UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the quarterly period ended March 31, 2003
Northeast Utilities
-------------------
(Name of registered holding company)
107 Selden Street, Berlin, CT 06037
-----------------------------------
(Address of Principal Executive Officers)
Name and telephone number of officer to whom inquiries concerning this report
should be directed:
John P. Stack, Vice President-Accounting and Controller
Telephone Number: 860-665-2333
GENERAL INSTRUCTIONS
A. Use of Form
1. A reporting company, as defined herein, shall file a report on this
form within 60 days after the end of each of the first three
quarters, and within 90 days after the end of the fourth quarter, of
the fiscal year of the registered holding company. The period
beginning on the date of effectiveness of rule 58 and ending at the
end of the quarter following the quarter in which the rule becomes
effective shall constitute the initial period for which any report
shall be filed, if applicable.
2. The requirement to provide specific information by means of this form
supersedes any requirement by order of the Commission to provide
identical information by means of periodic certificates under rule
24; but does not so supersede and replace any requirement by order to
provide information by means of an annual report on Form U-13-60.
3. Information with respect to reporting companies that is required by
Form U-13-60 shall be provided exclusively on that form.
4. Notwithstanding the specific requirements of this form, this
Commission may informally request such further information as, in its
opinion, may be necessary or appropriate.
B. Statements of Monetary Amounts and Deficits
1. Amounts included in this form and in related financial statements may
be expressed in whole dollars, thousands of dollars or hundred
thousands of dollars.
2. Deficits and other similar entries shall be indicated by either
brackets or parentheses. An explanation should be provided by
footnote.
C. Formal Requirements
This form, including exhibits, shall be filed with Commission
electronically pursuant to Regulation S-T (17 CFR 232.10 et seq.). A
conformed copy of each such report shall be filed with each state
commission having jurisdiction over the retail rates of a public utility
company that is an associate company of a reporting company. Each report
shall provide the name and telephone number of the person to whom
inquiries concerning this report should be directed.
D. Definitions
As used in this form, the word "reporting company" means an energy-related
company or gas-related company, as defined in rule 58(b). All other words
and terms have the same meaning as in the Public Utility Holding Company
Act of 1935, as amended, and the rules and regulations thereunder.
ITEM 1 - ORGANIZATIONAL CHART
-------------------------------------------------------------------------------
Instructions
-------------------------------------------------------------------------------
1. Complete Item 1 only for the first three calendar quarters of the fiscal
year of the registered holding company.
2. Under the caption "Name of Reporting Company," list each energy-related
and gas-related company and each system company that directly or
indirectly holds securities thereof. Add the designation "(new)" for each
reporting company of which securities were acquired during the period, and
the designation "(*)" for each inactive company.
3. Under the caption "Percentage of Voting Securities Held," state the
aggregate percentage of the outstanding voting securities of the reporting
company held directly or indirectly by the registered holding company at
the end of the quarter.
4. Provide a narrative description of each reporting company's activities
during the reporting period.
Percentage Activities
Energy or of Voting Reported
Name of Gas Date of State of Securities Nature of During the
Reporting Company Related Organization Organization Held Business Period
----------------- ------- ------------ ------------- ---- -------- ------
NU Enterprises, Holding 01/04/99 Connecticut 100% by Unregulated (A)
Inc. Northeast businesses
Utilities holding
company
(B)
Select Energy, Inc. Energy 09/26/96 Connecticut 100% by NU Invest in
Enterprises, energy-related
Inc. activities
Select Energy Energy 03/17/99 Connecticut 100% by NU Invest in (C)
Portland Pipeline, Enterprises, energy-related
Inc. * Inc. activities
Northeast Energy 01/04/99 Connecticut 100% by NU Invest in (D)
Generation Services Enterprises, energy-related
Company Inc. activities
Select Energy Energy 06/19/90 Massachusetts 100% by NU Invest in (E)
Services, Inc. Enterprises, energy-related
Inc. activities
Reeds Ferry Supply Energy 07/15/64 New Hampshire 100% by Invest in (F)
Co., Inc. Select energy-related
Energy activities
Services,
Inc.
HEC/Tobyhanna Energy 09/28/99 Massachusetts 100% by Invest in (G)
Energy Project, Select energy-related
Inc. Energy activities
Services,
Inc.
Select Energy Energy 10/12/94 Massachusetts 100% by Invest in (H)
Contracting, Inc. Select energy-related
Energy activities
Services,
Inc.
Yankee Energy Holding 02/15/00 Connecticut 100% by Public Utility (I)
System, Inc. Northeast Holding
Utilities Company
Yankee Energy Energy 07/02/93 Connecticut 100% by Invest in (J)
Services Company* Yankee energy-related
Energy activities
System, Inc.
R. M. Services, Energy 11/22/94 Connecticut 10% by Invest in (K)
Inc. Yankee energy-related
Energy activities
System, Inc.
Acumentrics Energy 09/13/00 Massachusetts 5% by NU Invest in (L)
Corporation Enterprises, energy-related
Inc. activities
ERI/HEC EFA-Med, Energy 09/30/00 Delaware 50% by Invest in (M)
LLC Select energy-related
Energy activities
Services,
Inc.
E. S. Boulos Energy 01/10/01 Connecticut 100% by Invest in (N)
Company Northeast energy-related
Generation activities
Services
Company
NGS Mechanical, Energy 01/24/01 Connecticut 100% by Provide (O)
Inc. Northeast mechanical
Generation construction
Services and
Company maintenance
services
HEC/CJTS Energy Energy 03/02/01 Delaware 100% by Facilitate (P)
Center LLC Select construction
Energy financing
Services,
Inc.
Select Energy Energy 02/13/96 Delaware 100% by Invest in (Q)
New York, Inc. Select energy-related
Energy, Inc. activities
Woods Electrical Energy 07/18/02 Connecticut 100% by Provide (R)
Co., Inc. Northeast electrical
Generation contacting
Services services
Company
Greenport Power, Energy 02/13/03 Delaware 50% by Invest in (S)
LLC (new) Northeast energy related
Generation construction
Services activities
Company
(A) NU Enterprises, Inc. is not the "reporting company" but is included in
this Item 1 because it holds, directly or indirectly, voting securities
issued by reporting companies as indicated above.
(B) Select Energy, Inc. (Select Energy) is an integrated energy business that
buys, sells, markets and trades electricity, gas and oil and energy-
related products and services to both wholesale and retail customers in
the northeastern United States. Select Energy procures and delivers
energy and capacity required to serve its electric, gas and oil customers.
Under the umbrella of the Select Energy brand, Select Energy, collectively
with its affiliated competitive energy businesses, provides a wide range
of energy products and energy services.
Select Energy is a licensed retail electricity supplier and is registered
with local electric distribution companies in the states of Connecticut,
Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New
York, Pennsylvania, Rhode Island and Virginia. Select Energy is a
registered gas marketer with local gas distribution companies in the
states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Virginia.
(C) Select Energy Portland Pipeline, Inc. (SEPPI) acquired a 5% interest in
Portland Natural Gas Transmission System partnership in March 1999 and
sold this interest in June 2001.
(D) Northeast Generation Services Company (NGS) was established to provide
a full range of energy-related operation and maintenance services for
larger industrial, institutional and power generation customers throughout
the 11-state northeast area. NGS' current business segments focus on
providing turnkey Manage and Operate Services (MOS) a variety of Specialty
Services (SS) and full-scope mechanical, Construction and Maintenance
Services (CMS).
MOS is a service that is designed for generation asset owners. NGS has
the ability to offer station management and operation services with a
focus on optimizing the value of that specific asset with the owner.
Within the SS platform, its offerings include electrical maintenance and
laboratory analysis. Within the CMS platform, the product and service
offerings include mechanical construction and maintenance services and
engineering and environmental consulting services, with an emphasis on
power plant systems.
(E) Select Energy Services, Inc. (formerly HEC Inc.) is not the "reporting
company" but is included in this Item 1 because it holds, directly or
indirectly, voting securities issued by reporting companies as indicated
above.
(F) Reed's Ferry Supply Co., Inc. is as an equipment wholesaler which
purchases equipment on behalf of Select Energy Contracting, Inc.
(G) HEC/Tobyhanna Energy Project, Inc. was established as a special purpose
entity to manage the assets of an Energy Savings Performance Contract
(ESPC) project at the Tobyhanna Army Depot.
(H) Select Energy Contracting, Inc. designs, manages and directs the
construction of, and/or installing of mechanical, water, and electrical
systems, energy and other resource consuming equipment.
(I) Yankee Energy System, Inc. is not the "reporting company" but is included
in this Item 1 because it holds, directly or indirectly, voting securities
issued by reporting companies as indicated above.
(J) Yankee Energy Services Company (YESCO) has disposed of most of its assets
and is winding down its energy-related services for its customers.
(K) R. M. Services, Inc. provides consumer collection services for companies
throughout the United States.
(L) Acumentrics Corporation develops, manufactures, and distributes advanced
power generation, power quality and power protection devices including a
high-speed flywheel and advanced technology fuel cells.
(M) ERI/HEC EFA-Med, LLC (ERI/HEC) is a Delaware limited liability company
that was formed by Select Energy Services, Inc., and ERI Services, Inc.
to enter into an indefinite delivery/indefinite quantity contract with the
U.S. Navy. Under the contract, the Navy will issue Delivery Orders for
energy services work at U.S. Government facilities located in Bahrain,
Greece, Egypt, Italy, Spain, Turkey, and the United Kingdom. ERI/HEC will
designate either ERI or Select Energy Services, Inc. to perform each of
the Delivery Orders. ERI/HEC will also act as the conduit for any
project-related financing. ERI Services, Inc. and Select Energy Services,
Inc. each own 50% of the LLC.
(N) E. S. Boulos Company (Boulos) is in the electrical contracting business
primarily in Maine, New Hampshire and Massachusetts. Boulos is registered
to do business in Connecticut, Rhode Island, Maine, Massachusetts, New
Hampshire, and Vermont.
(O) NGS Mechanical, Inc. (NGSM) performs mechanical construction and
maintenance services. NGSM is registered to do business in Massachusetts,
New Hampshire, Maine, Vermont, Rhode Island, and New York.
(P) HEC/CJTS Energy Center LLC (HEC/CTJS) facilitated the construction of an
energy center at the Connecticut Juvenile Training School in Middletown,
Connecticut. HEC/CJTS does not have any employees nor does it conduct any
other activities other than those related to accepting the assignment of
the related lease.
(Q) Select Energy New York, Inc. (SENY) is engaged in the brokering,
marketing, transportation, storage, and sale of energy commodities in the
state of New York.
(R) Woods Electrical Co., Inc. (Woods) is in the electrical contracting
business in Connecticut. Woods is registered to do business in
Connecticut, Massachusetts, Maine and New Hampshire.
(S) Greenport Power LLC (Greenport) is a Delaware limited liability company
that was formed by NGS and Hawkeye Electric LLC (Hawkeye Electric) to
enter into an Engineering, Procurement and Construction Agreement with
Global Common LLC for the performance of design, engineering, procurement,
construction and other services in connection with an electrical facility
construction project in Greenport, Long Island, New York. Hawkeye Electric
and NGS each own 50% of the LLC.
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
-------------------------------------------------------------------------------
Instruction
-------------------------------------------------------------------------------
With respect to a transaction with an associate company, report only the type
and principal amount of securities involved.
-------------------------------------------------------------------------------
Person
Company Type of Principal to Whom Collateral Consideration Company Amount of
Issuing Security Amount of Issue or Cost of Security Given With Received for Contributing Capital
Security Issued Security Renewal Capital Was Issued Security Each Security Capital Contribution
--------------- -------- ------------ -------- ------- ------------ ---------- ------------- ------------ -------------
Select
Energy, Inc. No transactions this quarter.
Northeast
Generation
Services
Company No transactions this quarter.
Select Energy
Contracting,
Inc. No transactions this quarter.
Reeds Ferry
Supply Co.,
Inc. No transactions this quarter.
HEC/Tobyhanna
Energy
Project, Inc. No transactions this quarter.
Yankee Energy
Services
Company No transactions this quarter.
R. M.
Services, Inc. No transactions this quarter.
ERI/HEC
EFA-Med, LLC No transactions this quarter.
E.S. Boulos
Company No transactions this quarter.
NGS Mechanical,
Inc. No transactions this quarter.
HEC/CJTS
Energy
Center LLC No transactions this quarter.
Select Energy
New York, Inc. No transactions this quarter.
Woods Electrical
Co., Inc. No transactions this quarter.
Northeast
Utilities No transactions this quarter.
ITEM 3 - ASSOCIATE TRANSACTIONS
-------------------------------------------------------------------------------
Instructions
-------------------------------------------------------------------------------
1. This item is used to report the performance during the quarter of contracts
among reporting companies and their associate companies, including other
reporting companies, for service, sales and construction. A copy of any
such contract not filed previously should be provided as an exhibit pursuant
to Item 6.B.
2. Parts I and II concern transactions performed by reporting companies on
behalf of associate companies, and transactions performed by associate
companies on behalf of reporting companies, respectively.
-------------------------------------------------------------------------------
Part I - Transactions performed by reporting companies on behalf
of associate companies.
Total Amount
Billed*
Reporting Associate
Company Company Types of Three Months
Rendering Receiving Services Ended
Services Services Rendered March 31, 2003
----------------------- ------------------------ -------------- -------------------
(Thousands
of Dollars)
Northeast Northeast
Generation Generation Electrical and
Services Company Company Mechanical services $ 4,573
=======
Northeast
Generation Electrical and
Services Company E. S. Boulos Company Mechanical services $ 2
=======
Northeast
Generation Northeast Utilities Electrical and
Services Company Service Company Mechanical services $ 115
=======
Northeast The Connecticut
Generation Light and Power Electrical and
Services Company Company Mechanical services $ 148
=======
Northeast
Generation Holyoke Water Electrical and
Services Company Power Company Mechanical services $ 2,589
=======
Northeast Western
Generation Massachusetts Electrical and
Services Company Electric Company Mechanical services $ 5
=======
Northeast
Generation Select Energy Electrical and
Services Company Services, Inc. Mechanical services $ 274
=======
Northeast Public Service
Generation Company of Electrical and
Services Company New Hampshire Mechanical services $ 773
=======
Northeast
Generation Yankee Energy Electrical and
Services Company Services Company Mechanical services $ 1
=======
Reeds Ferry Select Energy Wholesale Purchasing
Supply Co., Inc. Contracting, Inc. Services $ 237
=======
Select Energy Wholesale Purchasing
Select Energy, Inc. New York, Inc. Services $ 5,574
=======
Northeast Generation Wholesale Purchasing
Select Energy, Inc. Services Company Services $ 6
=======
Northeast Utilities Wholesale Purchasing
Select Energy, Inc. Service Company Services $ 2
=======
The Connecticut
Light and Power Wholesale Purchasing
Select Energy, Inc. Company Services $ 601
=======
Holyoke Water Wholesale Purchasing $ 12
Select Energy, Inc. Power Company Services =======
Western
Massachusetts Wholesale Purchasing $ 93
Select Energy, Inc. Electric Company Services =======
Public Service
Company of Wholesale Purchasing $ 311
Select Energy, Inc. New Hampshire Services =======
E. S. Boulos Northeast Generation Wholesale Purchasing $ 11
Company Services Company Services =======
Select Energy Select Energy, Wholesale Purchasing $ 121
New York, Inc. Inc. Services =======
Yankee Energy Yankee Gas $ 3
Services Company Services Company Miscellaneous =======
* Total Amount Billed is for direct costs only.
Part II - Transactions performed by associate companies on behalf
of reporting companies.
Total Amount
Billed*
Associate Reporting
Company Company Types of Three Months
Rendering Receiving Services Ended
Services Services Rendered March 31, 2003
----------------------- ------------------------ -------------- -------------------
(Thousands
of Dollars)
Northeast Generation Northeast Generation
Company Services Company Miscellaneous $ 322
=======
Public Service
Company of Select Energy,
New Hampshire Inc. Miscellaneous $ 78
=======
The Connecticut
Light and Power Northeast Generation
Company Services Company Miscellaneous $ 13
=======
The Connecticut
Light and Power Select Energy,
Company Inc. Miscellaneous $ 1
=======
Holyoke Water Northeast Generation
Power Company Services Company Miscellaneous $ 147
=======
Western
Massachusetts Northeast Generation
Electric Company Services Company Miscellaneous $ 3
=======
Yankee Gas Yankee Energy
Services Company Services Company Miscellaneous $ 3
=======
Northeast Utilities Select Energy
Service Company New York, Inc. Miscellaneous $ 76
=======
Northeast Utilities Northeast Generation
Service Company Services Company Miscellaneous $ 1,126
=======
Northeast Utilities Select Energy,
Service Company Inc. Miscellaneous $ 4,218
=======
Northeast Utilities Yankee Energy
Service Company Services Company Miscellaneous $ 4
=======
* Total Amount Billed is for direct costs only.
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
----------------------------------------
(Thousands of Dollars)
Total consolidated capitalization as of 03/31/03 $6,677,356 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 1,001,603 line 2
Greater of $50 million or line 2 $1,001,603 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business):
Select Energy, Inc. 669,724
Northeast Generation Services Company 37,201
Select Energy Contracting, Inc. 27,081
Select Energy New York, Inc. 30,680
Woods Electrical Co., Inc. 9,631
Reeds Ferry Supply Co., Inc. 7
HEC/Tobyhanna Energy Project, Inc. -
Yankee Energy Services Company 7,882
E.S. Boulos Company 9,886
R.M. Services, Inc. 13,799
NGS Mechanical, Inc. 10
Acumentrics Corporation 7,500
Greenport, LLC 92
ERI/HEC EFA-Med, LLC 9
HEC/CJTS Energy Center LLC 12
------------
Current aggregate investment 813,514
------------
Elimination * 22,520
------------
Total current aggregate investment 790,994 line 4
------------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $210,609 line 5
============
*Elimination is for capital contributions made from a parent company who is a
reporting company to a subsidiary who is also a reporting company.
ITEM 5 - OTHER INVESTMENTS
-------------------------------------------------------------------------------
Instruction
-------------------------------------------------------------------------------
This item concerns investments in energy-related and gas-related
companies that are excluded from the calculation of aggregate
investment under rule 58.
-------------------------------------------------------------------------------
Major Line Other Other
of Energy- Investment Investment
Related in Last in This Reason for Difference
Business U-9C-3 Report U-9C-3 Report in Other Investment
------------- ------------- ------------- ------------------------
NONE
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
-------------------------------------------------------------------------------
Instructions
-------------------------------------------------------------------------------
A. Financial Statements
1. Financial statements are required for reporting companies in which
the registered holding company system has at least 50% equity or
other ownership interest. For all other rule 58 companies, the
registered holding company shall make available to the Commission
such financial statements as are available to it.
2. For each reporting company, provide a balance sheet as of the end of
the quarter and income statements for the three-month and year-to-
date periods ending as of the end of the quarter, together with any
notes thereto. Financial statements shall be for the first three
quarters of the fiscal year of the registered holding company.
3. If a reporting company and each of its subsidiaries engage
exclusively in single category of energy-related or gas-related
activity, consolidated financial statements may be filed.
4. Separate financial statements need not be filed for inactive
companies or for companies engaged solely in the ownership of
interests in energy-related or gas-related companies.
B. Exhibits
1. Copies of contracts required to be provided by Item 3 shall
be filed as exhibits.
2. A certificate stating that a copy of the report for the
previous quarter has been filed with interested state
commissions shall be filed as an exhibit. The certificate
shall provide the names and addresses of the state commissions.
A. Financial Statements
Select Energy, Inc.:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Northeast Generation Services Company:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Select Energy Contracting, Inc.:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Reeds Ferry Supply Co., Inc.:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
HEC/Tobyhanna Energy Project, Inc.:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Yankee Energy Services Company:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
ERI/HEC EFA-Med, LLC:
Not available as of March 31, 2003
E. S. Boulos Company:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
NGS Mechanical, Inc.:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Northeast Utilities (Parent):
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Select Energy New York, Inc.:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
HEC/CJTS Energy Center LLC:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Woods Electrical Co., Inc.:
Balance Sheet - As of March 31, 2003
Income Statement - Three months ended March 31, 2003
Greenport Power, LLC:
Not available as of March 31, 2003
B. Exhibits
Exhibit No. Description
----------- -----------
6.B.1.1a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1c Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1d Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1e Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1f Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1g Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1h Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1i Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1j Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1k Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.2a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.2b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.4a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.4b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.6 Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.7 Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.2.1 The company certifies that a conformed copy of Form U-9C-3 for
the previous quarter was filed with the following state
commissions:
Ms. Louise E. Rickard
Acting Executive Secretary
Department of Public Utility Control
10 Franklin Square
New Britain, CT 06051
Ms. Mary L. Cottrell, Secretary
Massachusetts Department of Telecommunications and Energy
100 Cambridge Street
Boston, MA 02202
Mr. Thomas B. Getz
Executive Director and Secretary
State of New Hampshire
Public Utilities Commission
8 Old Suncook Road, Building One
Concord, NH 03301-7319
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 324,570
Accounts receivable from affiliated companies 135,560
Taxes receivable 8,060
Special deposits 36,683
Derivative assets 157,519
Prepaid option premiums 15,323
Prepayments and other 33,252
-----------
710,967
-----------
Property, Plant and Equipment:
Competitive energy 12,686
Less: Accumulated depreciation 8,396
-----------
4,290
Construction work in progress 4,638
-----------
8,928
-----------
Deferred Debits and Other Assets:
Intangibles, net 17,131
Prepaid pension 2,032
Long-term accounts receivable 7,851
Long-term contracts assets 47,418
Other 36,231
-----------
110,663
-----------
Total Assets $ 830,558
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 224,300
Accounts payable 352,897
Accounts payable to affiliated companies 19,156
Derivative liabilities 118,903
Unearned option premiums 24,114
Other 41,797
----------
781,167
----------
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 10,441
Other 9,934
----------
20,375
----------
Capitalization:
Common Stockholder's Equity:
Common stock, $1 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 249,300
Accumulated deficit (230,290)
Accumulated other comprehensive income 10,006
----------
Common Stockholder's Equity 29,016
----------
Total Capitalization 29,016
----------
Total Liabilities and Capitalization $ 830,558
==========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ 550,838
-----------
Operating Expenses:
Operation -
Purchased power, net interchange
power and capacity 546,458
Other 14,147
Depreciation and amortization 2,853
Taxes other than income taxes 623
-----------
Total operating expenses 564,081
-----------
Operating Loss (13,243)
Interest Expense, Net 1,299
Other Income, Net 4,035
-----------
Loss Before Income Tax Benefit (10,507)
Income Tax Benefit 5,998
-----------
Net Loss $ (4,509)
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 211
Receivables, net 7,230
Accounts receivable from affiliated companies 5,868
Taxes receivable 382
Unbilled revenues 1,255
Fuel, materials and supplies, at average cost 2
Prepayments and other 1,692
-----------
16,640
-----------
Property, Plant and Equipment:
Competitive energy 2,948
Less: Accumulated depreciation 884
-----------
2,064
Construction work in progress 653
-----------
2,717
-----------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 362
Prepaid pension 751
Intangible assets, net and other 22,800
-----------
23,913
-----------
Total Assets $ 43,270
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2003
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 11,000
Accounts payable 2,120
Accounts payable to affiliated companies 8,153
Other 1,359
------------
22,632
------------
Deferred Credits and Other Liabilities 840
------------
Capitalization:
Long-Term Debt 5,000
------------
Common Stockholder's Equity:
Common stock, $1 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 15,517
Accumulated deficit (677)
Accumulated comprehensive loss (42)
------------
Common Stockholder's Equity 14,798
------------
Total Capitalization 19,798
------------
Total Liabilities and Capitalization $ 43,270
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
-------------
(Thousands
of Dollars)
Operating Revenues $ 12,280
-------------
Operating Expenses:
Operation -
Other 10,403
Maintenance 2,220
Depreciation and amortization 68
Taxes other than income taxes 520
-------------
Total operating expenses 13,211
-------------
Operating Loss (931)
Interest Expense, Net 154
Other Loss, Net (59)
-------------
Loss Before Income Tax Benefit (1,144)
Income Tax Benefit 458
-------------
Net Loss $ (686)
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 14,505
Other materials and supplies, at average cost 279
Prepayments and other 361
------------
15,145
------------
Property, Plant and Equipment:
Competitive energy 6,776
Less: Accumulated depreciation 4,301
------------
2,475
------------
Deferred Debits and Other Assets:
Goodwill, net 17,220
------------
Total Assets $ 34,840
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 4,966
Accounts payable to affiliated companies 7,524
Accrued taxes 701
Other 1,278
---------
14,469
---------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 937
Other 2,413
---------
3,350
---------
Capitalization:
Common Stockholder's Equity:
Common stock, $1 par value - 100,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 15,108
Retained earnings 1,913
---------
Common Stockholder's Equity 17,021
---------
Total Capitalization 17,021
---------
Total Liabilities and Capitalization $ 34,840
=========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ 15,329
------------
Operating Expenses:
Operation 13,921
Maintenance 149
Depreciation 306
Taxes other than income taxes 546
------------
Total operating expenses 14,922
------------
Operating Income 407
Interest Expense, Net 53
Other Income, Net 2
------------
Income Before Income Tax Expense 356
Income Tax Expense 99
------------
Net Income $ 257
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
REEDS FERRY SUPPLY CO., INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 5
Receivables, net 172
------------
177
------------
Deferred Debits and Other Assets:
Goodwill, net 248
------------
Total Assets $ 425
============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 172
Accounts payable to affiliated companies 295
------------
467
Capitalization: ------------
Common Stockholder's Equity:
Common stock, no par value - 200 shares
authorized and 100 shares outstanding 4
Capital surplus, paid in 3
Accumulated deficit (49)
------------
Common Stockholder's Equity (42)
------------
Total Capitalization (42)
------------
Total Liabilities and Capitalization $ 425
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
REEDS FERRY SUPPLY CO., INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ 237
Operating Expenses 237
------------
Net Income $ -
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/TOBYHANNA ENERGY PROJECT, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 1,123
-----------
Property, Plant and Equipment:
Other, net 714
-----------
Deferred Debits and Other Assets:
Contracts receivable 27,906
Other 2,480
-----------
30,386
-----------
Total Assets $ 32,223
===========
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Long-term debt - current portion $ 802
Accounts payable to affiliated companies 6,103
Accrued taxes 163
Accrued interest 240
Other 473
------------
7,781
------------
Capitalization:
Long-Term Debt 23,666
------------
Common Stockholder's Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Retained earnings 776
------------
Total Common Stockholder's Equity 776
------------
Total Capitalization 24,442
------------
Total Liabilities and Capitalization $ 32,223
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/TOBYHANNA ENERGY PROJECT, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Interest Expense, Net $ 481
Other Income, Net 584
------------
Income Before Income Tax Expense 103
Income Tax Expense 34
------------
Net Income $ 69
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2003
-----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 26
Receivables, net 5
-----------
31
-----------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 436
Investments and other 5,144
-----------
5,580
-----------
Total Assets $ 5,611
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2003
-----------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 172
Accounts payable to affiliated companies 455
Accrued taxes 18
Other 3
-----------
648
-----------
Deferred Credits and Other Liabilities 5
-----------
Capitalization:
Common Stockholder's Equity:
Common stock, no par value - 10,000 shares
authorized and 200 shares outstanding 1
Capital surplus, paid in 7,881
Accumulated deficit (2,924)
-----------
Common Stockholder's Equity 4,958
-----------
Total Capitalization 4,958
-----------
Total Liabilities and Capitalization $ 5,611
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ 7
Operating Expenses 5
------------
Operating Income 2
Interest Expense, Net 3
Other Income, Net 2
------------
Income Before Income Tax Expense 1
Income Tax Expense 2
------------
Net Loss $ (1)
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1,789
Receivables, net 9,367
Accounts receivable from affiliated companies 263
Unbilled revenues 2,946
Materials and supplies 223
----------
14,588
----------
Property, Plant and Equipment:
Competitive energy 756
Less: Accumulated depreciation 240
----------
516
----------
Deferred Debits and Other Assets:
Goodwill 6,963
Other 28
----------
6,991
----------
Total Assets $ 22,095
==========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Advance from parent, non-interest bearing $ 2,948
Accounts payable 3,018
Accrued taxes 1,046
Other 201
----------
7,213
----------
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 120
Other 800
----------
920
----------
Capitalization:
Common Stockholder's Equity:
Common stock, no par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 7,539
Retained earnings 6,423
----------
Common Stockholder's Equity 13,962
----------
Total Capitalization 13,962
----------
Total Liabilities and Capitalization $ 22,095
==========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ 9,284
------------
Operating Expenses:
Operating 305
Maintenance 8,713
Depreciation 37
------------
Total operating expenses 9,055
------------
Operating Income 229
Other Income, Net 219
------------
Income Before Income Tax Expense 448
Income Tax Expense 146
------------
Net Income $ 302
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NGS MECHANICAL, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 10
----------
Total Assets $ 10
==========
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 2
----------
Capitalization:
Common Stockholder's Equity:
Common stock, no par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 10
Accumulated deficit (2)
----------
Common Stockholder's Equity 8
----------
Total Capitalization 8
----------
Total Liabilities and Capitalization $ 10
==========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NGS MECHANICAL, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ -
Operating Expenses -
-------------
Net Income $ -
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
March 31,
2003
-----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1,243
Notes receivable from affiliated companies 269,900
Notes and accounts receivable 474
Receivables from affiliated companies 2,022
Taxes receivable 6,349
Prepayments 5,154
----------
285,142
----------
Deferred Debits and Other Assets:
Investments in subsidiary companies, at equity 2,369,805
Other 16,185
----------
2,385,990
----------
Total Assets $2,671,132
==========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
March 31,
2003
-----------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to banks $ 60,000
Long-term debt - current portion 23,000
Accounts payable 516
Accounts payable to affiliated companies 5,470
Accrued interest 11,978
Other 365
-----------
101,329
-----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 5,918
Other 217
-----------
6,135
-----------
Capitalization:
Long-Term Debt 334,104
-----------
Common Stockholder's Equity:
Common shares, $5 par value - authorized
225,000,000 shares; 149,884,644 shares issued and
126,591,916 shares outstanding 749,423
Capital surplus, paid in 1,105,386
Deferred contribution plan - employee stock
ownership plan (83,976)
Retained earnings 808,352
Accumulated other comprehensive income 11,077
Treasury stock (360,698)
-----------
Common Stockholder's Equity 2,229,564
-----------
Total Capitalization 2,563,668
-----------
Total Liabilities and Capitalization $ 2,671,132
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
STATEMENT OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ -
------------
Operating Expenses:
Other 2,015
------------
Operating Loss (2,015)
------------
Interest Expense 6,788
------------
Other Income, Net:
Equity in earnings of subsidiaries 62,741
Other 2,804
------------
Other income, net 65,545
------------
Income Before Income Tax Benefit 56,742
Income Tax Benefit 3,462
------------
Net Income $ 60,204
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY NEW YORK, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 27,801
Receivables, net 50,750
Accounts receivable from affiliated companies 55
Special deposits 1,458
Derivative assets 35,381
Prepaid option premiums 4,869
Prepayments and other 4,799
-----------
125,113
-----------
Property, Plant and Equipment:
Competitive energy 509
Less: Accumulated depreciation 281
-----------
228
-----------
Deferred Debits and Other Assets 4,128
-----------
Total Assets $ 129,469
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY NEW YORK, INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
-----------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Accounts payable $ 32,250
Accounts payable to affiliated companies 7,435
Accrued taxes 5,087
Derivative liabilities 9,105
Other 6,106
----------
59,983
----------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 8,850
Deferred pension costs 499
Other 19
----------
9,368
----------
Capitalization:
Long-Term Debt 20,699
----------
Common Stockholder's Equity:
Common stock, $1 par value - authorized
and outstanding 10,000 shares 10
Capital surplus, paid in 9,971
Retained earnings 24,158
Accumulated comprehensive income 5,280
----------
Common Stockholder's Equity 39,419
----------
Total Capitalization 60,118
----------
Total Liabilities and Capitalization $ 129,469
==========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY NEW YORK, INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ 71,086
-----------
Operating Expenses:
Purchased power, net interchange
power and capacity 62,233
Other 2,059
Taxes other than income taxes (439)
-----------
Total operating expenses 63,853
-----------
Operating Income 7,233
Interest Expense, Net 139
Other Income, Net 80
-----------
Income Before Income Tax Expense 7,174
Income Tax Expense 2,919
-----------
Net Income $ 4,255
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/CJTS ENERGY CENTER LLC
BALANCE SHEET
(Unaudited)
March 31,
2003
-----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1
-----------
Total Assets $ 1
===========
LIABILITIES AND CAPITALIZATION
------------------------------
Capitalization:
Common Stockholder's Equity:
Capital surplus, paid in $ 12
Accumulated deficit (11)
-----------
Common Stockholder's Equity 1
-----------
Total Capitalization 1
-----------
Total Liabilities and Capitalization $ 1
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/CJTS ENERGY CENTER LLC
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ -
------------
Operating Expenses -
------------
Net Income $ -
============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
WOODS ELECTRICAL CO., INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
----------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 489
Receivables, net 1,549
Unbilled revenue 37
Materials and supplies 82
Prepayments and other 42
---------
2,199
---------
Property Plant and Equipment:
Competitive energy 300
Less: Accumulated depreciation 24
---------
276
---------
Deferred Debits and Other Assets:
Goodwill and other purchased intangible assets, net 7,669
---------
Total Assets $ 10,144
=========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
WOODS ELECTRICAL CO., INC.
BALANCE SHEET
(Unaudited)
March 31,
2003
-----------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Advance from parent, non-interest bearing $ 250
Accounts payable 280
Accounts payable to affiliated companies 518
Accrued taxes 6
Other 12
----------
1,066
----------
Deferred Credits and Other Liabilities 90
----------
Capitalization:
Long-Term Debt 4,450
----------
Common Stockholder's Equity:
Common stock, no par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 5,000
Accumulated deficit (462)
----------
Common Stockholder's Equity 4,538
----------
Total Capitalization 8,988
----------
Total Liabilities and Capitalization $ 10,144
==========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
WOODS ELECTRICAL CO., INC.
INCOME STATEMENT
(Unaudited)
Three Months
Ended
March 31,
2003
------------
(Thousands
of Dollars)
Operating Revenues $ 1,502
-----------
Operating Expenses:
Other 418
Maintenance 1,362
Depreciation 10
Taxes other than income taxes (11)
-----------
Total operating expenses 1,779
-----------
Operating Loss (277)
Interest Expense, Net 80
Other Income, Net 3
-----------
Net Loss $ (354)
===========
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
Northeast Utilities Parent
Select Energy, Inc.
Select Energy New York, Inc.
Northeast Generation Services Company
E.S. Boulos Company
NGS Mechanical, Inc.
Woods Electrical Co., Inc.
Select Energy Contracting, Inc.
Reeds Ferry Supply Co., Inc.
HEC/Tobyhanna Energy Project, Inc.
HEC/CJTS Energy Center LLC
Yankee Energy Services Company
Notes to Financial Statements (Unaudited)
1. About Northeast Utilities (NU)
Northeast Utilities Parent is the parent company of NU's subsidiaries. NU's
regulated utilities furnish franchised retail electric service in Connecticut,
New Hampshire and western Massachusetts through three wholly owned
subsidiaries: The Connecticut Light and Power Company, Public Service Company
of New Hampshire and Western Massachusetts Electric Company. Another wholly
owned subsidiary, North Atlantic Energy Corporation, previously sold all of its
entitlement to the capacity and output of the Seabrook Station nuclear unit
(Seabrook) to PSNH under the terms of two life-of-unit, full cost recovery
contracts. Seabrook was sold on November 1, 2002. Other subsidiaries include
Holyoke Water Power Company, a company engaged in the production of electric
power, and Yankee Energy System, Inc. (Yankee), the parent company of Yankee
Gas Services Company, Connecticut's largest natural gas distribution system.
Several wholly owned subsidiaries of NU provide support services for NU's
companies and, in some cases, for other New England utilities. Northeast
Utilities Service Company provides centralized accounting, administrative,
engineering, financial, information resources, legal, operational, planning,
purchasing, and other services to NU's companies. Until the sale of Seabrook
on November 1, 2002, North Atlantic Energy Service Corporation had operational
responsibility for Seabrook. Three other subsidiaries construct, acquire or
lease some of the property and facilities used by NU's companies.
NU Enterprises, Inc. is a wholly owned subsidiary of NU and acts as the holding
company for certain of NU's subsidiaries. Select Energy, Inc. (Select Energy),
and its subsidiary Select Energy New York, Inc. (SENY), Northeast Generation
Services Company and its subsidiaries (NGS), Select Energy Services, Inc., and
its subsidiaries (SESI), Mode 1 Communications, Inc. and Woods Network
Services, Inc., engage in a variety of energy-related and telecommunications
activities, as applicable, primarily in the competitive energy retail and
wholesale commodity, marketing and services fields. Northeast Generation
Company acquires and manages generation facilities. E.S. Boulos Company
(Boulos), NGS Mechanical, Inc. (NGS Mechanical) and Woods Electrical Co., Inc.
(Woods Electrical) are wholly owned subsidiaries of NGS. Select Energy
Contracting, Inc. (Select Energy Contracting), Reeds Ferry Supply Co., Inc.
(Reeds Ferry), HEC/Tobyhanna Energy Project, Inc., (HEC/Tobyhanna), and
HEC/CJTS Energy Center LLC (HEC/CJTS) are wholly owned subsidiaries of SESI.
Yankee has certain wholly owned subsidiaries, including Yankee Energy Services
Company (YESCO).
Select Energy, SENY, NGS, Boulos, NGS Mechanical, Woods Electrical, Select
Energy Contracting, Reeds Ferry, HEC/Tobyhanna, HEC/CJTS, and YESCO are
"energy-related companies" under rule 58. These footnotes are applicable to
the rule 58 companies with financial statements filed in this Form U-9C-3 under
Item 6 Section A.
2. About Select Energy
Select Energy is an integrated energy business that buys, markets, sells,
and trades electricity, gas, oil and energy-related products and services to
both wholesale and retail customers in the Northeastern United States. Select
Energy procures and delivers energy and capacity required to serve its
electric, gas and oil customers. Select Energy, collectively with its
affiliated competitive energy businesses, provides a wide range of energy
products and energy services. Select Energy is a licensed retail electricity
supplier and is registered with local electric distribution companies and is a
registered gas marketer with local gas distribution companies in the states of
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New
Jersey, New York, Pennsylvania, Rhode Island, and Virginia.
3. About SENY
SENY is a wholly owned subsidiary of Select Energy and engages in the
brokering, marketing, transportation, storage, and sale of energy commodities
in the state of New York.
4. About NGS
NGS provides management, operation and maintenance services to the electric
generation market, as well as to large industrial customers, in the
Northeastern United States. NGS also provides consulting services which
include engineering services, construction management, permitting, and
compliance management.
5. About Boulos
Boulos is an electrical contracting company which specializes in high voltage
electrical construction and maintenance in Connecticut, Maine, Massachusetts,
New Hampshire, Rhode Island, and Vermont. Boulos is wholly owned by NGS.
6. About NGS Mechanical
NGS Mechanical provides mechanical services in certain New England states
and New York. NGS Mechanical is wholly owned by NGS.
7. About Woods Electrical
Woods Electrical is a wholly owned subsidiary of NGS and is in the electrical
contracting business in the state of Connecticut. Woods Electrical is also
registered to do business in Maine, Massachusetts and New Hampshire. NGS
acquired Woods Electrical on July 1, 2002, and the results of Woods
Electrical's operations since July 1, 2002, are included in this report.
8. About Select Energy Contracting
Select Energy Contracting designs, manages, and directs the construction of,
and/or installation of mechanical, water and electrical systems, energy and
other resource consuming equipment.
9. About Reeds Ferry
Reeds Ferry is an equipment wholesaler which purchases equipment on behalf of
Select Energy Contracting.
10. About HEC/Tobyhanna
HEC/Tobyhanna is a special purpose entity established to manage the assets of
an Energy Savings Performance Contract at the Tobyhanna Army Depot.
11. About HEC/CJTS
HEC/CJTS is a special purpose entity formed to facilitate the financing of
SESI's construction of an energy center at the Connecticut Juvenile Training
School in Middletown, Connecticut. HEC/CJTS is wholly owned by SESI.
12. About YESCO
YESCO has disposed of most of its assets and is winding down its energy related
services for its customers.
13. Public Utility Regulation
NU is registered with the Securities and Exchange Commission (SEC) as a holding
company under the Public Utility Holding Company Act of 1935 (1935 Act), and is
subject to the provisions of the 1935 Act. Arrangements among NU's companies,
outside agencies and other utilities covering interconnections, interchange of
electric power and sales of utility property are subject to regulation by the
Federal Energy Regulatory Commission (FERC) and/or the SEC. The operating
subsidiaries are subject to further regulation for rates, accounting and other
matters by the FERC and/or applicable state regulatory commissions.
14. Presentation
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
15. New Accounting Standards
Energy Trading and Risk Management Activities: In October 2002, the Emerging
Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB)
reached consensuses on EITF Issue No. 02-3, "Accounting for Contracts Involved
in Energy Trading and Risk Management Activities."
One consensus rescinded EITF Issue No. 98-10, "Accounting for Contracts
Involved in Energy Trading and Risk Management Activities for Energy Trading
Activities," under which Select Energy previously accounted for energy trading
activities. This consensus required companies engaged in energy trading
activities to discontinue fair value accounting effective January 1, 2003,
for contracts that do not meet the definition of a derivative in SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," as amended.
Select Energy and SENY adopted this consensus effective October 1, 2002.
The second consensus required that companies engaged in energy trading
activities classify revenues and expenses associated with energy trading
contracts on a net basis in revenues effective January 1, 2003. Select Energy
and SENY adopted net reporting effective July 1, 2002, before this consensus
was reached by the EITF.
The EITF continues to consider guidance on accounting for energy trading
activities. The EITF has proposed Issue No. 02-L, "Reporting Gains and Losses
on Derivative Instruments That Are Subject to FASB Statement No. 133, and Not
Held for Trading Purposes." EITF Issue No. 02-L is expected to address whether
or not gains or losses on non-trading derivatives should be presented gross as
revenues and expenses or on a net basis in revenues.
Management will determine the impact, if any, that EITF Issue No. 02-L will
have on the classification of revenues and expenses if and when the EITF
reaches a consensus.
Derivative Accounting: Effective January 1, 2001, Select Energy and SENY
adopted SFAS No. 133, as amended. In April 2003, the FASB issued SFAS No. 149,
"Amendment of Statement 133 on Derivative Instruments and Hedging Activities,"
which amends SFAS No. 133. This new statement incorporates interpretations
that were included in FASB Derivative Implementation Group guidance, clarifies
certain conditions, and amends other existing pronouncements. Management is
evaluating the impact of SFAS No. 149 on the financial statements, but does
not believe that there will be a significant impact as a result of the
issuance of this new statement.
16. Derivative Instruments, Market Risk and Risk Management
A. Derivative Instruments
Effective January 1, 2001, Select Energy and SENY adopted SFAS No. 133, as
amended. Derivatives that are utilized for trading purposes are recorded at
fair value with changes in fair value included in earnings. Other contracts
that are derivatives but do not meet the definition of a cash flow hedge and
cannot be designated as being used for normal purchases or normal sales are
also recorded at fair value with changes in fair value included in earnings.
For those contracts that meet the definition of a derivative and meet the
cash flow hedge requirements, the changes in the fair value of the effective
portion of those contracts are generally recognized in accumulated other
comprehensive income until the underlying transactions occur. For those
contracts that meet the definition of a derivative and meet the fair value
hedge requirements, the changes in fair value of the effective portion of
those contracts are generally recognized on the balance sheet as both the
hedge and the hedged item are recorded at fair value. For contracts that
meet the definition of a derivative but do not meet the hedging requirements,
and for the ineffective portion of contracts that meet the cash flow hedge
requirements, the changes in fair value of those contracts are recognized
currently in earnings. Derivative contracts that are entered into as a normal
purchase or sale and will result in physical delivery, and are documented as
such, are recorded under accrual accounting. For information regarding recent
accounting changes related to trading activities, see Note 15, "New Accounting
Standards."
The tables below summarize Select Energy and SENY derivative assets and
liabilities at March 31, 2003. These amounts do not include premiums
paid, which amounted to $20.2 million at March 31, 2003 ($15.3 million for
Select Energy and $4.9 million for SENY). These amounts also do not
include unearned option premiums, which amounted to $24.1 million at March 31,
2003 ($24.1 million for Select Energy and zero for SENY). The premium
amounts relate primarily to energy trading activities.
-------------------------------------------------------------------------------
(Millions of Dollars) Assets Liabilities Total
-------------------------------------------------------------------------------
Select Energy:
Trading $141.0 $(110.3) $30.7
Nontrading 0.7 (0.8) (0.1)
Hedging 15.8 (7.8) 8.0
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Total $157.5 $(118.9) $38.6
===============================================================================
-------------------------------------------------------------------------------
(Millions of Dollars) Assets Liabilities Total
------------------------------------------------------------------------------
SENY:
Trading $ 24.2 $ (9.1) $15.1
Nontrading 2.3 -- 2.3
Hedging 8.9 -- 8.9
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Total $ 35.4 $ (9.1) $26.3
===============================================================================
Trading: To gather market intelligence and utilize this information in risk
management activities for the wholesale marketing business, Select Energy
conducts energy trading activities in electricity, natural gas and oil, and
therefore, experiences net open positions. Select Energy manages these open
positions with strict policies that limit its exposure to market risk and
require daily reporting to management of potential financial exposure.
Derivatives used in trading activities are recorded at fair value and included
in the consolidated balance sheets as derivative assets or liabilities.
Changes in fair value are recognized in operating revenues in the consolidated
statements of income in the period of change. The net fair value positions of
the trading portfolio at March 31, 2003 were assets of $30.7 million for Select
Energy and $15.1 million for SENY. These amounts include intercompany assets
and liabilities of $2.4 million.
Select Energy's trading portfolio includes New York Mercantile Exchange (NYMEX)
futures and options, the fair value of which is based on closing exchange
prices; over-the-counter forwards and options, the fair value of which is based
on the mid-point of bid and ask quotes; and bilateral contracts for the
purchase or sale of electricity or natural gas, the fair value of which is
modeled using available information from external sources based on recent
transactions and validated with a gas forward curve and an estimated heat rate
conversion. Select Energy's trading portfolio also includes transmission
congestion contracts. The fair value of certain transmission congestion
contracts is based on market inputs. Market information for other transmission
congestion contracts is not available, and those contracts cannot be reliably
valued. Management believes the amounts paid for these contracts are equal to
their fair value.
Nontrading: Nontrading derivative contracts are used for delivery of energy
related to Select Energy's retail and wholesale marketing activities. These
contracts are not entered into for trading purposes, but are subject to fair
value accounting because these contracts are derivatives that cannot be
designated as normal purchases or sales, as defined by SFAS No. 133. These
contracts cannot be designated as normal purchases or sales either because they
are included in the New York energy market that settles financially or because
the normal purchase and sale designation was not elected by management. The
net fair values of nontrading derivatives at March 31, 2003 were liabilities of
$0.1 million at Select Energy and assets of $2.3 million at SENY.
Hedging: Select Energy utilizes derivative financial and commodity
instruments, including futures and forward contracts, to reduce market risk
associated with fluctuations in the price of electricity and natural gas
purchased to meet firm sales commitments to certain customers. Select Energy
also utilizes derivatives, including price swap agreements, call and put option
contracts, and futures and forward contracts, to manage the market risk
associated with a portion of its anticipated retail supply requirements. These
derivatives have been designated as cash flow hedging instruments and are used
to reduce the market risk associated with fluctuations in the price of
electricity, natural gas, or oil. A derivative that hedges exposure to the
variable cash flows of a forecasted transaction (a cash flow hedge) is
initially recorded at fair value with changes in fair value recorded in other
comprehensive income. Hedges impact earnings when the forecasted transaction
being hedged occurs, when hedge ineffectiveness is measured and recorded, when
the forecasted transaction being hedged is no longer probable of occurring, or
when there is accumulated other comprehensive loss and the hedge and the
forecasted transaction being hedged are in a loss position on a combined basis.
Select Energy and SENY maintain natural gas service agreements with certain
customers to supply gas at fixed prices for terms extending through 2004.
Select Energy and SENY have hedged their gas supply risk under these agreements
through NYMEX futures contracts. Under these contracts, which also extend
through 2004, the purchase price of a specified quantity of gas is effectively
fixed over the term of the gas service agreements. At March 31, 2003, the
NYMEX futures contracts had notional values of $19.6 million and were recorded
at fair value as a derivative asset of $5.4 million, net of tax. In the first
quarter of 2003 Select Energy designated new gas futures and financial gas
swaps in New England to hedge cash flows throughout 2003 with a derivative
liability value of $1.9 million, net of tax, at March 31, 2003.
B. Market Risk Information
Select Energy, along with SENY, utilizes the sensitivity analysis methodology
to disclose quantitative information for its commodity price risks.
Sensitivity analysis provides a presentation of the potential loss of future
earnings, fair values or cash flows from market risk-sensitive instruments over
a selected time period due to one or more hypothetical changes in commodity
prices, or other similar price changes. Under sensitivity analysis, the fair
value of the portfolio is a function of the underlying commodity, contract
prices and market prices represented by each derivative commodity contract.
For swaps, forward contracts and options, fair value reflects management's best
estimates considering over-the-counter quotations, time value and volatility
factors of the underlying commitments. Exchange-traded futures and options are
recorded at fair value based on closing exchange prices.
Trading Portfolio: At March 31, 2003, Select Energy, along with SENY, has
calculated the market price resulting from a 10 percent change in forward
market prices. That 10 percent change would result in approximately a positive
or negative $0.8 million increase or decrease in the fair value of the Select
Energy and SENY trading portfolio. In the normal course of business, Select
Energy, along with SENY, also faces risks that are either nonfinancial or
nonquantifiable. Such risks principally include credit risk, which is not
reflected in this sensitivity analysis.
Retail and Wholesale Marketing Portfolio: When conducting sensitivity analyses
of the change in the fair value of Select Energy's and SENY's electricity,
natural gas and oil nontrading derivatives portfolio, which would result from
a hypothetical change in the future market price of electricity, natural gas
and oil, the fair values of the contracts are determined from models that take
into account estimated future market prices of electricity, natural gas and
oil, the volatility of the market prices in each period, as well as the time
value factors of the underlying commitments. In most instances, market prices
and volatility are determined from quoted prices on the futures exchange.
Select Energy, along with SENY, has determined a hypothetical change in
the fair value for its retail and wholesale marketing portfolio, which
includes cash flow hedges and electricity, natural gas and oil contracts,
assuming a 10 percent change in forward market prices. At March 31, 2003,
a 10 percent change in market price would have resulted in an increase or
decrease in fair value of approximately $10.8 million.
The impact of a change in electricity, natural gas and oil prices on
Select Energy's and SENY's retail and wholesale marketing portfolio at
March 31, 2003, is not necessarily representative of the results that will
be realized when the commodities provided for in these contracts are
physically delivered.
C. Other Risk Management Activities
Credit Risk Management: Credit risk relates to the risk of loss that NU would
incur as a result of non-performance by counterparties pursuant to the
terms of their contractual obligations. NU serves a wide variety of
customers and suppliers that include independent power producers,
industrial companies, gas and electric utilities, oil and gas producers,
financial institutions, and other energy marketers. Margin accounts exist
within this diverse group, and NU realizes interest receipts and payments
related to balances outstanding in these margin accounts. This wide
customer and supplier mix generates a need for a variety of contractual
structures, products and terms which, in turn, requires NU to manage the
portfolio of market risk inherent in those transactions in a manner
consistent with the parameters established by NU's risk management process.
Credit risks and market risks are monitored regularly by a Risk Oversight
Council operating outside of the business units that create or actively
manage these risk exposures to ensure compliance with NU's stated risk
management policies.
NU tracks and re-balances the risk in its portfolio in accordance with fair
value and other risk management methodologies that utilize forward price curves
in the energy markets to estimate the size and probability of future potential
exposure.
NYMEX traded futures and option contracts are guaranteed by the NYMEX and have
a lower credit risk. Select Energy has established written credit policies
with regard to its counterparties to minimize overall credit risk on all types
of transactions. These policies require an evaluation of potential
counterparties' financial conditions (including credit ratings), collateral
requirements under certain circumstances (including cash in advance, letters of
credit, and parent guarantees), and the use of standardized agreements, which
allow for the netting of positive and negative exposures associated with a
single counterparty. This evaluation results in establishing credit limits
prior to NU entering into trading activities. The appropriateness of these
limits is subject to continuing review. Concentrations among these
counterparties may impact NU's overall exposure to credit risk, either
positively or negatively, in that the counterparties may be similarly affected
by changes to economic, regulatory or other conditions.
17. Special Deposits
Special deposits include cash collateral posted in connection with various
power purchase and sales agreements.
QUARTERLY REPORT OF NORTHEAST UTILITIES
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act of 1935
and the rules and regulations of the Securities and Exchange Commission issued
thereunder, the undersigned company has duly caused this report to be signed
on its behalf by the undersigned officer thereunto duly authorized.
NORTHEAST UTILITIES
-------------------
(Registered Holding Company)
By: /s/ John P. Stack
-----------------------------
(Signature of Signing Officer)
John P. Stack
----------------------------------------
Vice President-Accounting and Controller
----------------------------------------
Date: May 28, 2003
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