrictions
on payment of dividends is incorporated herein by reference to
the NEP 1999 Annual Report.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein
by reference to Selected Financial Information, Note K of the NEP
1999 Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The information required by this item is incorporated herein
by reference to the Financial Review section of the NEP 1999
Annual Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The information required by this item is incorporated herein
by reference to the Risk Management section of the NEP 1999
Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein
by reference to the financial statements and Notes to Financial
Statements in the NEP 1999 Annual Report.
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 names of the directors of NEP, their ages, and a brief
account of their business experience during the past five years
appear below. Information required by this item for Executive
Officers is provided under the caption EXECUTIVE OFFICERS in Part
I of this report.
Directors are elected to hold office until the next annual
meeting of stockholders or special meeting held in lieu thereof
and until their respective successors are chosen and qualified.
Cynthia A. Arcate* - Elected Director in 2000.
L. Joseph Callan - Age: 52 - Elected Director in 2000 -
Consultant since 1998 - Several positions at the NRC,
including Regional Administrator and Executive Director of
Operations, from 1979 to 1998.
Peter G. Flynn* - Elected Director in 1999.
Alfred D. Houston* - Director since 1984. Directorships of
National Grid USA companies: Granite State Energy, Inc.,
NEES Communications, Inc., NEES Energy, Inc., New England
Electric Transmission Corporation, New England Energy
Incorporated, New England Hydro Finance Company, Inc., New
England Hydro-Transmission Corporation, New England
Hydro-Transmission Electric Company, Inc., New England Power
Service Company, and Wayfinder Group.
Cheryl A. LaFleur* - Director since 1995. Directorships of
National Grid USA companies: Granite State Electric Company,
Granite State Energy, Inc., Massachusetts Electric Company,
Nantucket Electric Company, The Narragansett Electric
Company, NEES Communications, Inc., NEES Energy, Inc., New
England Electric Transmission Corporation, New England
Energy Incorporated, New England Hydro Finance Company,
Inc., New England Hydro-Transmission Corporation, New
England Hydro- Transmission Electric Company, Inc., New
England Power Service Company, and Wayfinder Group, Inc.
Richard P. Sergel* - Director since 1998. Director of
National Grid Group, plc. Directorships of National Grid
USA companies: Granite State Electric Company, Granite State
Energy, Inc., Massachusetts Electric Company, Nantucket
Electric Company, The Narragansett Electric Company, NEES
Communications, Inc., NEES Energy, Inc., New England Energy
Incorporated, New England Electric Transmission Corporation,
New England Hydro Finance Company, Inc., New England Hydro-
Transmission Corporation, New England Hydro-Transmission
Electric Company, Inc., New England Power Service Company,
and Wayfinder Group, Inc.
Philip R. Sharp - Age: 57 - Elected Director in 2000 -
Lecturer, Harvard University John F. Kennedy School of
Government since 1995 - US Congressman from 1975 to 1995.
Other directorship: Cinergy Corporation.
*Please refer to the material supplied under the caption
EXECUTIVE OFFICERS in Part I of this report for other
information regarding these directors.
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934
requires NEP's officers and directors, and persons who own more
than 10 percent of a registered class of NEP's equity securities,
to file reports on Forms 3, 4, and 5 of share ownership and
changes in share ownership with the SEC and the New York Stock
Exchange and to furnish NEP with copies of all Section 16(a)
forms they file.
Based solely on NEP's, review of the copies of such forms
received by it, or written representations from certain reporting
persons that such forms were not required for those persons, NEP
believes that, during 1999, all filing requirements applicable to
its officers, directors, and 10 percent beneficial owners were
complied with.
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table gives information with respect to all
compensation (whether paid directly by NEP or billed to it as
hourly charges) for services in all capacities for NEP for the
years 1997 through 1999 to or for the benefit of the Chief
Executive Officer and the four other most highly compensated
executive officers.
NEP
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation (b) Compensation
-------------------------- -------------------
Other Restricted
Name and Annual & Deferred All Other
Principal Compensa- Share LTIP Compensa-
Position Year Salary Bonus tion Awards Payouts tion
(a) ($) ($)(c) ($)(d) ($)(e) ($) ($)(f)
- ---------- ---- ------- ------ --------- ---------- ------- ---------
Peter G. 1999 154,707 74,812 3,616 30,220 46,464 359
Flynn 1998 57,838 29,383 1,151 12,176 6,864 75
President
(Elected 1/99)
Alfred D. 1999 40,385 20,766 1,054 11,576 20,235 219
Houston 1998 49,236 32,804 1,137 18,677 17,545 288
Chairman
Cheryl A. 1999 36,268 17,321 1,278 7,871 19,015 82
LaFleur 1998 32,922 18,509 1,258 8,562 6,143 69
Vice 1997 85,555 93,340 3,311 1,832 0 149
President
Masheed H. 1999 124,740 45,569 2,538 17,671 0 412
Rosenqvist 1998 113,697 44,654 2,285 17,618 0 366
Vice
President
James S. 1999 115,920 42,415 2,693 16,405 22,018 167
Robinson 1998 108,205 39,143 2,510 17,734 13,641 149
Vice
President
(a) Certain officers of NEP are also officers of affiliate
companies.
(b) Includes deferred compensation in category and year earned.
(c) The bonus figure represents: cash bonuses under an incentive
compensation plan, the all-employee goals program, the
variable match of the incentive thrift plan, including related
deferred compensation plan matches, special cash bonuses, and
unrestricted shares under the incentive share plan. In
1997, the bonus amounts were all cash or contributions to the
incentive thrift plan, including related deferred compensation
plan matches. See descriptions under Plan Summaries.
(d) Includes amounts reimbursed by NEP for the payment of taxes on
certain noncash benefits and NEP contributions to the
incentive thrift plan that are not bonus contributions
including related deferred compensation plan match. See
description under Plan Summaries.
(e) The incentive share awards for the named executives who were
also NEES executives (1997 - 1999) and the other named
executives (in 1998 only) were in the form of restricted
shares (with a five-year restriction) or deferred share
equivalents, deferred for receipt for at least five years, at
the executive's option. As cash dividends were declared, the
number of deferred share equivalents increased as if the
dividends were reinvested in shares. The shares awarded for
the other named executives in 1997 were not restricted and the
value of the awards is included in the bonus column.
As of December 31, 1999, the following executive officers held
the amount of restricted and deferred shares with the value
indicated: Mr. Flynn 3,691 shares, $191,009 value; Mr. Houston
19,545 shares, $1,011,454 value; Ms. LaFleur 8,306 shares,
$429,836 value; Ms. Rosenqvist 376 shares, $19,458 value; and
Mr. Robinson 131 shares, $6,779 value. The value was
calculated by multiplying the closing market price on December
31, 1999 by the number of shares.
(f) Includes NEP contributions to life insurance. See description
under Plan Summaries. The life insurance contribution is
calculated based on the value of term life insurance for the
named individuals. The premium costs for most of these
policies have been or will be recovered by NEP.
Directors' Compensation
Members of the NEP Board who are employees of National Grid
USA companies receive no fees for service on the Board. Non-
employee directors receive an annual retainer of $20,000 plus a
meeting fee of $1,000 for each Board or committee meeting attended.
Retirement Plans
The following table shows estimated annual benefits payable to
executive officers under the qualified pension plan and the
supplemental retirement plan, assuming retirement at age 65 in
2000.
PENSION TABLE
Five-Year
Average 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
Compensa- of of of of of of
tion Service Service Service Service Service Service
- --------- -------- -------- -------- -------- -------- --------
$100,000 18,926 29,276 39,626 49,976 60,326 70,676
$150,000 29,276 42,414 57,439 72,464 87,489 102,514
$200,000 39,626 57,439 75,251 94,951 114,651 134,351
$250,000 49,976 72,464 94,951 116,814 141,064 165,314
$300,000 60,326 87,489 114,651 141,064 167,477 184,123
$350,000 70,676 102,514 134,351 165,314 196,277 215,865
$400,000 81,026 117,539 154,051 189,564 225,077 241,590
$450,000 91,376 132,564 173,751 213,814 253,877 279,315
$500,000 101,726 147,589 193,451 238,064 282,677 311,040
For purposes of the retirement plans, Mr. Flynn, Mr. Houston,
Ms. LaFleur, Ms. Rosenqvist, and Mr. Robinson currently have 18,
21, 14, 18, and 12 credited years of service, respectively.
Benefits under the pension plans are computed using formulae
based on percentages of highest average compensation computed over
five consecutive years. The compensation covered by the pension
plan includes salary, bonus, and incentive share awards. Long-Term
Performance Share awards are not included. The benefits listed in
the pension table are not subject to deduction for Social Security
and are shown without any joint and survivor benefits. If the
participant elected at age 65 a 100 percent joint and survivor
benefit with a spouse of the same age, the benefit shown would be
reduced by approximately 16 percent.
The pension plan table above does not include annuity payments
to be received in lieu of life insurance for Mr. Houston. The
payments are described below under Plan Summaries.
NEP contributes the full cost of post-retirement health
benefits for senior executives.
PAYMENTS UPON A CHANGE OF CONTROL AND TERMINATION OF EMPLOYMENT
National Grid USA is a party to agreements with each of Mr.
Houston, Ms. LaFleur, and Mr. Flynn (each, an Executive and each
agreement, a Severance Agreement), which Severance Agreements were
entered into in 1995 with Mr. Houston and on March 1, 1998 with the
other Executives and which remain in effect for the three year
period following (1) a Change in Control of NEES (as defined in the
Severance Agreements) or (2) a Major Transaction (as defined in the
Severance Agreements). In accordance with the terms of the
Severance Agreements, if the applicable Executive's employment is
terminated within three years following the event described in
clause (1) or (2), as applicable, National Grid USA will pay to the
Executive the severance payments and will provide to the Executive
the severance benefits described below, unless the Executive's
employment is terminated (x) by National Grid USA for Cause, (y) by
the Executive without Good Reason or (z) by reason of the
Executive's death, Disability or Retirement (each term, as defined
in the Severance Agreements).
The shareholder approval of the merger agreement with The
National Grid Group plc (May 1999) constituted a Major Transaction
and the merger with The National Grid Group plc on March 22, 2000
constituted a Change in Control. Accordingly, in the event an
Executive's employment is terminated within three years following
the Major Transaction or Change in Control, such Executive will be
entitled to receive, in lieu of any other payments due to the
Executive: (1) lump sum cash payment equal to three times (two
times, in certain cases) the sum of (a) the higher of (i) such
Executive's annual base compensation in effect at the time of
termination and (ii) such Executive's annual base compensation in
effect immediately prior to the Change in Control or Major
Transaction and (b) the higher of (i) the average of the annual
bonuses awarded to such Executive under the New England Electric
Companies' Senior Incentive Compensation Plan, New England Electric
Companies' Incentive Compensation Plan I, II and III and the
Incentive Share Plan (collectively, the Incentive Plans) for the
three performance years ended prior to the date of termination and
(ii) the average of the annual bonuses awarded to such Executive
pursuant to the Incentive Plans for the three performance years
ended prior to the Change in Control or Major Transaction; (2) a
cash lump sum payment equal to the excess of (a) the actuarial
equivalent of the retirement pension which the Executive would have
accrued under the terms of each pension plan of National Grid USA
(determined as if the Executive (i) were fully vested thereunder
and had accumulated 36 additional months (24 additional months, in
certain cases) of service credit thereunder and (ii) had been
credited under each such pension plan of National Grid USA during
such 36 month period with compensation at the higher of (A) the
Executive's compensation during the 12 months prior to the date of
termination and (B) the Executive's compensation during the 12
months ending on the date of the Change in Control or Major
Transaction) over (b) the actuarial equivalent of the retirement
pension which the Executive had actually accrued pursuant to the
provisions of National Grid USA's pension plans as of the date of
his or her termination of employment; (3) the continuation of
employee welfare benefits for three years (two years, in certain
cases) following the date of termination, reduced to the extent the
Executive receives such benefits from a subsequent employer; (4) if
the Executive would have otherwise been entitled to post-retirement
health care or life insurance had he continued to be employed for
three additional years (two additional years, in certain cases),
such post-retirement health care and life insurance commencing on
the later of (a) the date that such coverage would have first
become available to the Executive and (b) the date that the
benefits described in clause (3) above terminate and (5) the
reimbursement of legal fees and expenses, if any, incurred by the
Executive in disputing any issue relating to the termination of his
employment. Notwithstanding the above, payments to be made and
benefits to be provided to the Executives will be reduced to the
extent necessary to avoid imposition of the excise tax (the Excise
Tax) pursuant to Section 4999 of the Code; in certain cases,
however, such payments and benefits will be reduced only if such
reduction would yield a greater result to the Executive than actual
payment by the Executive of the Excise Tax.
Pursuant to the merger agreement with National Grid, National
Grid and National Grid USA entered into a consulting contract with
Mr. Houston. The consulting contract is for a term of two years
and provides for payments to Mr. Houston of $200,000 per year.
Upon a change in control a participant in the deferred
compensation plan has the option of receiving a full distribution
of the participant's cash and share accounts and the actuarial
value of future benefits from the insurance related benefits under
a prior plan, all less 10 percent.
NEES's bonus plans, including the incentive compensation plans,
the Incentive Thrift Plan, and the Goals Program, provided for
payments equal to the average of the bonuses for the three prior
years in the event of a Change of Control. These payments would be
made in lieu of the regular bonuses for the year in which the
Change in Control occurs. The Long-Term Performance Share Award
Plan provided for a cash payment equal to the value of the
performance shares in the participants' account times the average
target achievement percentage for the Incentive Thrift Plan for the
three prior years. The Retirees Health and Life Insurance Plan has
provisions preventing changes in benefits adverse to the
participants for three years following a Change in Control.
PLAN SUMMARIES
A brief description of the various plans through which
compensation and benefits have been provided to the named executive
officers is presented below to better enable shareholders to
understand the information presented in the tables shown earlier.
The amounts of compensation and benefits provided to the named
executive officers under the plans described below (and charged to
NEP) are presented in the Summary Compensation Table.
Goals Program
The Goals Program establishes goals annually. For 1999, these
included goals related to core operating income, costs for
customers for electricity delivery, safety, absenteeism,
transmission and distribution reliability, environmental and OSHA
compliance, and customer satisfaction. Some goals apply to all
employees, while others apply to particular functional groups.
Depending upon the number of goals met, and provided the minimum
earnings goal is met, employees may earn a cash bonus of 1 percent
to 4-1/2 percent of their compensation.
Incentive Thrift Plan
The incentive thrift plan (a 401(k) program) provides for a
match of 40 percent of up to the first 5 percent of base
compensation contributed to the incentive thrift plan (shown under
Other Annual Compensation in the Summary Compensation Table) and,
based on an incentive formula tied to core operating income, may
fully match the first 5 percent of base compensation contributed
(the additional amount, if any, is shown under Bonus in the Summary
Compensation Table). Under Federal law, contributions to these
plans are limited. In 1999, the salary reduction amount was
limited to $10,000.
Deferred Compensation Plan
The Deferred Compensation Plan offered executives the
opportunity to defer base pay and bonuses. The plan offered the
option of investing at the prime rate or in NEES common shares.
Under Federal law, the Incentive Thrift Plan, described above, was
required to limit participant base compensation to $160,000 in
calculating the NEES match. Under the Deferred Compensation Plan,
NEES made a contribution to an executive's share account equivalent
to the resultant reduction in his or her match under the Incentive
Thrift Plan.
Life Insurance
National Grid USA has established for certain senior executives
life insurance plans funded by individual policies. The combined
death benefit under these insurance plans is three times the
participant's annual salary. These plans are structured so that,
over time, National Grid USA should recover the cost of the
insurance premiums.
After termination of employment, Mr. Houston may elect,
commencing at age 55 or later, to receive an annuity income equal
to 22.5 percent of 1998 annual salary plus 40 percent of final
annual salary. In that event, the life insurance is reduced over
15 years to an amount equal to his final annual salary.
Incentive Compensation Plan
Under the bonus plan for certain senior employees, bonuses are
tied to achievement of core business operating income and strategic
objectives. Annual income targets and strategic objectives are
established for each year. Bonuses are also dependent upon the
achievement of individual goals. An individual's award of shares
under the incentive share plan has been a fixed percentage of her
or his cash bonus for that year. If no cash award was made, no
shares would be distributed.
Financial Counseling
NEP pays for personal financial counseling for certain
executives. As required by the IRS, a portion of the amount paid
is reported as taxable income for the executive. Financial
counseling is also offered to other employees through seminars
conducted at various locations each year.
Other
NEP has not had any share option plans.
LONG-TERM INCENTIVE PLAN - AWARDS IN LAST FISCAL YEAR
-----------------------------------------------------
The Long-Term Performance Share Award Plan provided awards
based on various measures of NEES performance over a three-year
period. Each award factor functioned independently. The
performance targets for each cycle were set by the Compensation
Committee of the NEES Board. Performance was rated on rolling
three-year periods, with a new cycle beginning each year. An
individual's potential award under the plan was a fixed percentage
(ranging from 15 percent to 50 percent) of base pay. At the end of
the three-year cycle, the participant received NEES shares based
upon the performance against the various factors.
The only measure of performance for the cycle commencing
January 1, 1999 was the successful completion of the merger with
National Grid.
The following table shows the awards, for those executive
officers named in the Summary Compensation Table, under the Long-
Term Performance Share Award Plan for the performance cycle
commencing January 1, 1999. Due to the change of control
provisions in the plan, triggered by the merger with National Grid
on March 22, 2000, the listed participants received awards in the
amounts indicated in the table. The amount awarded was based upon
the average of incentive compensation target achievement for the
prior three years and not upon the measure specified above.
NEP
---
ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK PRICE-BASED PLANS
------------------------------------------------
Number of Actual Change
Common Shares Performance in Control
Name Allotted Period Award (a)
--------- ----------- ------------
Peter G. Flynn 856 3 years 744
Alfred D. Houston 5187 3 years 4512
Cheryl A. LaFleur 2534 3 years 2204
Masheed H. Rosenqvist 388 3 years 338
James S. Robinson 361 3 years 314
(a) The awards in this column were made as a result of the change
in control on March 22, 2000. The listed participants
received awards in the amounts indicated in the table. The
amount awarded was based upon the average of incentive
compensation target achievement for the prior three years and
not upon the measure specified above.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
National Grid USA owns 99.57 percent of the voting securities of
NEP.
As of March 23, 2000, there were no outstanding NEES common
shares due to the completion of the merger with The National Grid
Group plc and no officers or directors of NEP owned any NEP
securities.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reference is made to ITEM 11. EXECUTIVE COMPENSATION.
PART IV
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
List of Exhibits
Unless otherwise indicated, the exhibits listed below are
incorporated by reference to the appropriate exhibit numbers and
the Commission file numbers indicated in parentheses.
(3) (a) Articles of Organization as amended through June 25, 1987
(Exhibit 3(a) to 1988 Form 10-K, File No. 0-1229).
(b) By-laws of the Company as amended December 12, 1997
(Exhibit 3(b) to 1997 Form 10-K, File No. 0-1229).
(10) Material Contracts
(a) Boston Edison Company et al. and the Company: Amended
REMVEC Agreement dated August 12, 1977 (Exhibit 5-4(d),
File No. 2-61881).
(i) Boston Edison Company et al. and the Company:
REMVEC II Agreement dated on or about July 1, 1997
(Exhibit 10(a)(I) to NEES' 1997 Form 10- K, File
No. 1-3446).
(ii) Boston Edison Company et al. and the Company:
Security Analysis Services Agreement dated on or
about July 1, 1997 (Exhibit 10(a)(ii) to NEES'
1997 Form 10-K, File No. 1-3446).
(b) The Connecticut Light and Power Company et al. and the
Company: Sharing Agreement for Joint Ownership,
Construction and Operation of Millstone Unit No. 3
dated as of September 1, 1973, and Amendment dated as
of August 1, 1974 (Exhibit 10-5, File No. 2-52820);
Amendments dated as of December 15, 1975 and April 1,
1986 (Exhibit 10(b) to NEES' 1990 Form 10-K File No.
1-3446). Transmission Support Agreement dated
August 9, 1974; Instrument of Transfer to the Company
with respect to the 1979 Connecticut Nuclear Unit, and
Assumption of Obligations, dated December 17, 1975
(Exhibit 10-6(b), File No. 2-57831).
(c) Connecticut Yankee Atomic Power Company et al. and the
Company: Stockholders Agreement dated July 1, 1964
(Exhibit 13-9-A, File No. 2-2006); Power Purchase
Contract dated July 1, 1964 (Exhibit 13-9-B, File No.
2-23006); Additional Power Contract dated as of April
30, 1984 and 1996; Amendatory Agreement dated as of
December 4, 1996 (Exhibit 10(c) to 1996 Form 10-K, File
No. 1-3446); Supplementary Power Contract dated as of
April 1, 1987 (Exhibit 10(c) to 1987 Form 10-K, File
No. 0-1229); Capital Funds Agreement dated September 1,
1964 (Exhibit 13-9-C, File No. 2-23006); Transmission
Agreement dated October 1, 1964 (Exhibit 13-9-D, File
No. 2-23006); Agreement revising Transmission Agreement
dated July 1, 1979 (Exhibit to NEES' 1979 Form 10-K,
File No. 1-3446); Amendment revising Transmission
Agreement dated as of January 19, 1994 (Exhibit 10(c)
to NEES' 1995 Form 10-K, File No. 1-3446); Five Year
Capital Contribution Agreement dated November 1, 1980
(Exhibit 10(e) to NEES' 1980 Form 10-K, File No.
1-3446).
(d) Maine Yankee Atomic Power Company et al. and the
Company: Capital Funds Agreement dated May 20, 1968
and Power Purchase Contract dated May 20, 1968 (Exhibit
4-5, File No. 2-29145); Amendments dated as of January
1, 1984, March 1, 1984 (Exhibit 10(d) to NEES' 1983
Form 10-K, File No. 1-3446); October 1, 1984, and
August 1, 1985 (Exhibit 10(d) to NEES' 1985 Form 10-K,
File No. 1-3446); Stockholders Agreement dated May 20,
1968 (Exhibit 10-20; File No. 2-34267); Additional
Power Contract dated as of February 1, 1984 (Exhibit
10(d) to NEES' 1985 Form 10-K, File No. 1-3446); 1997
Amendatory Agreement dated as of August 6, 1997
(Exhibit 10(d) to NEES' 1997 Form 10-K, File No. 1-
3446).
(e) Mass. Electric and the Company: Primary Service for
Resale dated February 15, 1974 (Exhibit 5-17(a), File
No. 2-52969); Amendment of Service Agreement dated
June 22, 1983 (Exhibit 10(b) to Mass. Electric's 1986
Form 10-K, File No. 0-5464); Amendment of Service
Agreement effective November 1, 1993 (Exhibit 10(e) to
1993 Form 10-K, File No. 0-1229); Memorandum of
Understanding effective May 22, 1994 (Exhibit 10(e) to
1994 Form 10-K, File No. 0-1229); Amendment of Service
Agreement effective July 1, 1996 and, Amendment to
Service Agreement dated as of February 1, 1997 (Exhibit
10(e) to 1997 Form 10-K, File No. 1-3446); Supplement
to Amendment to Service Agreement dated as of March 1,
1998; (Exhibit 10(e) to 1998 Form 10-K, File No. 1-
3446); Supplement to Service Agreement effective
December 31, 1999 (filed herewith).
(f) The Narragansett Electric Company and the Company:
Primary Service for Resale dated February 15, 1974
(Exhibit 4-1(b), File No. 2-51292); Amendment of
Service Agreement dated July 26, 1990 (Exhibit 4(f) to
New England Power Company's 1990 Form 10-K, File No.
0-1229). Amendment of Service Agreement dated July 24,
1991 (Exhibit 10(f) to 1991 Form 10-K, File No. 0-
1229); Amendment of Service Agreement effective
November 1, 1993 (Exhibit 10(f) to 1993 Form 10-K, File
No. 0-1229); Memorandum of Understanding effective May
22, 1994 (Exhibit 10(e) to 1994 Form 10-K, File No. 0-
1229); Amendment of Service Agreement effective January
1, 1995 (Exhibit 10(f) to 1995 Form 10-K, File No. 0-
1229); Amendment of Service Agreement effective October
30, 1995 and, Amendment to Service Agreement dated as
of February 1, 1997 (Exhibit 10(f) to 1997 Form 10-K,
File No. 1-3446); Supplement to Amendment to Service
Agreement dated as of December 31, 1998 (Exhibit 10(f)
to 1998 Form 10-K, File No. 1-3446); Supplement to
Service Agreement effective December 31, 1999 (filed
herewith).
(g) New England Electric Transmission Corporation et al.
and the Company: Phase I Terminal Facility Support
Agreement dated as of December 1, 1981 (Exhibit 10(g)
to NEES' 1981 Form 10-K, File No. 1-3446); Amendments
dated as of June 1, 1982 and November 1, 1982 (Exhibit
10(f) to NEES' 1982 Form 10-K, File No. 1-3446);
Agreement with respect to Use of the Quebec
Interconnection dated as of December 1, 1981 (Exhibit
10(g) to NEES' 1981 Form 10-K, File No. 1-3446);
Amendments dated as of May 1, 1982 and November 1, 1982
(Exhibit 10(f) to NEES' 1982 Form 10-K, File No.
1-3446); Amendment dated as of January 1, 1986 (Exhibit
10(f) to NEES' 1986 Form 10-K, File No. 1-3446);
Agreement for Reinforcement and Improvement of the
Company's Transmission System dated as of April 1, 1983
(Exhibit 10(f) to NEES' 1983 Form 10-K, File No.
1-3446); Lease dated as of May 16, 1983 (Exhibit 10(f)
to NEES' 1983 Form 10-K, File No. 1-3446); Upper
Development-Lower Development Transmission Line Support
Agreement dated as of May 16, 1983 (Exhibit 10(f) to
NEES' 1983 Form 10-K, File No. 1-3446).
(h) Vermont Electric Transmission Company, Inc. et al. and
the Company: Phase I Vermont Transmission Line Support
Agreement dated as of December 1, 1981; Amendments
dated as of June 1, 1982 and November 1, 1982 (Exhibit
10(g) to NEES' 1982 Form 10-K, File No. 1-3446);
Amendment dated as of January 1, 1986 (Exhibit 10(h) to
NEES' 1986 Form 10-K, File No. 1-3446).
(i) New England Power Pool Agreement: (Exhibit 4(e), File
No. 2-43025); Amendments dated July 1, 1972, March 1,
1973 (Exhibit 10-15, File No. 2-48543); Amendment dated
March 15, 1974 (Exhibit 10-5, File No. 2-52775);
Amendment dated June 1, 1975 (Exhibit 10-14, File No.
2-57831); Amendment dated September 1, 1975 (Exhibit
10-13, File No. 2-59182); Amendments dated December 31,
1976, January 31, 1977, July 1, 1977, and August 1,
1977 (Exhibit 10-16, File No. 2-61881); Amendments
dated August 15, 1978, January 3, 1980, and February
1980 (Exhibit 10-3, File No. 2-68283); Amendment dated
September 1, 1981 (Exhibit 10(h) to NEES' 1981 Form
10-K, File No. 1-3446); Amendment dated December 1,
1981 (Exhibit 10(h) to NEES' 1982 Form 10-K, File No.
1-3446); Amendments dated June 1, 1982, June 15, 1983,
and October 1, 1983 (Exhibit 10(i) to NEES' 1983 Form
10-K, File 1-3446); Amendments dated August 1, 1985,
August 15, 1985, September 1, 1985, and January 1, 1986
(Exhibit 10(i) to NEES' 1985 Form 10-K, File No.
1-3446); Amendment dated September 1, 1986 (Exhibit
10(i) to NEES' 1986 Form 10-K, File No. 1-3446);
Amendment dated April 30, 1987 (Exhibit 10(i) to NEES'
1987 Form 10-K, File No. 1-3446); Amendments dated
March 1, 1988 and May 1, 1988 (Exhibit 10(i) to NEES'
1988 Form 10-K, File No. 1-3446); Amendment dated
March 15, 1989 (Exhibit 10(i) to 1989 NEES Form 10-K,
File No. 1-3446); Amendment dated October 1, 1990
(Exhibit 10(i) to 1990 NEES Form 10-K, File No.
1-3446); Amendment dated October 1, 1990 Exhibit 10(i)
to 1990 NEES Form 10-K, File No. 1-3446); Amendment
dated as of September 15, 1992 (Exhibit 10(i) to 1992
NEES Form 10-K, File No. 1-3446); Amendments dated as
of June 1, 1993, July 1, 1995, and September 1, 1995
(Exhibit 10(i) to 1995 NEES Form 10-K, File No. 1-
3446); Amendment dated as of December 1, 1996 (Exhibit
10(i) to 1996 NEES Form 10-K, File No. 1-3446).
Amendment dated as of September 1, 1997 and Amendment
dated as of November 15, 1997 (Exhibit 10(i) to 1997
NEES Form 10-K, File No. 1-3446); Second Restated New
England Power Pool Agreement as amended through the
Fifty-first Agreement amending the New England Power
Pool Agreement issued on December 30, 1999 (filed
herewith)
(j) New England Power Service Company and the Company:
Specimen of Service Contract (Exhibit 10(l) to 1994
Form 10-K, File No. 0-1229).
(k) Massachusetts Electric Company, et al. and the Company:
Form of Mutual Assistance Agreement (Exhibit 10(n) to
1996 Form 10-K, File No. 0-1229).
(l) Massachusetts Electric Company, et al. and the Company:
Restructuring Settlement Agreement approved by the
Massachusetts Department of Public Utilities (Exhibit
10(o) to 1996 Form 10-K, File No. 0-1229).
(m) Public Service Company of New Hampshire et al. and the
Company: Agreement for Joint Ownership, Construction
and Operation of New Hampshire Nuclear Units dated as
of May 1, 1973; Amendments dated May 24, 1974, June 21,
1974, September 25, 1974 and October 25, 1974 (Exhibit
10-18(b), File No. 2-52820); Amendment dated
January 31, 1975 (Exhibit 10-16(b), File No. 2-57831);
Amendments dated April 18, 1979, April 25, 1979,
June 8, 1979, October 11, 1979, December 15, 1979,
June 16, 1980, and December 31, 1980 (Exhibit 10(i) to
NEES' 1980 Form 10-K, File No. 1-3446); Amendments
dated June 1, 1982, April 27, 1984, and June 15, 1984
(Exhibit 10(j) to NEES' 1984 Form 10-K, File No.
1-3446); Amendments dated March 8, 1985, March 14,
1986, May 1, 1986, and September 19, 1986 (Exhibit
10(j) to NEES' 1986 Form 10-K, File No. 1-3446);
Amendment dated November 12, 1987 (Exhibit 10(j) to
NEES' 1987 Form 10-K, File No. 1-3446); Amendment dated
January 13, 1989 (Exhibit 10(j) to NEES' 1990 Form
10-K, File No. 1-3446); Seventh Amendment as of
November 1, 1990 (Exhibit 10(m) to NEES' 1991 Form
10-K, File No. 1-3446). Transmission Support Agreement
dated as of May 1, 1973 (Exhibit 10-23, File No.
2-49184); Instrument of Transfer to the Company with
respect to the New Hampshire Nuclear Units and
Assumptions of Obligations dated December 17, 1975 and
Agreement Among Participants in New Hampshire Nuclear
Units, certain Massachusetts Municipal Systems and
Massachusetts Municipal Wholesale Electric Company
dated May 28, 1976 (Exhibit 16(c), File No. 2-57831);
Seventh Amendment To and Restated Agreement for
Seabrook Project Disbursing Agent dated as of
November 1, 1990 (Exhibit 10(m) to NEES' 1991 Form
10-K, File No. 1-3446); Amendments dated as of June 29,
1992 (Exhibit 10(j) to NEES' 1992 Form 10-K, File No.
1- 3446). Settlement Agreement dated as of July 19,
1990 between Northeast Utilities Service Company and
the Company (Exhibit 10(m) to NEES' 1991 Form 10-K,
File No. 1-3446). Seabrook Project Managing Agent
Operating Agreement dated as of June 29, 1992,
Amendment to Seabrook Project Managing Agent Operating
Agreement dated as of June 29, 1992 (Exhibit 10(j) to
NEES' 1992 Form 10-K, File No. 1- 3446).
(n) Vermont Yankee Nuclear Power Corporation et al. and the
Company: Capital Funds Agreement dated February 1,
1968, Amendment dated March 12, 1968 and Power Purchase
Contract dated February 1, 1968 (Exhibit 4-6, File No.
2-29145); Amendments dated as of June 1, 1972,
April 15, 1983 (Exhibit 10(k) to NEES' 1983 Form 10-K,
File No. 0-1229) and April 24, 1985 (Exhibit 10(n) to
NEES' 1985 Form 10-K, File No. 1-3446); Amendment dated
as of June 1, 1985 (Exhibit 10(n) to 1988 Form 10-K,
File No. 0-1229); Amendments dated May 6, 1988 (Exhibit
10(n) to 1988 Form 10-K, File No. 0-1229); Amendment
dated as of June 15, 1989 (Exhibit 10(k) to 1989 NEES
Form 10-K, File No. 1-3446); Additional Power Contract
dated as of February 1, 1984 (Exhibit 10(k) to NEES'
1983 Form 10-K, File No. 1-3446); Guarantee Agreement
dated as of November 5, 1981 (Exhibit 10(j) to NEES'
1981 Form 10-K, File No. 1-3446); 1999 Amendatory
Agreement dated as of November 17, 1999 and 1999
Restated Amendatory Agreement dated as of November 17,
1999 (filed herewith)
(o) Yankee Atomic Electric Company et al. and the Company:
Amended and Restated Power Contract dated April 1, 1985
(Exhibit 10(l) to NEES' 1985 Form 10-K, File No.
1-3446); Amendment dated May 6, 1988 (Exhibit 10(l) to
NEES' 1988 Form 10-K, File No. 1-3446); Amendments
dated as of June 26, 1989 and July 1, 1989 (Exhibit
10(l) to 1989 NEES Form 10-K, File No. 1-3446);
Amendment dated as of February 1, 1992 (Exhibit 10(l)
to 1992 NEES Form 10-K, File No. 1-3446).
*(p) New England Electric Companies' Deferred Compensation
Plan as amended through February 28, 1998 (Exhibit
10(l) to NEES' 1998 Form 10-K, File No. 1-3446);
Amendments effective as of March 1, 1999 and September
1, 1999 (filed herewith)
*(q) New England Electric System Companies Retirement
Supplement Plan as amended through June 1, 1996
(Exhibit 10(n) to NEES' 1996 Form 10-K, File No.
1-3446); Amendment dated as of March 1, 1999 (filed
herewith)
*(r) New England Electric Companies' Executive Supplemental
Retirement Plan I as amended through December 11, 1998
(Exhibit 10(n) to NEES' 1998 Form 10-K, File No.
1-3446); Amendment dated as of March 1, 1999 (filed
herewith)
*(s) New England Electric Companies Executive Retirees
Health and Life Insurance Plan as Amended and Restated
January 1, 1996 (Exhibit 10(o) to NEES' 1998 Form 10-K,
File No. 1-3446).
*(t) New England Electric Companies' Incentive Compensation
Plan I as amended through January 1, 1998 (Exhibit
10(p) to NEES' 1998 Form 10-K, File No. 1-3446).
*(u) New England Electric Companies' Incentive Compensation
Plan II as amended through January 1, 1998 (Exhibit
10(q) to NEES' 1998 Form 10-K, File No. 1-3446).
*(v) New England Electric Companies' Incentive Compensation
Plan III as amended through January 1, 1998 (Exhibit
10(r) to NEES' 1998 Form 10-K, File No. 1-3446).
*(w) New England Electric Companies' Senior Incentive
Compensation Plan as amended through January 1, 1998
(Exhibit 10(s) to NEES' 1998 Form 10-K, File No.
1-3446).
*(x) Forms of Life Insurance Program (Exhibit 10(s) to NEES'
1986 Form 10-K, File No. 1-3446); and Form of Life
Insurance (Collateral Assignment) (Exhibit 10(t) to
NEES' 1991 Form 10-K, File No. 1-3446).
*(y) New England Electric Companies' Incentive Share Plan as
amended through February 24, 1997 (Exhibit 10(w) to
NEES' 1996 Form 10-K, File No. 1-3446); Amendment dated
as of March 1, 1999 (filed herewith)
*(z) Forms of Severance Protection Agreement (Exhibit 10(z)
to NEES' 1996 Form 10-K, File No. 1-3446). Forms of
Severance Protection Agreements (Exhibit 10(y) to NEES'
1998 Form 10-K, File No. 1-3446).
*(aa) New England Electric Companies' Long-Term
Performance Share Award Plan amended through
August 25, 1998 (Exhibit 10(w) to NEES' 1998 Form
10-K, File No. 1-3446); Amendment dated as of
March 1, 1999 (filed herewith)
(bb) New England Hydro-Transmission Electric Company,
Inc. et al. and the Company: Phase II
Massachusetts Transmission Facilities Support
Agreement dated as of June 1, 1985 (Exhibit 10(t)
to NEES' 1986 Form 10-K, File No. 1-3446);
Amendment dated as of May 1, 1986 (Exhibit 10(t)
to NEES' 1986 Form 10-K, File No. 1-3446);
Amendments dated as of February 1, 1987, June 1,
1987, September 1, 1987, and October 1, 1987
(Exhibit 10(u) to NEES' 1987 Form 10-K, File No.
1-3446); Amendment dated as of August 1, 1988
(Exhibit 10(u) to NEES' 1988 Form 10-K, File No.
1-3446); Amendment dated January 1, 1989 (Exhibit
10(u) to NEES' 1990 Form 10-K, File No. 1-3446).
(cc) New England Hydro-Transmission Corporation et al.
and the Company: Phase II New Hampshire
Transmission Facilities Support Agreement dated as
of June 1, 1985 (Exhibit 10(u) to NEES' 1986 Form
10-K, File No. 1-3446); Amendment dated as of
May 1, 1986 (Exhibit 10(u) to NEES' 1986 Form
10-K, File No. 1-3446); Amendments dated as of
February 1, 1987, June 1, 1987, September 1, 1987,
and October 1, 1987 (Exhibit 10(v) to NEES' 1987
Form 10-K, File No. 1-3446). Amendment dated as
of August 1, 1988 (Exhibit 10(v) to NEES' 1988
Form 10-K, File No. 1-3446); Amendments dated
January 1, 1989 and January 1, 1990 (Exhibit 10
(v) to NEES' 1990 Form 10-K, File No. 1-3446).
(dd) Vermont Electric Power Company et al. and the
Company: Phase II New England Power AC Facilities
Support Agreement dated as of June 1, 1985
(Exhibit 10(v) to NEES' 1986 Form 10-K, File No.
1-3446); Amendment dated as of May 1, 1986
(Exhibit 10(v) to NEES' 1986 Form 10-K, File No.
1-3446). Amendments dated as of February 1, 1987,
June 1, 1987, and September 1, 1987 (Exhibit 10(w)
to NEES' 1987 Form 10-K, File No. 1-3446);
Amendment dated as of August 1, 1988 (Exhibit
10(w) to NEES' 1988 Form 10-K, File No. 1-3446).
(ee) USGen New England Contracts
(i) Asset Purchase Agreement among the Company,
The Narragansett Electric Company and, USGen
New England, Inc. dated as of August 5, 1997
(Exhibit 2 to NEES' Form 10-Q for period
ended September 30, 1997, File No. 1-3446);
Amendment No. 1 dated as of September 25,
1997, Amendment No. 2 dated as of October 29,
1997, Amendment No. 3 dated as of August 5,
1997, Amendment No. 4 dated as of September
1, 1998 (filed herewith)
(ii) Wholesale Sales Agreement between the Company
and USGen New England, Inc. dated as of
August 5, 1997 (Exhibit 10(gg)(ii) to 1997
Form 10-K, File No. 1-6564); Amendment No. 1
dated as of September 25, 1997, Amendment No.
2 dated as of September 1, 1998 (filed
herewith)
(iii) PPA Transfer Agreement between the Company
and USGen New England, Inc. dated as of
August 5, 1997 (Exhibit 10(gg)(iii) to 1997
Form 10-K, File No. 1-6564).
(iv) Form of PSA Performance Support Agreement
between the Company, USGen New England, Inc.,
and each of the following; North Attleboro
Electric Department, Groton Electric Light
Department, Middleton Municipal Electric
Department, Hingham Municipal Lighting Plant,
Town of Holden Municipal Light Department,
Unitil Power Corp. (Salem Harbor), Unitil
Power Corp. (Ocean State), Bangor Hydro-
Electric Company, Montaup Electric Company,
Central Vermont Public Service Corporation,
Braintree Electric Light Department,
Littleton Electric Light Department,
Massachusetts Government Land Bank, Reading
(MA) Municipal Light Department, Shrewsbury
Electric Light Plant, Taunton Municipal Light
Plant, and Vermont Electric Company, dated as
of August 5, 1997 (Exhibit 10(gg)(iv) to 1997
Form 10-K, File No. 1-6564).
(v) Quebec Interconnection Transfer Agreement
between the Company, The Narragansett
Electric Company, and USGen New England, Inc.
dated as of September 1, 1998 (filed
herewith).
* Compensation related plan, contract, or arrangement.
(13) 1999 Annual Report to Stockholders (filed herewith).
(21) Subsidiary list (filed herewith).
(24) Power of Attorney (filed herewith).
(27) Financial Data Schedule (filed herewith).
Reports on Form 8-K
NEP filed reports on Form 8-K dated October 21, 1999, October
29, 1999, November 29, 1999, and December 10, 1999, each of which
contained ITEM 5.
NEW ENGLAND POWER COMPANY
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. The signature
of the undersigned company shall be deemed to relate only to matters having
reference to such company.
NEW ENGLAND POWER COMPANY
s/Peter G. Flynn
Peter G. Flynn
President
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 date indicated. The signature of
each of the undersigned shall be deemed to relate only to matters having
reference to the above-named company.
(Signature and Title)
Principal Executive Officer
s/Peter G. Flynn
Peter G. Flynn
President
Principal Financial Officer
s/John G. Cochrane
John G. Cochrane
Treasurer
Principal Accounting Officer
s/Kwong O. Nuey
Kwong O. Nuey
Controller
Directors (a majority)
Cynthia A. Arcate
L. Joseph Callan
Peter G. Flynn
Alfred D. Houston
Cheryl A. LaFleur s/John G. Cochrane
Richard P. Sergel All by:
Philip R. Sharp John G. Cochrane
Attorney-in-fact
Date (as to all signatures on this page)
March 30, 2000
NEW ENGLAND POWER COMPANY
INDEX TO FINANCIAL STATEMENTS
References (Page)
----------------------
1999 Annual
Form Report to
10-K Shareholders*
---- -------------
Report of Independent Accountants........................... 4
Statements of Income,
Year Ended December 31, 1999, 1998 and 1997............... 15
Statements of Retained Earnings,
Year Ended December 31, 1999, 1998 and 1997............... 15
Balance Sheets, December 31, 1999 and 1998.................. 16
Statements of Cash Flows,
Year Ended December 31, 1999, 1998 and 1997............... 17
Notes to Financial Statements............................... 18-42
* Incorporated by Reference.
NEP
EXHIBIT INDEX
-------------
Exhibit No. Description Page
- ----------- ----------- ----
(3)(a) Articles of Organization as Incorporated
amended through June 25, 1987 by Reference
(3)(b) By-laws of the Company as Incorporated
amended December 12, 1997 by Reference
(10)(a) Boston Edison Company et al. Incorporated
and the Company: Amended by Reference
REMVEC Agreement dated
August 12, 1977
(10)(a)(i) Boston Edison Company et al. Incorporated
and the Company: REMVEC II by Reference
Agreement dated on or about
July 1, 1997
(10)(a)(ii) Boston Edison Company et al. Incorporated
and the Company: Security by Reference
Analysis Services Agreement
dated on or about July 1, 1997
(10)(b) The Connecticut Light and Power Incorporated
Company et al. and the Company: by Reference
Sharing Agreement for Joint
Ownership, Construction and
Operation of Millstone Unit No. 3
dated as of September 1, 1973,
and Amendments thereto;
Transmission Support Agreement
dated August 9, 1974; Instrument
of Transfer to the Company with
respect to the 1979 Connecticut
Nuclear Unit, and Assumption of
Obligations, dated December 17,
1975
(10)(c) Connecticut Yankee Atomic Power Incorporated
Company et al. and the Company: by Reference
Stockholders Agreement dated
July 1, 1964; Power Purchase
Contract dated July 1, 1964;
Additional Power Contract dated
as of April 30, 1984 and 1996;
Amendatory Agreement dated as
of December 4, 1996;
Supplementary Power Contract
dated as of April 1, 1987;
Capital Funds Agreement dated
September 1, 1964; Transmission
Agreement dated October 1, 1964;
Agreement revising Transmission
Agreement dated July 1, 1979;
Amendment revising Transmission
Agreement dated as of January 19,
1994; Five Year Capital Contribution
Agreement dated November 1, 1980
(10)(d) Maine Yankee Atomic Power Incorporated
Company et al. and the Company: by Reference
Capital Funds Agreement dated
May 20, 1968 and Power Purchase
Contract dated May 20, 1968;
and Amendments thereto;
Stockholders Agreement dated
May 20, 1968; Additional Power
Contract dated as of February 1,
1984; 1997 Amendatory Agreement
dated as of August 6, 1997
(10)(e) Mass. Electric and the Company: Incorporated
Primary Service for Resale dated by Reference
February 15, 1974; and Amendments
thereto; Memorandum of Understanding
effective May 22, 1994;
Amendment of Service Agreement
effective July 1, 1996;
Amendment to Service Agreement
dated as of February 1, 1997;
Supplement to Amendment to Service
Agreement dated as of March 1, 1998
Supplement to Service Filed herewith
Agreement dated as of
December 31, 1999
(10)(f) The Narragansett Electric Incorporated
Company and the Company: by Reference
Primary Service for Resale
dated February 15, 1974
and Amendments thereto;
Memorandum of Understanding
effective May 22, 1994 and
Amendment thereto;
Amendment of Service Agreement
effective October 30, 1995;
Amendment to Service Agreement
dated as of February 1, 1997;
Supplement to Amendment to
Service Agreement dated as of
December 31, 1998
Supplement to Service Filed herewith
Agreement dated as of
December 31, 1999
(10)(g) New England Electric Incorporated
Transmission Corporation et al. by Reference
and the Company: Phase I
Terminal Facility Support
Agreement dated as of
December 1, 1981; Amendments
dated as of June 1, 1982 and
November 1, 1982; Agreement with
respect to Use of the Quebec
Interconnection dated as of
December 1, 1981; Amendments
dated as of May 1, 1982 and
November 1, 1982; Amendment
dated as of January 1, 1986;
Agreement for Reinforcement
and Improvement of the Company's
Transmission System dated as
of April 1, 1983; Lease dated
as of May 16, 1983; Upper
Development-Lower Development
Transmission Line Support
Agreement dated as of May 16,
1983
(10)(h) Vermont Electric Transmission Incorporated
Company, Inc. et al. and the by Reference
Company: Phase I Vermont
Transmission Line Support
Agreement dated as of
December 1, 1981 and Amendments
thereto
(10)(i) New England Power Pool Filed herewith
Agreement and Amendments
thereto
(10)(j) New England Power Service Incorporated
Company and the Company: by Reference
Specimen of Service Contract
(10)(k) Massachusetts Electric Incorporated
Company, et al. and the by Reference
Company: Form of Mutual
Assistance Agreement
(10)(l) Massachusetts Electric Incorporated
Company, et al. and the by Reference
Company: Restructuring
Settlement Agreement
approved by the Massachusetts
Department of Public Utilities
(10)(m) Public Service Company of New Incorporated
Hampshire et al. and the by Reference
Company: Agreement for Joint
Ownership, Construction and
Operation of New Hampshire
Nuclear Units dated as of
May 1, 1973 and Amendments
thereto; Seventh Amendment
as of November 1, 1990;
Transmission Support Agreement
dated as of May 1, 1973;
Instrument of Transfer to the
Company with respect to the New
Hampshire Nuclear Units and
Assumptions of Obligations
dated December 17, 1975 and
Agreement Among Participants
in New Hampshire Nuclear Units,
certain Massachusetts Municipal
Systems and Massachusetts
Municipal Wholesale Electric
Company dated May 28, 1976;
Seventh Amendment To and
Restated Agreement for Seabrook
Project Disbursing Agent dated
as of November 1, 1990;
Amendments dated as of
June 29, 1992;
Settlement Agreement dated as
of July 19, 1990 between
Northeast Utilities Service
Company and the Company;
Seabrook Project Managing
Agent Operating Agreement
dated as of June 29, 1992;
and Amendment thereto
(10)(n) Vermont Yankee Nuclear Power Incorporated
Corporation et al. and the by Reference
Company: Capital Funds
Agreement dated February 1,
1968, Amendment dated March 12,
1968 and Power Purchase Contract
dated February 1, 1968 and
Amendments thereto; Additional
Power Contract dated as of
February 1, 1984; Guarantee
Agreement dated as of November 5,
1981
1999 Amendatory Agreements Filed herewith
(10)(o) Yankee Atomic Electric Company Incorporated
et al. and the Company: by Reference
Amended and Restated Power
Contract dated April 1, 1985
and Amendments thereto
(10)(p) New England Electric Companies' Filed herewith
Deferred Compensation Plan as
amended through February 28,
1998 and amendments thereto
(10)(q) New England Electric System Filed herewith
Companies Retirement Supplement
Plan as amended through June 1,
1996 and an Amendment thereto
(10)(r) New England Electric Companies' Filed herewith
Executive Supplemental Retirement
Plan I as amended through
December 11, 1998 and an Amendment
thereto
(10)(s) New England Electric Companies' Incorporated
Executive Retirees Health and Life by Reference
Insurance Plan as Amended and
Restated January 1, 1996
(10)(t) New England Electric Companies' Incorporated
Incentive Compensation Plan I as by Reference
amended through January 1, 1998
(10)(u) New England Electric Companies' Incorporated
Incentive Compensation Plan II as by Reference
amended through January 1, 1998
(10)(v) New England Electric Companies' Incorporated
Incentive Compensation Plan III as by Reference
amended through January 1, 1998
(10)(w) New England Electric Companies' Incorporated
Senior Incentive Compensation by Reference
Plan as amended through
January 1, 1998
(10)(x) Forms of Life Insurance Program Incorporated
and Form of Life Insurance by Reference
(Collateral Assignment)
(10)(y) New England Electric Companies' Filed herewith
Incentive Share Plan as amended
through February 24, 1997 and an
Amendment thereto
(10)(z) Forms of Severance Protection Incorporated
Agreements by Reference
(10)(aa) New England Electric Companies' Filed herewith
Long-Term Performance Share
Award Plan amended through
August 25, 1998 and Amendments
thereto
(10)(bb) New England Hydro-Transmission Incorporated
Electric Company, Inc. et al. by Reference
and the Company: Phase II
Massachusetts Transmission
Facilities Support Agreement
dated as of June 1, 1985
and Amendments thereto
(10)(cc) New England Hydro-Transmission Incorporated
Corporation et al. and the by Reference
Company: Phase II New Hampshire
Transmission Facilities Support
Agreement dated as of June 1,
1985 and Amendments thereto
(10)(dd) Vermont Electric Power Company Incorporated
et al. and the Company: Phase by Reference
II New England Power AC
Facilities Support Agreement
dated as of June 1, 1985 and
Amendments thereto
(10)(ee)(i) Asset Purchase Agreement between Incorporated
USGen New England and the Company by Reference
and The Narragansett Electric
Company dated as of August 5, 1997
(10)(ee)(ii) Wholesale Sales Agreement between Incorporated
the Company and USGen New England, by Reference
Inc. dated as of August 5, 1997
(10)(ee)(iii) PPA Transfer Agreement between Incorporated
the Company and USGen New England, by Reference
Inc. dated as of August 5, 1997
(10)(ee)(iv) Form of PSA Performance Support Incorporated
Agreement between the Company, by Reference
USGen New England, Inc., and
various Wholesale Customers
dated as of August 5, 1997
(10)(ee)(v) Quebec Interconnection Transfer Filed herewith
Agreement between the Company,
The Narragansett Electric Company,
and USGen New England, Inc.,
dated as of September 1, 1998
(13) 1999 Annual Report to Filed herewith
Stockholders
(21) Subsidiary list Filed herewith
(24) Power of Attorney Filed herewith
(27) Financial Data Schedule Filed herewith