SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
FORM 10-Q
__________
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1995 OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________TO________
COMMISSION FILE NUMBER 0-10721
YANKEE ENERGY SYSTEM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CONNECTICUT 06-1236430
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
599 RESEARCH PARKWAY
MERIDEN, CONNECTICUT 06450-1030
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER (203) 639-4000
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED
SINCE LAST REPORT)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No ____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
NUMBER OF SHARES OF COMMON STOCK ($5.00 PAR VALUE)
OUTSTANDING AT JANUARY 31, 1996 10,424,457
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - December
31, 1995 and September 30, 1995
Consolidated Statements of Income -
Three Months Ended December 31, 1995
and 1994
Consolidated Statements of Cash Flows -
Three Months Ended December 31, 1995
and 1994
Notes to Consolidated Financial
Statements
Report on Review by Independent
Public Accountants
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations
PART 11. OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
PART 1. FINANCIAL INFORMATION
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, SEPTEMBER 30,
1995 1995
____ ____
(UNAUDITED)
(Thousands of Dollars)
ASSETS
Utility Plant, at original cost $ 494,334 $ 488,540
Less: Accumulated provision for
depreciation 176,105 174,522
_________ _________
318,229 314,018
Construction work in progress 7,568 10,852
_________ _________
Total Net Utility Plant 325,797 324,870
_________ _________
Other Property and Investments 30,302 30,565
_________ _________
Current Assets:
Cash and temporary cash investments 1,075 725
Accounts receivable, net 45,770 22,044
Fuel supplies 8,966 10,611
Other materials and supplies 1,527 1,625
Recoverable gas costs 1,237 1,713
Accrued utility revenues 22,060 5,638
Prepaid taxes --- 281
Other 3,524 4,069
_________ _________
Total Current Assets 84,159 46,706
_________ _________
Deferred Gas Costs --- 2,261
Recoverable Environmental
Cleanup Costs 38,331 38,331
Recoverable Income Taxes 24,964 27,575
Recoverable Postretirement
Benefits Costs 1,329 2,390
Other Deferred Debits 13,057 6,603
________ __________
Total Assets $ 517,939 $ 479,301
________ __________
________ __________
The accompanying notes are an integral part of these financial
statements.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, SEPTEMBER 30,
1995 1995
____ ____
(UNAUDITED)
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shares - $5.00 par value.
Authorized 20,000,000 shares; 10,422,068
shares outstanding at December 31, 1995
and 10,396,522 outstanding at
September 30, 1995 $ 52,110 $ 51,982
Capital surplus, paid in 87,373 86,862
Retained earnings 21,267 14,709
Employee stock ownership
plan guarantee (1,400) (1,800)
_________ _______
Total Common Shareholders' Equity 159,350 151,753
Long-term debt, net of current portion 140,499 141,049
_________ _______
Total Capitalization 299,849 292,802
_________ _______
Current Liabilities:
Notes payable to banks 45,216 28,525
Long-term debt, current portion 3,917 5,917
Accounts payable 23,625 18,300
Accrued interest 4,012 3,569
Accrued taxes 7,485 ---
Refundable gas costs 343 697
Pipeline transition costs payable 603 962
Other 9,700 5,593
________ ________
Total Current Liabilities 94,901 63,563
________ ________
Accumulated Deferred Income Taxes 41,337 39,513
Unfunded Deferred Income Taxes 24,941 27,557
Accumulated Deferred Investment
Tax Credits 9,363 9,457
Reserve for Environmental Cleanup Costs 35,000 35,000
Unfunded Postretirement Benefits Costs 2,632 2,390
Other Deferred Credits 9,916 9,019
_______ _______
Commitments and Contingencies (Note 3)
Total Capitalization and
Liabilities $ 517,939 $ 479,301
________ ________
________ ________
The accompanying notes are an integral part of these financial
statements.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED
DECEMBER 31,
__________________
1995 1994
____ ____
(Thousands of Dollars, Except
Share Information)
Operating Revenues $ 98,158 $ 82,284
Less: Cost of Gas 53,419 43,781
______ ______
Revenues, net of cost of gas 44,739 38,503
______ ______
Other Operating Expenses:
Operations 13,160 12,598
Maintenance 1,487 1,397
Depreciation 4,150 4,050
Federal and state income taxes 7,705 4,926
Taxes other than income taxes 5,631 5,281
Organizational charges 93 ---
______ ______
Total Other Operating Expenses 32,226 28,252
______ ______
Operating Income 12,513 10,251
Other Income, net 1,276 919
______ ______
Income Before Interest Charges 13,789 11,170
Interest Charges, net 3,952 3,711
______ ______
Net Income $ 9,837 $ 7,459
______ _____
______ _____
Total Earnings per Common Share $ 0.95 $ 0.73
______ _____
______ _____
Average Common Shares
Outstanding 10,408,970 10,287,683
___________ __________
___________ __________
The accompanying notes are an integral part of these financial
statements.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED
DECEMBER 31,
1995 1994
____ ____
(Thousands of Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 9,837 $ 7,459
Adjusted for the following:
Depreciation 4,150 4,050
Equity earnings from investments (1,396) (1,013)
Deferred income taxes, net 1,523 (605)
Deferred gas cost activity and other
non-cash items 2,271 5,422
Changes in working capital:
Accounts receivable and accrued
utility revenues (40,148) (23,455)
Accounts payable 5,325 176
Accrued taxes 7,767 7,017
Other working capital
(excludes cash) 2,915 1,582
________ _______
Net cash provided by (used for)
operating activities (7,756) 633
_________ _______
CASH FLOWS FROM FINANCING ACTIVITES:
Premium on common stock issuance 475 ---
Issuance of common stock 127 ---
Retirement of long-term debt (2,550) (5,300)
Increase (decrease) in short-term debt 16,691 12,600
Cash dividends-common stock (3,277) (3,138)
_________ ________
Net cash provided by financing
activities 11,466 4,162
________ ________
INVESTMENT IN PLANT AND OTHER:
Utility Plant, net of allowance for other
funds used during construction (4,896) (4,931)
Other property and investments (39) ---
Iroquois distribution 1,575 735
_______ _______
Net cash used for plant and other
investments (3,360) (4,196)
________ _______
NET INCREASE (DECREASE) IN CASH AND
TEMPORARY CASH INVESTMENTS FOR THE
PERIOD 350 599
Cash and Temporary Cash Investments,
beginning of period 725 602
________ _______
Cash and Temporary Cash Investments,
end of period $ 1,075 $ 1,201
________ _______
________ _______
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest, net of amounts capitalized $ 3,319 $ 3,525
Income taxes $ 3,256 $ 25
The accompanying notes are an integral part of these financial
statements.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1) GENERAL
The accompanying unaudited consolidated financial statements
should be read in conjunction with the Annual Report of
Yankee Energy System, Inc. (Yankee Energy or the Company) on
Form 10-K for the fiscal year ended September 30, 1995 (1995
Form 10-K) including the audited financial statements (and
notes thereto) incorporated by reference therein. In the
opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to
present fairly the financial position of the Company as of
December 31, 1995, and its results of operations for the
three months ended December 31, 1995 and 1994 and cash flows
for the three months ended December 31, 1995 and 1994. The
results of operations for the three months ended
December 31, 1995 and 1994 are not necessarily indicative of
the results expected for a full year, due mainly to the
highly seasonal nature of the gas business.
2) ACCOUNTING FOR THE EFFECTS OF REGULATION
The Company's wholly-owned subsidiary, Yankee Gas Services
Company (Yankee Gas), is subject to regulation by the
Connecticut Department of Public Utility Control (DPUC).
The Company prepares its financial statements in accordance
with generally accepted accounting principles which includes
the provisions of Statement of Financial Accounting
Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation," (FAS 71). FAS 71 requires a cost-
based, rate-regulated enterprise such as Yankee Gas to
reflect the impact of regulatory decisions in its financial
statements. The DPUC, through the rate regulation process,
can create regulatory assets that result when costs are
allowed for ratemaking purposes in a period other than the
period in which the costs would be charged to expense by an
unregulated enterprise.
Following the provisions of FAS 71, the Company has recorded
regulatory assets or liabilities as appropriate primarily
related to deferred gas costs, pipeline transition costs,
hardship customer receivables, environmental cleanup costs,
income taxes and postretirement benefits costs. The
specific amounts related to these items are disclosed in the
consolidated balance sheets. For additional information
about these items see the 1995 Form 10-K.
Yankee Gas continues to be subject to cost-of-service based
rate regulation by the DPUC. Based upon current regulation
and recent regulatory decisions, the Company believes that
its use of regulatory accounting is appropriate and in
accordance with the provisions of FAS 71. Iroquois is
subject to regulation by the Federal Energy Regulatory
Commission (FERC).
3) COMMITMENTS AND CONTINGENCIES
TRANSITION COSTS - ORDER NO. 636: The three major pipeline
systems serving Yankee Gas (Iroquois Gas Transmission
System, Tennessee Gas Pipeline Company, and Algonquin Gas
Transmission Company and its affiliate, Texas Eastern
Transmission Company), have all restructured their services
pursuant to Federal Energy Regulatory Commission (FERC)
Order 636. Through December 31, 1995, Yankee Gas has paid
and recovered, in accordance with a July 8, 1994 DPUC
decision, approximately $14.4 million of transition costs
and an additional $0.6 million are anticipated. To date,
Yankee Gas has collected $24.6 million through a combination
of gas supplier refunds, deferred gas costs credits and
excess interruptible margins.
On January 3, 1996, the DPUC approved a Settlement Agreement
between Yankee Gas and the Office of Consumer Counsel (OCC).
This three-year Settlement Agreement provides for the
retention of overcollected transition cost credits to offset
certain deferred expenses. As a result of this Settlement
Agreement, Yankee Gas has stipulated that, except in the
event of certain circumstances which would adversely affect
Yankee Gas' financial condition, it will not increase its
rates prior to September 30, 1998.
FIRM TRANSPORTATION: On August 2, 1995, the DPUC issued a
Final Decision in Docket No. 94-11-12, DPUC Review of
Connecticut Local Distribution Companies' Cost of Service
Study Methodologies. The docket was intended to investigate
the issues surrounding the development of firm
transportation (FT) rates at the state level in response to
FERC Order No. 636. The Decision provides guidelines for
the development of FT rates to be offered by the State's
three Local Distribution Companies (LDCs), one of which is
Yankee Gas. Each LDC filed specific FT rate proposals in
separate company rate dockets. An FT rate option will be
implemented and will be available to all commercial and
industrial customers no later than April 1, 1996.
On September 5, 1995, Yankee Gas submitted an updated cost
of service study and FT tariffs in compliance with the
Decision in Docket No. 92-02-19, Application of Yankee Gas
Services Company for an Increase in Rates - Reopen I. This
filing did not address Yankee Gas' revenue requirements and
maintained the existing margin recovery and rates of return
established in the last rate case decision issued for Yankee
Gas in 1992. A Final Decision was issued on January 24,
1996 requiring the Company to file revised tariffs in
compliance with this Decision no later than February 14,
1996 for implementation on April 1, 1996.
GAS SUPPLY HEDGING ACTIVITIES: The Company has gas service
agreements with two customers to supply gas at fixed prices.
Because the Company purchases gas on a variable price basis,
it has found it necessary to hedge gas prices with
derivatives to respond to customers' need for long term
fixed pricing. Both agreements are similar in structure in
that the Company executed a commodity swap contract with a
commodity trading firm. Under a master commodity swap
agreement, the price of a specified quantity of gas is fixed
over the term of the gas service agreement with the
customer. In both cases, the Company is acting as an agent
using its credit to provide fixed pricing to its customers
using a commodity swap. The Company's results of operations
are unaffected by the hedge transaction given that it passes
through the cost of the hedge to either the commodity
trading firm or its customer depending on the difference in
the fixed and floating prices for gas. Also, the customers
are accountable for all costs incurred by the Company to
execute and maintain the commodity swap contract.
Of the two gas service hedging agreements currently in
force, only one is material relative to the significance of
gas volumes being hedged. This agreement has a ten-year
term and requires the Company to supply approximately one
BCF of gas per year, with relatively low margin, at a fixed
price beginning August 1, 1995. The price is allowed to
escalate by a predetermined rate every year after the first
year. The commodity swap contract for this hedging
agreement was executed August 17, 1994. The Company is
responsible for margin calls collateralizing the commodity
swap contract from August 17, 1994 through the term of the
gas service agreement. Currently, the Company has a letter
of credit in the amount of $3.25 million issued to the
commodity trading firm collateralizing the commodity
contract.
There have been no other material developments in this area.
For a detailed description of the items that comprise
commitments and contingencies of the Company, see the 1995
Form 10-K.
4) ORGANIZATIONAL CHARGES
The Company is currently undergoing a company-wide business
transformation review, the objectives of which are to
improve the efficiency of business processes, reduce costs
and increase revenues. The Company incurred $5.4 million of
organizational charges in fiscal year 1995 and it is
anticipated that the Company will incur additional
organizational charges in fiscal 1996. The amount of any
additional organizational charges has not been determined at
this time.
5) TEMPORARY CASH INVESTMENTS
The Company's temporary cash investments consist of highly
liquid investments with insignificant interest rate risk and
original maturities of three months or less at date of
acquisition.
6) OTHER
The Company issued 25,026 new shares of common stock during
the three months ended December 31, 1995 under its
Shareholder Investment Plan and 520 shares under its Long-
Term Incentive Plan.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Management of
Yankee Energy System, Inc.:
We have reviewed the accompanying consolidated balance sheet of
Yankee Energy System, Inc. (a Connecticut corporation) and
subsidiaries (the Company) as of December 31, 1995, and the
related consolidated statements of income and cash flows for the
three-month period then ended. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the financial statements
referred to above for them to be in conformity with generally
accepted accounting principles.
Arthur Andersen LLP
Hartford, Connecticut
January 31, 1996
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition and
Results of Operations
This section contains management's assessment of the financial
condition of Yankee Energy System, Inc. (the Company or Yankee
Energy) and the principal factors which had an impact on the
results of operations in the periods presented. This discussion
should be read in conjunction with the Company's Annual Report on
Form 10-K for the year ended September 30, 1995, including the
audited consolidated financial statements (and notes thereto)
incorporated by reference therein.
FINANCIAL CONDITION
Overview
Consolidated earnings per share were $0.95 for the three months
ended December 31, 1995 based on 10,408,970 average common
shares, compared to $0.73 per share for the same period a year
earlier based on 10,287,683 average common shares. The Company
issued 25,026 new shares of common stock under its Shareholder
Investment Plan and 520 new shares under its Long-Term Incentive
Plan during the three months ended December 31, 1995.
The increase in earnings for the three month period ended
December 31, 1995, was primarily due to an increase in firm sales
resulting from weather that was 20 percent colder than last year
and 2 percent colder than normal. The colder weather caused a 20
percent increase in firm gas heating sales and contributed to an
increase in operating margin of $6 million or 16 percent.
This increase was partially offset by higher income tax expense
as a result of increased income from operations and a higher
effective tax rate for this quarter compared to last year.
RESULTS OF OPERATIONS
COMPARISON OF THE FIRST QUARTER OF FISCAL 1996 WITH THE FIRST
QUARTER OF FISCAL 1995
REVENUES AND SALES
Operating revenues increased $15.9 million in the first quarter
of fiscal 1996 compared with the same period in the prior fiscal
year. The components of the change in operating revenues are as
follows:
Changes in
Operating Revenues
Increase/(Decrease)
(Millions of Dollars)
Firm and other
(excluding gas cost recoveries):
Sales, transportation and other $ 6.8
____
Subtotal - Firm and other 6.8
____
Interruptible (excluding gas cost recoveries):
Sales and transportation (0.3)
_____
Subtotal - Interruptible (0.3)
_____
Total - Excluding gas cost recoveries 6.5
Plus: Gas cost recoveries 9.4
_____
Total change in operating revenues $15.9
______
______
The corresponding changes in the Company's throughput were as
follows:
Quarter Ended December 31,
(Mcf - thousands)
1995 1994 Increase/(Decrease)
Firm sales
and transportation 10,623 8,860 1,763
Interruptible sales
and transportation 2,880 3,189 (309)
______ _____ ______
Total 13,503 12,049 1,454
______ ______ ______
______ ______ ______
Firm and other revenues (excluding gas cost recoveries) increased
for the first quarter of fiscal 1996 compared to the same period
in fiscal 1995 due to a 20 percent increase in firm sales
resulting from weather that was 20 percent colder this year
compared to last year.
Interruptible margin decreased $0.3 million for the three months
ended December 31, 1995 compared to the three months ended
December 31, 1994 primarily due to higher gas prices for
interruptible customers who can use alternative fuels.
Gas cost recoveries increased due to higher firm sales in the
first quarter of fiscal 1996 compared to the same period in
fiscal 1995 and higher per-unit gas costs.
COST OF GAS
Cost of gas increased $9.6 million for the three months ended
December 31, 1995 compared to the three months ended December 31,
1994 due to higher gas prices and higher firm sales along with
the recovery of undercollected gas costs in the first quarter of
fiscal 1996 compared to the same period a year earlier.
The components of cost of gas were as follows:
Quarter Ended December 31,
1995 1994
____ ____
(Millions of Dollars)
Actual gas purchases $46.2 $40.9
Effect of purchased gas adjustment
(PGA) clause 7.2 2.9
_____ _____
Total expense $53.4 $43.8
_____ _____
_____ _____
OTHER OPERATING EXPENSES
Total other operating expenses increased $0.6 million in the
first quarter of fiscal 1996 compared with the same period in the
prior year as a result of the following items:
Operations and maintenance expenses increased $0.7 million in the
first quarter of fiscal 1996 compared to the first quarter of
fiscal 1995 due primarily to higher uncollectible accounts
expense as a result of increased revenues due to colder weather.
These increases were offset by a reduction in payroll as a result
of the company-wide business transformation.
Federal and state income taxes, including the portion contained
in Other Income, increased $2.8 million due to higher income from
operations and a higher effective tax rate in the first quarter
of fiscal 1996 compared to the same period in fiscal 1995.
Other income increased $0.4 million in the first quarter of
fiscal 1996 compared to the first quarter of fiscal 1995 due to
higher earnings associated with Housatonic's investment in
Iroquois.
Interest charges increased $0.2 million for the three months
ended December 31, 1995 compared to the same period ended
December 31, 1994 due to an increase in short-term borrowings.
LIQUIDITY AND CAPITAL RESOURCES
Cash and temporary cash investments at December 31, 1995 totaled
$1.1 million. Principal sources of cash for the three months
ended December 31, 1995 were net income and the overcollection of
gas costs. These funds were used primarily to reduce short-term
debt, meet sinking fund requirements, dividend payments and
capital expenditures.
Expenditures for utility plant and other investments totaled $4.9
million for the first three months of fiscal 1996. During the
first three months of fiscal 1996, construction additions were
supported by short-term debt.
The seasonal nature of gas revenues, inventory purchases and
construction expenditures create a need for short-term borrowing
to supplement internally generated funds. As of December 31,
1995, Yankee Gas had a revolving line of credit with a group of
five banks of $60 million. Under the agreement, funds may be
borrowed on a short-term revolving basis using either fixed or
variable rate loans. Yankee Gas also had uncommitted credit
lines of $27 million as of December 31, 1995. At December 31,
1995, Yankee Gas had $32.8 million outstanding on its agreements.
In addition, Yankee Energy had $12.4 million outstanding at
December 31, 1995 on its $15 million committed line of credit.
The long-term credit needs of Yankee Gas are being met by a first
mortgage bond indenture which provides for the issuance of bonds
from time to time, subject to certain issuance tests.
On February 1, 1996, the Company's system real estate subsidiary,
NorConn Properties, Inc., secured a $6 million bank term loan to
refinance the Company's headquarters building for $4 million and
to permanently finance the Company's new East Windsor service
building for $2 million. Under the agreement, the interest rate
is fixed at 6.24 percent for the seven year term of the loan and
provides for an annual $0.3 million sinking fund payment. Other
provisions of the agreement are for a parent guarantee and an
assignment of rents. The refinancing of the headquarters
building (9.55 percent interest rate) required the payment of a
$0.2 million pre-payment penalty.
The Company has entered into fixed revenue-rate contracts with
two customers for the delivery of natural gas. The Company has
hedged these commitments with the purchase of natural gas swaps.
In order to satisfy certain provisions of the arrangement, the
Company has provided a letter of credit for $3.25 million. The
Company's results of operations are unaffected by the hedge
transaction given that it passes through the cost of the hedge to
either the commodity trading firm or its customer depending on
the difference in the fixed and floating prices for gas.
For the three months ended December 31, 1995, the Company issued
25,026 new shares of common stock under the Company's Shareholder
Investment Plan and 520 shares under its Long-Term Incentive
Plan.
PART II - OTHER INFORMATION
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit 27 - Financial Data Schedule
b. Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements 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.
YANKEE ENERGY SYSTEM, INC.
__________________________
(Registrant)
Date February 13, 1996 /s/ Michael E. Bielonko
___________________________
Michael E. Bielonko
Vice President and
Chief Financial Officer
Date February 13, 1996 /s/ Nicholas A. Rinaldi
___________________________
Nicholas A. Rinaldi
Controller