NE ELECTRIC SEES HIGHER CONSTRUCTION OUTLAYS

  New England Electric System &lt;NES>
  expects its cash construction spending to reach 205 mln dlrs
  this year, up from 188 mln dlrs in 1986, the utility said in
  material distributed at an analysts meeting.
      It said spending is expected to advance to 215 mln dlrs in
  1988 and 220 mln dlrs in 1989.
      The utility said these totals exclude spending on New
  England Hydro-Transmission being built to import electricity
  from Quebec Hydro. New England Electric is the operator of this
  venture as well as owning 51 pct of the project.
      The venture expects to spend 65 mln dlr this year, 105 mln
  dlrs next year and 125 mln dlrs in 1989 to build transmission
  lines from northern Quebec into New England, the utility said.
      New England Electric said internally generated funds will
  cover all of its power plant construction costs this year and
  65 pct of the 108 mln dlrs its retail distribution units plan
  to spend in 1987.
      The company said it also expects to spend 60 mln dlrs on
  its oil and gas activities this year, adding internally
  generated funds are expected to provide 85 pct of this total.
      New England Electric said it plans to issue 30 mln dlrs
  worth of pollution control bonds in 1987 and retire additional
  higher cost preferred stock. Its Granite State Electric unit
  plans to issue five mln dlrs of long term notes early this year
  as well.
      The company said it does not plan to offer common shares
  this year or in the foreseeable future, but expects to raise
  about 40 mln dlrs in equity through the sale of stock under its
  dividend reinvestment plan and employee share plans.
      President Samuel Huntington told the analysts the
  construction spending projection is based on the expectation
  that demand for electricity in the New England electric system
  will grow about two pct a year for the next 15 years.
      However, the utility cannot ignore the potential for
  sharper growth, he said, pointing out that demand was up 5.2
  pct in 1986 and 4.7 pct per year in the past four years.
      He attributed this growth to declining electricity prices
  and a strong New England economy.
      Huntington said New England Elecetric has "all but rejected
  new coal fired plants" to supply additional power.
      He said the most attractive new power supplies are those
  with short lead times which can be built in modules.
      Later, vice president Glenn Schleede said the utility is
  looking at gas-fired, combined cycle generating units to supply
  most of its new power needs, but has not rejected coal-fired
  fluidized bed units.
      He explained that fluidized bed technology is available in
  modular units, adding that Huntington was referring to the
  traditional coal-fired plant which burns pulverized coal.
  

