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, 2004
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
there under.
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 of Activities
Voting Reported
Name of Energy or Date of State of Securities Nature of During the
Reporting Company Gas Related Organization Organization Held Business Period
----------------- ----------- ------------ ------------ -------------- ---------- ----------
NU Enterprises, Holding 01/04/99 Connecticut 100% by Unregulated (A)
Inc. Northeast businesses
Utilities holding
company
Select Energy, Energy 09/26/96 Connecticut 100% by NU Energy- (B)
Inc. Enterprises, related
Inc. activities
Northeast Energy 01/04/99 Connecticut 100% by NU Energy- (C)
Generation Enterprises, related
Services Company Inc. activities
Select Energy Energy 06/19/90 Massachusetts 100% by NU Energy- (D)
Services, Inc. Enterprises, related
Inc. activities
Reeds Ferry Supply Energy 07/15/64 New Hampshire 100% by Energy- (E)
Co., Inc. Select Energy related
Services, activities
Inc.
HEC/Tobyhanna Energy 09/28/99 Massachusetts 100% by Energy- (F)
Energy Project, Select Energy related
Inc. Services, activities
Inc.
Select Energy Energy 10/12/94 Massachusetts 100% by Energy- (G)
Contracting, Inc. Select Energy related
Services, activities
Inc.
Yankee Energy Holding 02/15/00 Connecticut 100% by Public (H)
System, Inc. Northeast Utility
Utilities Holding
Company
Yankee Energy Energy 07/02/93 Connecticut 100% by Energy- (I)
Services Company Yankee Energy related
System, Inc. activities
R. M. Services, Energy 11/22/94 Connecticut 10% by Yankee Energy- (J)
Inc. Energy related
System, Inc. activities
Acumentrics Energy 09/13/00 Massachusetts 5% by NU Energy- (K)
Corporation Enterprises, related
Inc. activities
ERI/HEC EFA-Med, Energy 09/30/00 Delaware 50% by Select Energy- (L)
LLC Energy related
Services, activities
Inc.
E. S. Boulos Energy 01/10/01 Connecticut 100% by Energy- (M)
Company Northeast related
Generation activities
Services
Company
NGS Mechanical, Energy 01/24/01 Connecticut 100% by Provide (N)
Inc. Northeast mechanical
Generation construction
Services and
Company maintenance
services
HEC/CJTS Energy Energy 03/02/01 Delaware 100% by Facilitate (O)
Center LLC Select Energy construction
Services, financing
Inc.
Select Energy Energy 02/13/96 Delaware 100% by Energy- (P)
New York, Inc. Select related
Energy, Inc. activities
Woods Electrical Energy 07/18/02 Connecticut 100% by Provide (Q)
Co., Inc. Northeast electrical
Generation contracting
Services services
Company
Greenport Power, Energy 02/13/03 Delaware 50% by Energy (R)
LLC Northeast related
Generation construction
Services activities
Company
(A) NU Enterprises, Inc. is not a "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, markets and sells 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 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.
(C) Northeast Generation Services Company (NGS) provides 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. Within
the SS platform, its offerings include electrical maintenance and
laboratory analysis. Within the CMS platform, the product and service
offerings include mechanical maintenance services and engineering and
environmental consulting services, with an emphasis on power plant
systems.
(D) Select Energy Services, Inc. (formerly HEC Inc.) is not a "reporting
company" but is included in this Item 1 because it holds, directly or
indirectly, voting securities issued by reporting companies as indicated
above.
(E) Reed's Ferry Supply Co., Inc. is an equipment wholesaler which purchases
equipment on behalf of Select Energy Contracting, Inc.
(F) HEC/Tobyhanna Energy Project, Inc. was established as a special purpose
entity to manage the assets of an Energy Savings Performance Contract
project at the Tobyhanna Army Depot.
(G) Select Energy Contracting, Inc. designs, manages and directs the
construction of, and/or installation of mechanical, water, and
electrical systems, energy and other resource consuming equipment.
(H) Yankee Energy System, Inc. is not a "reporting company" but is included
in this Item 1 because it holds, directly or indirectly, voting
securities issued by reporting companies as indicated above.
(I) Yankee Energy Services Company has disposed of most of its assets and is
winding down its energy-related business.
(J) R. M. Services, Inc. provides consumer collection services for companies
throughout the United States.
(K) 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.
(L) 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.
(M) 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, New York, and Vermont.
(N) NGS Mechanical, Inc. (NGSM) performs power plant operations, maintenance
and capital project support. NGSM is registered to do business in
Massachusetts, New Hampshire, Maine, Vermont, Rhode Island, and New
York.
(O) 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 activities other than those related to the lease related to such
project.
(P) Select Energy New York, Inc. is engaged in the brokering, marketing,
transportation, storage, and sale of energy commodities.
(Q) Woods Electrical Co., Inc. is in the electrical contracting business
mainly in Connecticut. Woods is registered to do business in
Connecticut, Massachusetts, Maine and New Hampshire.
(R) 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 Commons 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, which is not an affiliate of NU, and NGS each
own 50% of Greenport.
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, 2004
----------------------- ------------------------ -------------- --------------
(Thousands
of Dollars)
Northeast Northeast
Generation Generation
Services Company Company Power Plant $ 9,024
=========
Northeast NGS
Generation Mechanical,
Services Company Inc. Miscellaneous $ 2
=========
Northeast
Generation Woods Network
Services Company Services, Inc. Miscellaneous $ 9
=========
Northeast The Connecticut
Generation Light and Power
Services Company Company Electrical Services $ 101
=========
Northeast
Generation Holyoke Water
Services Company Power Company Power Plant $ 3,080
=========
Northeast
Generation Select Energy
Services Company Services, Inc. Power Plant $ 920
=========
Northeast Public Service
Generation Company of Electrical and
Services Company New Hampshire Mechanical Services $ 102
=========
Northeast
Generation Yankee Energy
Services Company Services Inc. Miscellaneous $ 1
=========
Northeast
Generation Wholesale Purchasing
Services Company E.S. Boulos Company Services $ 14
=========
Northeast
Generation Woods Electrical
Services Company Co., Inc. Miscellaneous $ 4
=========
Northeast
Generation Woods Network
Services Company Servies, Inc. Miscellaneous $ 4
=========
Reeds Ferry Select Energy Wholesale Purchasing
Supply Co., Inc. Contracting, Inc. Services $ 295
=========
Northeast
Generation
E.S. Boulos Company Services Company Electrical Services $ 126
=========
Select Energy Wholesale Purchasing
Select Energy, Inc. New York, Inc. Services $ 314
=========
Northeast
Generation
Select Energy, Inc. Services Company Miscellaneous $ 1
=========
Northeast Utilities
Select Energy, Inc. Service Company Miscellaneous $ 519
=========
* 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, 2004
----------------------- ------------------------ -------------- --------------
(Thousands
of Dollars)
Northeast Generation Northeast Generation
Company Services Company Miscellaneous $ 368
=========
Public Service
Company of Northeast Generation
New Hampshire Services Company Miscellaneous $ 4
=========
Public Service
Company of
New Hampshire Select Energy, Inc. Miscellaneous $ 17
=========
The Connecticut
Light and Power Northeast Generation
Company Services Company Miscellaneous $ 9
=========
Holyoke Water Northeast Generation
Power Company Services Company Miscellaneous $ 227
=========
Western
Massachusetts Northeast Generation
Electric Company Services Company Miscellaneous $ 30
=========
Northeast Utilities Select Energy
Service Company New York, Inc. Miscellaneous $ 211
=========
Northeast Utilities Northeast Generation
Service Company Services Company Miscellaneous $ 942
=========
Northeast Utilities
Service Company Select Energy, Inc. Miscellaneous $ 4,526
=========
* 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 03/31/04 $6,774,469 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 1,016,170 line 2
Greater of $50 million or line 2 $1,016,170 line 3
Total current aggregate investment:
Select Energy, Inc. 769,649
Northeast Generation Services Company 28,946
Select Energy Contracting, Inc. 15,379
Select Energy New York, Inc. 71,017
Woods Electrical Co., Inc. 14,815
Reeds Ferry Supply Co., Inc. 7
HEC/Tobyhanna Energy Project, Inc. -
Yankee Energy Services Company 7,882
E.S. Boulos Company 11,505
R.M. Services, Inc. 16,033
NGS Mechanical, Inc. 10
Acumentrics Corporation 7,500
Greenport, LLC 501
ERI/HEC EFA-Med, LLC 9
HEC/CJTS Energy Center LLC 12
------------
Current aggregate investment 943,265
------------
Elimination * 22,506
------------
Total current aggregate investment 920,759 line 4
------------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $95,411 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, 2004
Income Statement - Three months ended March 31, 2004
Northeast Generation Services Company:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
Select Energy Contracting, Inc.:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
Reeds Ferry Supply Co., Inc.:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
HEC/Tobyhanna Energy Project, Inc.:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
Yankee Energy Services Company:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
ERI/HEC EFA-Med, LLC:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
E. S. Boulos Company:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
NGS Mechanical, Inc.:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
Select Energy New York, Inc.:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
HEC/CJTS Energy Center LLC:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
Woods Electrical Co., Inc.:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
Greenport Power, LLC:
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
Acumentrics Corporation:
Not available
R. M. Services, Inc.:
Not available
Northeast Utilities (Parent):
Balance Sheet - As of March 31, 2004
Income Statement - Three months ended March 31, 2004
B. Exhibits
Exhibit No. Description
----------- -----------
6.B.1.1 Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.2 Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3 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.1.4c 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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Unrestricted cash from counterparties $ 65,614
Special deposits 1,637
Receivables, net 351,579
Accounts receivable from affiliated companies 130,928
Unbilled revenues 40,198
Taxes receivable 8,862
Derivative assets 260,438
Prepaid option premiums 13,061
Prepayments and other 9,051
-------------
881,368
-------------
Property, Plant and Equipment:
Competitive Energy 14,233
Less: Accumulated depreciation and amortization 12,019
-------------
2,214
Construction work in progress 6,848
-------------
9,062
-------------
Deferred Debits and Other Assets:
Purchased intangible assets, net 13,524
Prepaid pension 1,146
Long-term accounts receivable 6,067
Long-term contracts asset 38,006
Other 41,771
-------------
100,514
-------------
Total Assets $ 990,944
=============
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,
2004
-------------
(Thousands of
Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 23,100
Accounts payable 409,319
Accounts payable to affiliated companies 22,242
Derivative liabilities 170,064
Unearned option premiums 8,395
Counterparty deposits 65,614
Other 32,594
-------------
731,328
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 33,548
Other 8,370
-------------
41,918
-------------
Capitalization:
Long-Term Debt from NU Parent 150,000
-------------
Common Stockholder's Equity:
Common stock, $1 par value - Authorized
20,000 shares; 100 shares outstanding -
Capital surplus, paid in 286,210
Accumulated deficit (260,277)
Accumulated other comprehensive income 41,765
-------------
Common Stockholder's Equity 67,698
-------------
Total Capitalization 217,698
-------------
Total Liabilities and Capitalization $ 990,944
=============
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.
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands of
Dollars)
Operating Revenues $ 657,691
-------------
Operating Expenses:
Operation -
Purchased power, net interchange power
and capacity 623,195
Other 17,744
Depreciation and amortization 1,769
Taxes other than income taxes 3,563
-------------
Total operating expenses 646,271
-------------
Operating Income 11,420
Interest Expense, Net 2,701
Other Income, Net 3,671
-------------
Income Before Income Tax Expense 12,390
Income Tax Expense 3,281
-------------
Net Income $ 9,109
=============
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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash and cash equivalents $ 678
Receivables, net 3,516
Accounts receivable from affiliated companies 4,611
Unbilled revenues 35
Materials and supplies 4
Prepayments and other 646
-------------
9,490
-------------
Property, Plant and Equipment:
Competitive energy 3,642
Less: Accumulated depreciation 1,112
-------------
2,530
Construction work in progress 53
-------------
2,583
-------------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 226
Prepaid pension 350
Other 21,673
-------------
22,249
-------------
Total Assets $ 34,322
=============
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,
2004
-------------
(Thousands of
Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 6,700
Accounts payable 3,209
Accounts payable to affiliated companies 3,509
Accrued taxes 347
Other 997
-------------
14,762
-------------
Deferred Credits and Other Liabilities 1,150
-------------
Capitalization:
Long-Term Debt from NU Parent 5,000
-------------
Common Stockholder's Equity:
Common stock, $1 par value - 20,000 authorized
and 100 shares outstanding -
Capital surplus, paid in 15,445
Accumulated deficit (2,022)
Accumulated comprehensive loss (13)
-------------
Common Stockholder's Equity 13,410
-------------
Total Capitalization 18,410
-------------
Total Liabilities and Capitalization $ 34,322
=============
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
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands of
Dollars)
Operating Revenues $ 12,749
-------------
Operating Expenses:
Operation -
Other 8,215
Maintenance 3,562
Depreciation and amortization 68
Taxes other than income taxes 613
-------------
Total operating expenses 12,458
-------------
Operating Income 291
Interest Expense, Net 133
Other Income, Net 14
-------------
Income Before Income Tax Expense 172
Income Tax Expense 51
-------------
Net Income $ 121
=============
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,
2004
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 18,935
Materials and supplies 625
Prepayments and other 693
-------------
20,253
-------------
Property, Plant and Equipment:
Competitive energy 5,549
Less: Accumulated depreciation 2,955
-------------
2,594
-------------
Deferred Debits and Other Assets:
Goodwill, net 17,220
Other 1,545
-------------
18,765
-------------
Total Assets $ 41,612
=============
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,
2004
------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 5,182
Accounts payable to affiliated companies 12,572
Accrued taxes 436
Other 4,464
-------------
22,654
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,477
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $1 par value - 100,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 15,075
Retained earnings 2,406
-------------
Common Stockholder's Equity 17,481
-------------
Total Capitalization 17,481
-------------
Total Liabilities and Capitalization $ 41,612
=============
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.
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands
of Dollars)
Operating Revenues $ 16,174
-------------
Operating Expenses:
Operation 15,882
Maintenance 108
Depreciation 286
-------------
Total operating expenses 16,276
-------------
Operating Loss (102)
Interest Expense, Net 33
Other Income, Net 1
-------------
Loss Before Income Tax Benefit (134)
Income Tax Benefit (38)
-------------
Net Loss $ (96)
=============
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,
2004
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 5
Receivables, net 79
-------------
84
-------------
Deferred Debits and Other Assets:
Goodwill, net 247
-------------
Total Assets $ 331
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 78
Accounts payable to affiliated companies 295
-------------
373
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 $ 331
=============
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.
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands
of Dollars)
Operating Revenues $ 208
Operating Expenses 208
-------------
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,
2004
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Special deposits $ 4,441
Receivables, net 383
-------------
4,824
-------------
Deferred Debits and Other Assets:
Contracts receivable 27,173
Unamortized debt expense 567
-------------
27,740
-------------
Total Assets $ 32,564
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Long-term debt - current portion $ 599
Accounts payable to affiliated companies 7,365
Accrued taxes 74
Accrued interest 234
Other 293
-------------
8,565
-------------
Capitalization:
Long-Term Debt 23,067
-------------
Common Stockholder's Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Retained earnings 932
-------------
Total Common Stockholder's Equity 932
-------------
Total Capitalization 23,999
-------------
Total Liabilities and Capitalization $ 32,564
=============
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.
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands
of Dollars)
Interest Expense, Net $ 463
Other Income, Net 568
-------------
Income Before Income Tax Expense 105
Income Tax Expense 75
-------------
Net Income $ 30
=============
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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash $ 803
Notes receivable from affiliated companies 100
Receivables, net 5
Taxes receivable 2
-------------
910
-------------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 1,287
Investments and other 1,491
-------------
2,778
-------------
Total Assets $ 3,688
=============
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,
2004
-------------
(Thousands of
Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 455
Other 3
-------------
458
-------------
Deferred Credits and Other Liabilities 5
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $0 par value - 10,000 shares
authorized, 200 shares outstanding 1
Capital surplus, paid in 7,881
Accumulated deficit (4,657)
-------------
Common Stockholder's Equity 3,225
-------------
Total Capitalization 3,225
-------------
Total Liabilities and Capitalization $ 3,688
=============
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
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
--------------
(Thousands of
Dollars)
Operating Revenues $ -
Operating Expenses 2
-------------
Operating Loss (2)
Other Loss, Net (2,484)
-------------
Loss Before Income Tax Benefit (2,486)
Income Tax Benefit (1,020)
-------------
Net Loss $ (1,466)
=============
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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash $ 87
Receivables, net 9,202
Accounts receivable from affiliated companies 81
Unbilled revenues 3,787
Materials and supplies 203
-------------
13,360
-------------
Property, Plant and Equipment:
Competitive energy 1,204
Less: Accumulated depreciation 442
-------------
762
-------------
Deferred Debits and Other Assets:
Goodwill 6,963
Purchased intangible assets, net 30
Other 45
-------------
7,038
-------------
Total Assets $ 21,160
=============
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,
2004
-------------
(Thousands of
Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Advance from parent, non-interest bearing $ 2,948
Accounts payable 2,641
Accounts payable to affiliated companies 353
Accrued taxes 307
Other 396
-------------
6,645
-------------
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 519
Other 730
-------------
1,249
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $0 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 7,539
Retained earnings 5,727
-------------
Common Stockholder's Equity 13,266
-------------
Total Capitalization 13,266
-------------
Total Liabilities and Capitalization $ 21,160
=============
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
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands of
Dollars)
Operating Revenues $ 9,650
-------------
Operating Expenses:
Operation -
Other 347
Maintenance 8,854
Depreciation 60
-------------
Total operating expenses 9,261
-------------
Income Before Income Tax Expense 389
Income Tax Expense 145
-------------
Net Income $ 244
=============
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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash $ 10
Receivables, net 2
-------------
Total Assets $ 12
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 5
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $0 par value - authorized
20,000 shares; outstanding 100 shares -
Capital surplus, paid in 10
Retained deficit (3)
-------------
Common Stockholder's Equity 7
-------------
Total Capitalization 7
-------------
Total Liabilities and Capitalization $ 12
=============
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.
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(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,
2004
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 897
Notes receivable from affiliated companies 191,300
Notes and accounts receivable 4,847
Accounts receivable from affiliated companies 2,422
Taxes receivable 1,590
Derivative assets 5,688
Prepayments 205
-------------
206,949
-------------
Deferred Debits and Other Assets:
Investments in subsidiary companies, at equity 2,615,153
Other 14,781
-------------
2,629,934
-------------
Total Assets $ 2,836,883
=============
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,
2004
------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Long-term debt - current portion $ 25,000
Accounts payable 72
Accounts payable to affiliated companies 87
Accrued interest 12,942
Other 327
-------------
38,428
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,286
Other 1,416
-------------
5,702
-------------
Capitalization:
Long-Term Debt 459,397
-------------
Common Stockholder's Equity:
Common shares, $5 par value - authorized
225,000,000 shares; 150,562,489 shares issued and
127,942,036 shares outstanding 752,812
Capital surplus, paid in 1,110,094
Deferred contribution plan - employee stock
ownership plan (70,665)
Retained earnings 857,197
Accumulated other comprehensive loss 42,857
Treasury stock (358,939)
-------------
Common Stockholder's Equity 2,333,356
-------------
Total Capitalization 2,792,753
-------------
Total Liabilities and Capitalization $ 2,836,883
=============
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)
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands
of Dollars)
Operating Revenues $ -
-------------
Operating Expenses:
Other 2,605
-------------
Operating Loss (2,605)
-------------
Interest Expense 5,524
-------------
Other Income, Net:
Equity in earnings of subsidiaries 69,776
Other 4,250
-------------
Other income, net 74,026
-------------
Income Before Income Tax Benefit 65,897
Income Tax Benefit 1,545
-------------
Net Income $ 67,442
=============
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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash $ 1,602
Unrestricted cash from counterparties 5,292
Receivables, net 55,014
Accounts receivable from affiliated companies 3,029
Notes receivable from affiliated companies 26,000
Special deposits 3,152
Derivative assets 10,158
Prepaid option premiums 2,815
Prepayments and other 5,314
-------------
112,376
-------------
Property, Plant and Equipment:
Competitive energy 689
Less: Accumulated depreciation 403
-------------
286
-------------
Construction work in progress 21
-------------
307
-------------
Deferred Debits and Other Assets:
Goodwill 3,200
-------------
Total Assets $ 115,883
=============
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,
2004
-------------
(Thousands of
Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Accounts payable $ 28,803
Accounts payable to affiliated companies 9,586
Accrued taxes 5,110
Derivative liabilities 3,025
Counterparty deposits 5,292
Other 1,149
-------------
52,965
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,757
Accrued pension 1,201
Other 493
-------------
6,451
-------------
Capitalization:
Long-Term Debt from NU Parent 14,699
-------------
Common Stockholder's Equity:
Common stock, $1 par value - authorized
and outstanding 10,000 shares 10
Capital surplus, paid in 9,957
Retained earnings 26,502
Accumulated other comprehensive income 5,299
-------------
Common Stockholder's Equity 41,768
-------------
Total Capitalization 56,467
-------------
Total Liabilities and Capitalization $ 115,883
=============
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.
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands of
Dollars)
Operating Revenues $ 129,886
-------------
Operating Expenses:
Purchased power, net interchange
power and capacity 122,996
Other 969
Taxes other than income taxes (343)
-------------
Total operating expenses 123,622
-------------
Operating Income 6,264
Interest Expense, Net 86
Other Income, Net 61
-------------
Income Before Income Tax Expense 6,239
Income Tax Expense 2,490
-------------
Net Income $ 3,749
=============
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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Total Assets $ -
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Capitalization:
Common Stockholder's Equity:
Capital surplus, paid in $ 12
Accumulated deficit (12)
-------------
Common Stockholder's Equity -
-
Total Capitalization -
-------------
Total Liabilities and Capitalization $ -
=============
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
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(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,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash $ 11
Receivables, net 4,381
Unbilled revenues 416
Materials and supplies 71
Prepayments and other 4
-------------
4,883
-------------
Property Plant and Equipment:
Competitive energy 255
Less: Accumulated depreciation and amortization 67
--------------
188
--------------
Deferred Debits and Other Assets:
Goodwill 3,218
Purchased intangible assets, net 4,450
--------------
7,668
--------------
Total Assets $ 12,739
==============
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,
2004
-------------
(Thousands of
Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 950
Advance from parent, non-interest bearing 250
Accounts payable 1,624
Accounts payable to affiliated companies 57
Accrued taxes 38
Other 144
-------------
3,063
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 276
Other 609
-------------
885
-------------
Capitalization:
Long-Term Debt from NU Parent 4,450
-------------
Common Stockholder's Equity:
Common stock, $0 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 5,000
Accumulated deficit (659)
-------------
Common Stockholder's Equity 4,341
-------------
Total Capitalization 8,791
-------------
Total Liabilities and Capitalization $ 12,739
=============
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.
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands of
Dollars)
Operating Revenues $ 3,732
-------------
Operating Expenses:
Other 390
Maintenance 3,487
Depreciation 13
-------------
Total operating expenses 3,890
-------------
Operating Loss (158)
Interest Expense, Net 83
Other Income, Net 1
-------------
Loss Before Income Tax Benefit (240)
Income Tax Benefit (98)
-------------
Net Loss $ (142)
=============
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.
Greenport Power, LLC
BALANCE SHEET
(Unaudited)
March 31,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash $ 533
-------------
Total Assets $ 533
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 154
Other 202
-------------
356
-------------
Capitalization:
Common Stockholder's Equity:
Members equity 177
-------------
Common Stockholder's Equity 177
-------------
Total Capitalization 177
-------------
Total Liabilities and Capitalization $ 533
=============
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 has a 50 percent ownership interest in
Greenport Power, LLC.
Greenport Power, LLC
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(Thousands of
Dollars)
Operating Revenues $ -
Operating Expenses 80
-------------
Net Loss $ (80)
=============
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 has a 50 percent ownership interest in
Greenport Power, LLC.
ERI/HEC EFA-Med, LLC
BALANCE SHEET
(Unaudited)
March 31,
2004
-------------
(Thousands of
Dollars)
ASSETS
------
Current Assets:
Cash $ 2
-------------
Total Assets $ 2
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Capitalization:
Common Stockholder's Equity:
Capital surplus, paid in $ 18
Accumulated deficit (16)
-------------
Common Stockholder's Equity 2
-------------
Total Capitalization 2
-------------
Total Liabilities and Capitalization $ 2
=============
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 Services, Inc. has a 50 percent ownership interest in
ERI/HEC EFA-Med, LLC.
ERI/HEC EFA-Med, LLC
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
March 31,
2004
-------------
(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.
Select Energy Services, Inc. has a 50 percent ownership interest in
ERI/HEC EFA-Med, LLC.
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.
Greenport Power, LLC
Select Energy Contracting, Inc.
Reeds Ferry Supply Co., Inc.
HEC/Tobyhanna Energy Project, Inc.
HEC/CJTS Energy Center LLC
ERI/HEC EFA-Med, 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 Massachusetts through three wholly owned
subsidiaries: The Connecticut Light and Power Company, Public Service Company
of New Hampshire and Western Massachusetts Electric Company. 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. Northeast Utilities Service Company provides centralized
accounting, administrative, engineering, financial, information technology,
legal, operational, planning, purchasing, and other services to NU's
companies. Three other subsidiaries construct, acquire or lease some of the
property and facilities used by NU's companies.
NU Enterprises, Inc. (NU Enterprises) 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, primarily in the competitive energy retail
and wholesale commodity, marketing and services fields. Northeast Generation
Company acquires 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. Greenport Power, LLC
(Greenport) is a joint venture that is 50 percent owned by 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.
Another company, ERI/HEC EFA-Med, LLC (ERI/HEC), is 50 percent owned by SESI.
Yankee maintains certain wholly owned subsidiaries, including Yankee Energy
Services Company (YESCO).
NU Enterprises is grouped into two business segments: the merchant energy
business segment and the energy services business segment. The merchant
energy business segment is comprised of Select Energy's wholesale and retail
businesses. The energy services business segment consists of the operations
of NGS, SESI and Woods Network.
Select Energy, SENY, NGS, Boulos, NGS Mechanical, Woods Electrical,
Greenport, Select Energy Contracting, Reeds Ferry, HEC/Tobyhanna, HEC/CJTS,
ERI/HEC and YESCO are "energy-related companies" under rule 58. These
footnotes are applicable to the rule 58 companies with financial statements
filed in this report on Form U-9C-3 under Item 6 Section A.
2. About Select Energy
Select Energy's merchant energy business segment includes wholesale marketing
and retail marketing businesses. The wholesale marketing business includes
wholesale origination, portfolio management and the operation of more than
1,400 megawatts of pumped storage, hydroelectric and coal-fired generation
assets. Select Energy is an integrated energy business that buys, markets
and sells 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 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 in the electrical contracting business in Connecticut and
is a wholly owned subsidiary of NGS. Woods Electrical is also registered in
the electrical contracting business in Maine, Massachusetts and New
Hampshire. NGS acquired Woods Electrical on July 31, 2002.
8. About Greenport
Greenport is a limited liability company that was established 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 generation facility
construction project in Greenport, Long Island, New York. Greenport is 50
percent owned by NGS.
9. About Select Energy Contracting
Select Energy Contracting designs, manages and directs the construction of,
and/or installation of mechanical, water and electrical systems and other
resource consuming equipment.
10. About Reeds Ferry
Reeds Ferry is an equipment wholesaler which purchases equipment on behalf of
Select Energy Contracting.
11. 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.
12. 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.
13. About ERI/HEC
ERI/HEC was established on September 30, 2000, by SESI and ERI Services, Inc.
to enter into an indefinite delivery/indefinite quantity contract with the
United States Navy. ERI/HEC is 50 percent owned by SESI.
14. About YESCO
YESCO has disposed of most of its assets and has wound down its energy-
related services for its customers.
15. 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. NU's operating subsidiaries are subject to further
regulation for rates, accounting and other matters by the FERC and/or
applicable state regulatory commissions.
16. 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.
17. New Accounting Standards
Consolidation of Variable Interest Entities: In December 2003, the Financial
Accounting Standards Board (FASB) issued a revised version of FASB
Interpretation No. (FIN) 46, "Consolidation of Variable Interest Entities,"
(FIN 46R). FIN 46R was effective for NU for the first quarter of 2004 and
did not have an impact on any of NU's previously identified variable interest
entities (VIE). Based on management's review of NU's independent power
producer (IPP) contracts, no new VIEs have been identified.
18. Derivative Instruments, Market Risk and Risk Management
A. Derivative Instruments
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 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 designated as fair
value hedges and the item they are hedging are both recorded at fair value on
the balance sheets. Derivative contracts that are entered into as a normal
purchase or sale and are probable of resulting in physical delivery, and are
documented as such, are recorded under accrual accounting.
Through the first quarter of 2004 there were no changes to interpretations of
SFAS No. 133, but the FASB continues to consider changes that could affect
the way Select Energy and SENY record and disclose derivative and hedging
activities.
The tables below summarize Select Energy's and SENY's derivative assets and
liabilities at March 31, 2004. These amounts do not include option premiums
paid, which are recorded as prepayments and amounted to $6.5 million for
Select Energy related to energy trading activities and $9.4 million ($6.6
million for Select Energy and $2.8 million for SENY) related to marketing
activities at March 31, 2004. These amounts also do not include option
premiums received by Select Energy, which are recorded as other current
liabilities and amounted to $8.4 million related to energy trading activities
at March 31, 2004.
-------------------------------------------------------------------------------
(Millions of Dollars) Assets Liabilities Total
-------------------------------------------------------------------------------
Select Energy:
Trading $ 187.4 $ (158.0) $ 29.4
Non-trading 0.3 - 0.3
Hedging 72.7 (12.1) 60.6
-------------------------------------------------------------------------------
Total $ 260.4 $ (170.1) $ 90.3
===============================================================================
-------------------------------------------------------------------------------
(Millions of Dollars) Assets Liabilities Total
-------------------------------------------------------------------------------
SENY:
Trading $ 0.9 $ (2.9) $ (2.0)
Non-trading 0.3 (0.1) 0.2
Hedging 9.0 - 9.0
-------------------------------------------------------------------------------
Total $ 10.2 $ (3.0) $ 7.2
===============================================================================
Trading: To gather market intelligence and utilize this information in risk
management activities for the wholesale marketing activities, Select Energy
conducts limited energy trading activities in electricity, natural gas, and
oil, and therefore, experiences net open positions. Select Energy and SENY
manage these open positions with strict policies that limit its exposure to
market risk and require daily reporting to management of potential financial
exposures.
Derivatives used in trading activities are recorded at fair value and
included in the balance sheets as derivative assets or liabilities. Changes
in fair value are recognized in operating revenues in the statements of
income in the period of change. The net fair value positions of the trading
portfolio at March 31, 2004 were assets of $29.4 million for Select Energy
and liabilities of $2.0 million for SENY.
Select Energy's and SENY'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 market prices; and
bilateral contracts for the purchase or sale of electricity or natural gas,
the fair value of which is determined using available information from
external sources. SENY's trading portfolio also includes transmission
congestion contracts (TCCs). The fair value of TCCs included in the trading
portfolio is based on published market data.
Non-trading: Non-trading derivative contracts are used for delivery of energy
related to Select Energy's and SENY's wholesale and retail marketing
activities. These contracts are subject to fair value accounting because
these contracts are derivatives that cannot be designated as normal purchases
or sales, as defined. 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 management did not elect the
normal purchases and sales designation. Changes in fair value of a negative
$0.3 million of non-trading derivative contracts were recorded in revenues in
the first quarter of 2004.
Market information for TCCs included in non-trading is not available, and
those contracts cannot be reliably valued. Management believes the amounts
paid for these contracts, which total $2.8 million and are included in
premiums paid, are equal to their fair value.
Hedging: Select Energy and SENY utilize 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
and SENY also utilize 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 supply and delivery
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 accumulated other comprehensive income. Cash flow hedges
impact net income 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 2006.
Select Energy and SENY have hedged its gas supply risk under these agreements
through NYMEX futures contracts. Under these contracts, which also extend
through 2006, the purchase price of a specified quantity of gas is
effectively fixed over the term of the gas service agreements. At March 31,
2004 the NYMEX futures contracts had notional values of $53.5 million and
were recorded at fair value as derivative assets of $13.5 million.
Select Energy maintains power swaps to hedge purchases in New England as well
as financial gas contracts and gas futures to hedge electricity purchase
contracts that are indexed to gas prices. These hedging contracts, which are
valued at the mid-point of bid and ask market prices, were recorded as
derivative assets of $45.4 million and derivative liabilities of $12.7
million at March 31, 2004.
To hedge the congestion price differences associated with locational marginal
pricing in the New England and the Pennsylvania, New Jersey, Maryland and
Delaware (PJM) regions, Select Energy holds Financial Transmission Rights
(FTR) contracts recorded as a derivative asset at a fair value of $1.1
million at March 31, 2004.
Other hedging derivative assets, which are valued at the mid-point of bid and
ask market prices, include forwards, futures, options and swaps to hedge
Select Energy's basic generation service (BGS) contracts in the PJM region
and were recorded at fair value as derivative assets of $10.9 million at
March 31, 2004.
SENY maintains financial power swaps to hedge its retail sales portfolio
through 2004, which were also valued at the mid-point of bid and ask market
prices. These contracts were recorded at fair value as derivative assets of
$7.1 million at March 31, 2004.
In the first quarter of 2004, Select Energy began hedging natural gas
inventory with gas futures that qualify as fair value hedges. The changes in
fair value of the futures and the hedged inventory are recorded on the
balance sheets.
B. Market Risk Information
Select Energy and SENY utilize 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.
Wholesale and Retail 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 on the wholesale and retail marketing
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 consideration 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 and SENY have determined a hypothetical change in the fair
value for its wholesale and retail 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, 2004, a 10 percent
change in market price would have resulted in an increase or decrease in fair
value of between $14.3 million and $16.6 million.
The impact of a change in electricity, natural gas and oil prices on Select
Energy's and SENY's wholesale and retail marketing portfolio at March 31,
2004, is not necessarily representative of the results that will be realized
when these contracts are physically delivered.
Trading Contracts: At March 31, 2004, Select Energy and SENY have calculated
the market price resulting from a 10 percent change in forward market prices.
That 10 percent change would result in a $0.8 million increase or decrease in
the fair value of the Select Energy trading portfolio. In the normal course
of business, Select Energy and SENY also face risks that are either non-
financial or non-quantifiable. These risks principally include credit risk,
which is not reflected in this sensitivity analysis.
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 IPPs, 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 at NU Enterprises are monitored regularly by a
Risk Oversight Council operating outside of the business lines 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 cleared off the NYMEX exchange are
ultimately guaranteed by NYMEX to Select Energy and SENY. Select Energy and
SENY have 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
condition (including credit ratings), collateral requirements under certain
circumstances (including cash in advance, LOCs, 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 Select Energy and
SENY entering into energy contracts. The appropriateness of these limits is
subject to continuing review. Concentrations among these counterparties may
impact Select Energy's and SENY'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.
At March 31, 2004, Select Energy and SENY maintained collateral balances from
counterparties of $70.9 million ($65.6 million for Select Energy and $5.3
million for SENY). These amounts are included in both unrestricted cash from
counterparties and other current liabilities on the accompanying balance
sheets.
19. Unrestricted Cash from Counterparties
Unrestricted cash on deposit from counterparties represents balances
collected from counterparties resulting from Select Energy's and SENY's
credit management activities. An offsetting liability has been recorded in
other current liabilities for the amounts collected. To the extent Select
Energy or SENY requires collateral from counterparties, cash is held as a
part of the total collateral required. The right to hold such cash
collateral in an unrestricted manner is determined by the terms of Select
Energy's and SENY's agreements. Key factors affecting the unrestricted
status of a portion of this cash collateral include the financial standing of
Select Energy or SENY and their credit support provider.
20. Special Deposits
Special deposits represents amounts Select Energy and SENY have on deposit
with counterparties and brokerage firms in the amount of $4.8 million.
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 there under, 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 27, 2004
-------------------