Item 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . .1 System Overview . . . . . . . . . . . . . . . . . . . . . .1 General - Core Electric Business. . . . . . . . . . . . . .1 Electric Utility Industry Restructuring . . . . . . . . . .5 Unbundled Services . . . . . . . . . . . . . . . . . .5 Stranded Costs . . . . . . . . . . . . . . . . . . . .5 Rhode Island Utility Restructuring Act of 1996 . . . .5 Massachusetts Restructuring Settlement . . . . . . . .6 Other. . . . . . . . . . . . . . . . . . . . . . . . .8 General - EUA Cogenex . . . . . . . . . . . . . . . . . . .8 Construction . . . . . . . . . . . . . . . . . . . . . . 11 Construction Program - EUA:. . . . . . . . . . . . . 11 Construction Program - Blackstone. . . . . . . . . . 11 Construction Program - Eastern Edison. . . . . . . . 12 Fuel for Generation . . . . . . . . . . . . . . . . . . . 12
Nuclear Power Issues . . . . . . . . . . . . . . . . . . 14 General . . . . . . . . . . . . . . . . . . . . . . 14 Decommissioning. . . . . . . . . . . . . . . . . . . 15 Yankee Atomic. . . . . . . . . . . . . . . . . . . . 16 Connecticut Yankee . . . . . . . . . . . . . . . . . 16 Recent NRC Actions . . . . . . . . . . . . . . . . . 16 Millstone III . . . . . . . . . . . . . . . . . 16 Maine Yankee. . . . . . . . . . . . . . . . . . 17 General . . . . . . . . . . . . . . . . . . . . 18
Public Utility Regulation . . . . . . . . . . . . . . . . 18
Rates . . . . . . . . . . . . . . . . . . . . . . . . . 20 FERC Proceedings . . . . . . . . . . . . . . . . . . 22 Massachusetts Proceedings. . . . . . . . . . . . . . 22 Rhode Island Proceedings . . . . . . . . . . . . . . 24
Environmental Regulation . . . . . . . . . . . . . . . . 27 General. . . . . . . . . . . . . . . . . . . . . . . 27 Electric and Magnetic Fields . . . . . . . . . . . . 28 Water Regulation . . . . . . . . . . . . . . . . . . 28 Air Regulation . . . . . . . . . . . . . . . . . . . 29
Environmental Regulation of Nuclear Power . . . . . . . . 31
Item 2.
Item 2. PROPERTIES -- Power Supply)). The cost of coal averaged about $49.90 per ton in 1996 which is equivalent to oil at $12.16 per barrel. This was the same as 1995. Montaup coal is under contract, and coal prices have historically been very stable. Montaup also maintained an average inventory of Nos. 2 and 6 oil of 2,102 barrels and 45,070 barrels, respectively. These fuels are used for start-up and flame stabilization for Montaup's steam generating unit. The cost of Nos. 2 and 6 oil averaged $22.27 per barrel and $17.19 per barrel in 1996, respectively. Montaup also maintained an average inventory of jet oil of 3,573 barrels at an average cost per barrel of $25.83 during 1996 for its two peaking units at the Somerset Station.
Montaup has a two year purchase order effective through December 1998 with a coal producer. Barge and rail agreements for coal transportation are also in place through 1998. The 1996 year-end coal inventory of approximately 82,000 tons is all 0.6% to 0.7% sulfur coal which is compliant with Clean Air Act requirements.
Canal Electric Company (Canal), on behalf of itself, Montaup and others has contracts with a supplier for up to 100% of the fuel-oil requirements of Canal Unit Nos. 1 and 2 for the period ending December 31, 1997 with an option of extending the contracts through March 31, 1998. The current contracts permit up to 35% of fuel oil purchases in the spot market. Fuel prices are based on oil market posting at the time of delivery. For 1996, the cost of oil per barrel at Canal averaged $18.67. Additionally, Canal has a contract with a gas supplier for approximately 70% of Canal 2's daily gas requirements. Canal 2 completed its gas conversion and testing in September 1996. The unit is now able to burn gas, oil, or a blend of the two fuels. Economics, generation and supply will determine actual fuel type usage.
Montaup's costs of fossil and nuclear fuels for the years 1994 through 1996, together with the weighted average cost of all fuels, are set forth below:
Mills* per kWh 1996 1995 1994
Nuclear . . . . . . . . . 5.0 6.3 6.1 Gas . . . . . . . . . 14.4 14.3 14.1 Coal . . . . . . . . . 19.6 20.3 20.9 Oil . . . . . . . . . 37.7 30.2 27.1 All fuels . . . . . . . . . 16.7 16.7 14.5
*One Mill is 1/10 of one cent
The rate schedules of Montaup and the Retail Subsidiaries are designed to pass on to customers the increases and decreases in fuel costs and the cost of purchased power, subject to review and approval by appropriate regulatory authorities (see Rates below).
OSP has two gas supply contracts which expire December 14, 2009 and September 29, 2010, respectively, for its two 250 mw generators. The cost of gas for 1996 averaged $1.20 per MBTU or approximately 10.0 mills per kWh generated.
The owners (or lead participants) of the nuclear units in which Montaup has an interest have made, or expect to make, various arrangements for the acquisition of uranium concentrate, the conversion, enrichment, fabrication and utilization of nuclear fuel and the disposition of that fuel after use. The owners (or lead participants) of United States nuclear units have entered into contracts with the DOE for disposal of spent nuclear fuel in accordance with the NWPA. The NWPA requires (subject to various contingencies) that the federal government design, license, construct and operate a permanent repository for high level radioactive wastes and spent nuclear fuel and establish a prescribed fee for the disposal of such wastes and nuclear fuel. The NWPA specifies that the DOE provide for the disposal of such waste and spent nuclear fuel starting in 1998. Objections on environmental and other grounds have been asserted against proposals for storage as well as disposal of spent nuclear fuel. The DOE now estimates that a permanent disposal site for spent fuel will not be ready to accept fuel for storage or disposal until as late as the year 2010. Montaup owns a 4.01% interest in Millstone III and a 2.9% interest in Seabrook I. Northeast Utilities, the operator of the units, indicates that Millstone III has sufficient on-site storage facilities which, with rack additions, can accommodate its spent fuel for the projected life of the unit. At the Seabrook Project, there is on-site storage capacity which, with rack additions, will be sufficient to at least the year 2011.
The Energy Policy Act of 1992 requires that a fund be created for the decommissioning and decontamination of the DOE uranium enrichment facilities. The fund will be financed in part by special assessments on nuclear power plants in which Montaup has an interest. These assessments are calculated based on the utilities' prior use of the government facilities and have been levied by the DOE, starting in September 1993, and will continue over 15 years. This cost is passed on to the joint owners or power buyers as an additional fuel charge on a monthly basis and is currently being recovered by Montaup through fuel rates and will be collected through the contract termination charge.
Nuclear Power Issues
General:
Nuclear generating facilities, including those in service in which Montaup participates, as shown in the table under Item 2. PROPERTIES -- Power Supply, are subject to extensive regulation by the NRC. The NRC is empowered to authorize the siting, construction and operation of nuclear reactors after consideration of public health, safety, environmental and anti-trust matters.
The NRC has promulgated numerous requirements affecting safety systems, fire protection, emergency response planning and notification systems, and other aspects of nuclear plant construction, equipment and operation. These requirements have caused modifications to be made at some of the nuclear units in which Montaup has an interest. Montaup has been affected, to the extent of its proportionate share, by the costs of such modifications.
Nuclear units in the United States have been subject to widespread criticism and opposition. Some nuclear projects have been cancelled following substantial construction delays and cost overruns as the result of licensing problems, unanticipated construction defects and other difficulties. Various groups have by litigation, legislation and participation in administrative proceedings sought to prohibit the completion and operation of nuclear units and the disposal of nuclear waste. In the event of cancellation or shutdown of any unit, NRC regulations require that it be decontaminated of any residual radioactivity sufficiently so that the property may be released for unrestricted use. The cost of such decommissioning, depending on the circumstances, could substantially exceed the owners' investment at the time of cancellation.
Joint owners of nuclear projects are subject to the risk that one of their number may be unable or unwilling to finance its share of the project's costs, thus jeopardizing continuation of the project. Also, the continuing public controversy concerning nuclear power could affect the operating units in which Montaup has an interest. While management cannot predict the ultimate effect of such controversy, it is possible that it could result in the premature shutdown of one or more of the units.
The Price-Anderson Act provides, among other things, that the liability for damages resulting from a nuclear incident would not exceed an amount which at present is about $8.7 billion. Under the Price-Anderson Act, prior to operation of a nuclear reactor, the licensee is required to insure against this exposure by purchasing the maximum amount of liability insurance available from private sources (currently $200 million) and to maintain the insurance available under a mandatory industry-wide retrospective rating program. Should an individual licensee's liability for an incident exceed $200 million, the difference between such liability and the overall maximum liability, currently about $8.7 billion, will be made up by the retrospective rating program. Under such a program, each owner of an operating nuclear facility may be assessed a retrospective premium of up to a limit of $79.3 million (which shall be adjusted for inflation at least every five years) for each reactor owned in the event of any one nuclear incident occurring at any reactor in the United States, with provision for payment of such assessment to be made over time as necessary to limit the payment in any one year to no more than $10 million per reactor owned. With respect to operating nuclear facilities of which it is a part owner or from which it contracts (on terms reflecting such liability) to purchase power, Montaup would be obligated to pay its proportionate share of any such assessment.
Decommissioning:
Both of the operating nuclear generating companies in which Montaup has an equity ownership interest (see Item 2. PROPERTIES -- Power Supply) have developed their estimates of the cost of decommissioning its unit and have received the approval of FERC to include charges for the estimated costs of decommissioning its unit in the cost of energy which it sells. From time to time, these companies re-estimate the cost of decommissioning and apply to FERC for increased rates in response to increased decommissioning costs. Maine Yankee has filed a decommissioning financing plan under a Maine statute which requires the establishment of a decommissioning trust fund. That statute also provides that if the trust has insufficient funds to decommission the plant, the licensee (Maine Yankee) is responsible for the deficiency and, if the licensee is unable to provide the entire amount, the "owners" of the licensee are jointly and severally responsible for the remainder. The definition of "owner" under the statute includes Montaup and may include companies affiliated with Montaup. The applicability and effect of this statute cannot be determined at this time. Montaup would seek to recover through its rates any payments that might be required (see "Yankee Atomic", and "Connecticut Yankee" below).
Montaup is recovering through rates its share of estimated decommissioning costs for Millstone III and Seabrook I. Montaup's share of the current estimate of total costs to decommission Millstone III is $18.6 million in 1996 dollars, and Seabrook I is $13.1 million in 1996 dollars. These figures are based on studies performed for the lead owners of the plants. In addition, pursuant to contractual arrangements with other nuclear generating facilities in which Montaup has an equity ownership interest or life of the unit entitlement, Montaup pays into decommissioning reserves. Such expenses are currently recoverable through rates.
Yankee Atomic:
On February 26, 1992, Yankee Atomic announced that it would permanently cease power operation of Yankee Rowe and began preparing for an orderly decommissioning of the facility. Montaup has a 4.5% equity ownership in Yankee Atomic with a book value of approximately $1.1 million at December 31, 1996. Under the terms of its purchased power contract with the facility, Montaup must pay its proportionate share of unrecovered costs and expenses incurred after the plant is retired. In December 1992, Yankee Atomic received FERC authorization to recover essentially all unrecovered assets and all costs incurred after the February 26, 1992 shutdown decision until the plant is decommissioned. Montaup's share of all unrecovered assets and the total estimated costs to decommission the unit aggregated approximately $7.8 million at December 31, 1996.
Connecticut Yankee:
Connecticut Yankee, a 582-mw nuclear unit, was taken off-line in July 1996 because of issues related to certain containment air recirculation and service water systems. Montaup has a 4.5% equity ownership in Connecticut Yankee with a book value of $4.8 million at December 31, 1996.
In October 1996, Montaup, as one of the joint owners, participated in an economic evaluation of Connecticut Yankee which recommended permanently closing the unit and replacing its output with less expensive energy sources. As a result of the analysis, work at the plant had slowed pending a final board decision. In December 1996, the Board of Directors voted to retire the generating station. Connecticut Yankee certified to the NRC that it had permanently closed power generation operations and removed fuel from the reactor. Connecticut Yankee has two years to submit its decommissioning plan to the NRC. The preliminary estimate of the sum of future payments for the permanent shutdown, decommissioning, and recovery of the remaining investment in Connecticut Yankee, is approximately $758 million. Montaup's share of the total estimated costs is $34.1 million.
Recent NRC Actions:
Millstone III
Montaup has a 4.01% ownership interest in Millstone III, an 1154-mw nuclear unit that is jointly owned by a number of New England utilities, including subsidiaries of Northeast Utilities (Northeast). Northeast is the lead participant in Millstone III, and on March 30, 1996, Northeast determined it was necessary to shut down the unit following an engineering evaluation which determined that four safety-related valves would not be able to perform their design function during certain postulated events.
The NRC has raised numerous issues with respect to Millstone III and certain of the other nuclear units in which Northeast and its subsidiaries, either individually or collectively, have the largest ownership shares, including Connecticut Yankee (see "Connecticut Yankee" above).
In July 1996 Northeast reported that it has been responding to a series of requests from the NRC seeking assurance that the Millstone III unit will be operated in accordance with the terms of its operating license and other NRC requirements and regulations and dealing with a series of issues that Northeast has identified in the course of these reviews. Providing these assurances and addressing these issues will be components of an Operational Readiness Plan (ORP) to be developed for the Millstone III unit. The ORP for Millstone III was submitted to the NRC on July 2, 1996 and is presently being implemented.
On October 18 1996, the NRC informed Northeast that it will establish a Special Projects Office to oversee inspection and licensing activities at Millstone. The Special Projects Office will be responsible for (1) licensing and inspection activities at Northeast's Connecticut plants, (2) oversight of an independent corrective action verification program; (3) oversight of Northeast's corrective actions related to safety issues involving employee concerns, and (4) inspections necessary to implement NRC oversight of the plants' restart activities.
On October 24, 1996 the NRC issued another order directing that prior to restart of Millstone III, Northeast submit a plan for disposition of safety issues raised by employees and retain an independent third-party to oversee implementation of this plan. This third-party oversight will continue until the situation is corrected. There is no estimate of how long this will take.
Northeast Management has indicated it cannot presently estimate the effect these efforts will have on the timing of restarts or what additional costs, if any, these developments may cause.
While Millstone III is out of service, Montaup will incur incremental replacement power costs estimated at $0.4 million to $0.8 million per month. Montaup bills its replacement power costs through its fuel adjustment clause, a wholesale tariff jurisdictional to the FERC. However, there is no comparable clause in Montaup's FERC-approved rates which at this time would permit Montaup to recover its share of the incremental operation and maintenance costs incurred by Northeast.
EUA cannot predict the ultimate outcome of the NRC inquiries or the impact which they may have on Montaup and the EUA system. Montaup is also evaluating its rights and obligations under the various agreements relating to the ownership and operation of Millstone III.
Maine Yankee
On June 7, 1996, the NRC commissioned an independent Safety Assessment Team to assess the conformance of the Maine Yankee Atomic Power Station to its design and licensing basis. Montaup holds a 4.0% ownership interest in the Maine Yankee Unit.
On October 7, 1996, the NRC released an Independent Safety Assessment (ISA) report. In evaluating the Plant's conformance to its licensing basis, the report concluded that Maine Yankee was in general conformance with its licensing basis although significant items of nonconformance were identified stemming from two closely related root causes: (1) economic pressure to be a low-cost energy provider had limited available resources to address corrective actions and some improvements and (2) a questioning culture was lacking, which had resulted in a failure to identify or promptly correct significant problems in areas perceived by Maine Yankee to be of low safety significance.
A letter to Maine Yankee from the Chair of the NRC, accompanying the ISA report directed Maine Yankee to provide to the NRC its plans for addressing the root causes of the deficiencies identified by the ISA.
In December, 1996 the unit was shut down for inspections and repairs to resolve cable-separation and associated issues. While the plant has been out of service, Maine Yankee, having previously detected indications of minor leakage in a small number of the plant's 38,000 fuel rods, used the opportunity to inspect the Plant's 217 fuel assemblies. As a result of the inspection, Maine Yankee determined that several fuel assemblies that contained leaking rods should be replaced and has commenced that process. On January 29, 1997 the NRC announced that it had placed the unit on its "watch list." The operator expects the Plant to remain out of service until the fuel-assembly replacement and a thorough inspection of the Plant's electrical cabling are completed and associated issues resolved, and restarting the Plant is approved by the NRC. The operator cannot now predict how long it will take to complete those processes.
In February 1997, Maine Yankee and Entergy Nuclear, Inc. signed a contract for Entergy to provide management services including plant operations at the Maine Yankee plant through September 1997. Maine Yankee and Entergy have been discussing the possibilities of a longer term contract.
General
Recent actions by the NRC, some of which are cited above, indicate that the NRC has become more critical and active in its oversight of nuclear power plants.
EUA is unable to predict at this time, what, if any, ramifications these NRC actions will have on any of the other nuclear power plants in which Montaup has an ownership interest or power contract.
Public Utility Regulation
Eastern Edison and Montaup are subject to regulation by the MDPU with respect to the issuance of securities, the form of accounts, and in the case of Eastern Edison, rates to be charged, services to be provided, and other matters. Blackstone and Newport are subject to regulation in numerous respects by the RIPUC and the RIDPUC, including matters pertaining to financing, sales and transfers of utility properties, accounting, rates and service. In addition, by reason of its ownership of fractional interests in certain facilities located in other states, Montaup is subject to limited regulation in those states. See Electric Utility Industry Restructuring.
IPPs, including OSP in which EUA Ocean State has a 29.9% ownership interest, do not benefit from the PURPA exemptions and are subject to FERC regulation under the Federal Power Act as well as various other federal, state and local regulations.
The EUA System is subject to the jurisdiction of the SEC under the 1935 Act by virtue of which the SEC has certain powers of regulation, including jurisdiction over the issuance of securities, changes in the terms of outstanding securities, acquisition or sale of securities or utility assets or other interests in any business, intercompany loans and other intercompany transactions, payment of dividends under certain circumstances, and related matters. Eastern Edison is a holding company under the 1935 Act by reason of its ownership of securities of Montaup. As a subsidiary of EUA, a registered holding Company, Eastern Edison is exempted from registering as a holding company by complying with the applicable rules thereunder.
The Retail Subsidiaries and Montaup are also subject to the jurisdiction of FERC under Parts II and III of the Federal Power Act. That jurisdiction includes, among other things, rates for sales for resale, interconnection of certain facilities, accounts, service, and property records.
The MDPU and RIPUC have approved a Memorandum of Understanding (MOU) between Eastern Edison, Blackstone, Newport and Montaup. The MOU establishes a framework for a coordinated, regional review of the resource planning and procurement process of those companies. It is based on the assumption that resource planning and procurement by a regional electric company may be implemented more effectively under a coordinated, consensual review process involving the EUA retail companies and the state public utility commissions to which the EUA retail companies are subject. Pursuant to the terms of the MOU, at least every two years Montaup and Eastern Edison will file with the MDPU and Blackstone and Newport will file with the RIPUC an integrated resource plan concurrently. The MOU outlines a mechanism and a timetable by which the reviews by the two commissions will be coordinated and any inconsistencies among the decisions by the state commissions will be resolved.
In conjunction with its approval of the MOU, the MDPU granted Eastern Edison and Montaup an exemption from the MDPU's Integrated Resource Management regulations, but required them to plan, solicit and procure additional resources according to newly promulgated regional Integrated Regional Planning procedures consistent with the MOU. The Integrated Resource Management Plan of Blackstone and Newport meet the criteria of the RIPUC.
Implementation of the MOU is not expected to have a material effect on the EUA System. The move to restructure the industry to a more competitive model may, however, impact the role of the states in reviewing utilities' resource planning and procurement activities. Massachusetts is currently reviewing the need for its review of load forecasting and resource planning, recognizing that resource procurement is now a competitive function. As competition becomes more prevalent in the electric industry, it is anticipated that regulatory review will decrease accordingly.
See Rates with respect to regulation of rates charged to customers. See Environmental Regulation. See Fuel for Generation with respect to the disposal of spent nuclear fuel. See Environmental Regulation of Nuclear Power and see Nuclear Power Issues with respect to regulation of nuclear facilities by the NRC. See also Electric Utility Industry Restructuring.
Rates
Rates charged by Montaup (which sells power only for resale) are subject to the jurisdiction of FERC. The rates for services rendered by the Retail Subsidiaries for the most part are subject to approval by and are on file with the MDPU in the case of Eastern Edison and with the RIPUC in the case of Blackstone and Newport. For the 12 months ended December 31, 1996, 62% of EUA's consolidated revenues were subject to the jurisdiction of FERC, 15% to that of the MDPU and 12% to that of the RIPUC. The remaining 11% of consolidated revenues are not subject to jurisdiction of utility commissions. For the twelve months ended December 31, 1996, 80.6% of Eastern Edison's consolidated revenues were subject to the jurisdiction of the FERC and 19.4% to MDPU. Additionally, rates charged by OSP are subject to the jurisdiction of FERC. All OSP (Unit 1 and Unit 2) power contracts have been approved by FERC. However, pursuant to the OSP unit power agreements, rate supplements are required to be filed annually subject to FERC approval. This process may result in rate increases or decreases to OSP power purchasers.
Recent general rate increases (reduction) for Montaup and the Retail Subsidiaries are as follows (In Thousands):
FERC Proceedings:
On May 21, 1994 Montaup filed a rate application with FERC to reduce annual revenues by $10.1 million. This request was intended to match more closely Montaup's revenues with its decreasing cost of doing business resulting from, among other things, a reduced rate base, lower capital costs and successful cost control efforts. The application also included a request for recovery of all of Montaup's FAS106 expenses as provided in FERC's generic order of December 1992, including a five-year amortization of previously deferred FAS106 costs. Also incorporated in this filing was a request to make Newport an all requirements customer of Montaup. Settlement agreements were certified by FERC with all intervenors with an annual base rate reduction of approximately $14 million annually, (inclusive of the filed $10.1 million reduction) effective as of August 1994.
On February 20, 1996, Montaup filed an application with FERC for network and point-to-point transmission service tariffs. FERC required this tariff application before granting a concurrent application of Duke/Louis Dreyfus Energy Services (New England) L.L.C. for permission to charge market based rates.
On July 9, 1996 Montaup refiled the application to conform with FERC open access terms and conditions. On January 21, 1997 the application was refiled to conform with the NEPOOL open access tariff. FERC has not yet acted upon the filings.
Massachusetts Proceedings:
The MDPU has put all companies on notice that it expects them..."to consider mergers or acquisitions in order to further optimize least-cost planning efforts and better fulfill their obligations to serve." Thereafter, the MDPU instituted an investigation, which was concluded on August 3, 1994, for the purpose of establishing, among other things, guidelines and standards for acquisitions and mergers of utilities and evaluating proposals regarding the recovery of costs associated with such activities. It is not possible to predict what effects, if any, the MDPU proceeding will have on the EUA System.
In December 1994, the MDPU approved a request made by Eastern Edison to recover through a reconciling adjustment factor a portion of "lost base revenues." Lost base revenue represents amounts the company would have collected if it had not offered demand-side management and conservation and load management programs to its customers.
On September 20, 1994, the MDPU issued a notice of inquiry and order seeking comments on incentive regulation (MDPU 94-58). The inquiry was to focus on incentive regulation, sometimes referred to as performanced-based regulation, to replace in whole or in part its existing cost-of-service/rate- of-return regulatory framework. Comments were filed by Eastern Edison and other interested persons. On February 24, 1995, the MDPU issued an order relating to implementation of incentive regulation. In the order, the MDPU strongly encouraged all jurisdictional electric utilities to devise and propose incentive plans. The objective of incentive regulation is to "provide market- place benefits to consumers through (1) more efficient utility operations, (2) stronger utility incentives for better cost control, and (3) enhanced opportunities for lower rates." While no timetable was specified, the MDPU stated the largest utilities should commence the incentive plan design process as soon as possible. EUA cannot predict what effect, if any, the MDPU's order will have on the EUA System. However, Eastern Edison's December 23, 1996 settlement agreement with Massachusetts Department of Energy Resources and that State's Attorney General, expected to be formally submitted to the MDPU in March 1997, contains performance based regulation standards. (See Electric Utility Industry Restructuring under "Massachusetts Restructuring Settlement" above).
On February 10, 1995, the MDPU issued a notice of inquiry and order on electric industry restructuring (MDPU 95-30). The investigation was established to determine: (1) how a restructuring of the Massachusetts electric industry would promote competition and economic efficiency while expanding opportunities that would benefit consumers, (2) whether and how to extend to customers the option of choosing their own electric suppliers; (3) how such a restructuring could be implemented; and (4) the appropriate regulatory mechanisms to apply to a restructured electric industry.
After initial and second round comments were received, the MDPU held hearings and issued its order on August 16, 1995. The order facilitates increased competition by requiring investor-owned electric utilities to unbundle their rates, provide consumers with accurate price signals, and enable customer choice that allows consumers to purchase generation services separately from transmission and distribution services. The order provides for the recovery of net, non-mitigatable stranded costs that will result from the transition from a regulated to a competitive industry structure.
The order sets forth the MDPU's overall goals for a restructured industry, the essential characteristics of a restructured industry, as well as principles to be considered in the transition to a restructured industry. Given the complexity of the issues, the MDPU supported the multiple requests from reviewers for a period during which participants can negotiate settlements. The MDPU stated that consensus and settlements are more likely than litigation to advance the restructuring process, and directed each company to undertake negotiations with all interested participants to develop a plan for moving toward competition in generation and retail customer choice, to decide the amount and develop a mechanism for stranded cost recovery, and establish unbundled rates. A collaborative group representing the full spectrum of MDPU 95-30 participants has been meeting in Massachusetts to discuss these issues. The MDPU noted that while the concepts of competition and customer choice are fundamental to restructuring, and the basic principles will apply to all restructuring proposals, specific company corporate structures, service territories, rate structures and stranded costs may require individual consideration.
The MDPU established a specific schedule for restructuring proposals. Massachusetts Electric Company, Boston Edison Company, and Western Massachusetts Electric Company were required to file their settlements and proposals by February 16, 1996. The remaining electric utilities are required to file their settlements and proposals within three months of the issuance of MDPU orders related to the restructuring proposals of the former three companies. Companies are required to file the following information: (1) a plan for moving from the current regulated industry structure to a competitive generation market and to increased customer choice; (2) illustrative rates and supporting information that indicate unbundled charges for generation, distribution, transmission, and ancillary services; (3) an identifiable charge reflective of the level of stranded costs to be recovered with all necessary supporting information; and (4) a plan for incentive regulation in the transmission and distribution systems. Eastern Edison filed its restructuring plan on February 16, 1996 which was assigned MDPU Docket No. 96-24. A public hearing was held on March 6, 1996. See Electric Utility Industry Restructuring under "Massachusetts Restructuring Settlement" for a discussion of the December 23, 1996 settlement among Eastern Edison, Montaup, Massachusetts Department of Energy Resources and the Massachusetts Attorney General. A formal settlement plan under Docket No. 96-24 is expected to be filed with the MDPU in March 1997.
On December 30, 1996 the MDPU issued its Model Rules in Docket # 96-100, the second phase of its investigation of the restructuring of the electric utility industry in Massachusetts and proposed legislation for consideration by the Massachusetts Legislature that would provide the MDPU with the mandate to implement these rules. The MDPU has indicated that its overall goal is to develop an efficient industry structure and regulatory framework that minimizes costs to consumers while maintaining safe and reliable electric service with minimum impact on the environment. Consistent with the overall goal, the Model Rules provide for, among other things:
- customer choice of electricity supplier with local distribution companies guaranteeing default service including continuation of low income protections and discounts;
- independent central regional transmission system operator;
- non-discriminatory open access transmission;
- functional separation of distribution, generation and transmission;
- distribution services remain a regulated monopoly;
- commitment to significant environmental improvement;
- funding mechanism to provide financial support for renewable and emerging technologies and continuation of demand-side management programs;
- reasonable opportunity for recovery of stranded costs; and
- standards of conduct for distribution companies and their competitive affiliates.
While Eastern Edison believes that its December 23, 1996 agreement with the Attorney General and the Division of Energy Resources is consistent with the requirements of these Model Rules, it is of the opinion that the MDPU has the authority to approve the agreement without the need of additional legislation or officially promulgating these Model Rules. See Electric Utility Industry Restructuring, under "Massachusetts Restructuring Settlement," with respect to settlement negotiations.
Rhode Island Proceedings:
On April 7, 1992, the RIPUC initiated generic Docket No. 2045 pertaining to the FAS106 issue for all Rhode Island utility companies. On June 26, 1992, Newport and Blackstone filed proposed rate increases to reflect the impact of FAS106 of approximately $1.3 million and $2.7 million, respectively. An order was issued on December 11, 1992 granting recovery of a tax deductible amount of FAS106 phased into rates over a three-year period with the initial one-third to be recovered no earlier than the first fiscal year beginning after December 15, 1992, and the deferrals of the first two years recovered in rates over the seven-year period following the three-year phase-in. On December 21, 1992, Newport and Blackstone filed compliance rates representing phase one of the three-year phase-in. The Phase I revenue requirement, representing one third of the incremental FAS106 tax deductible amount for Blackstone and Newport was calculated to be $353,000 and $417,000, respectively. Phase II compliance was filed November 1, 1993. The revenue requirement, representing two thirds of the incremental FAS106 tax deductible expense for Blackstone and Newport was calculated to be $706,000 and $834,000, respectively. Phase III compliance was filed November 1, 1994. The revenue requirement, representing the full phase- in of the incremental FAS106 tax deductible expense for Blackstone and Newport were calculated to be $1,059,000 and $1,251,000, respectively. Phase IV compliance was filed on October 23, 1995, recovering deferred amounts over 7 years, 14.3% each year starting January 1, 1996. The RIPUC also ordered that all amounts recovered be placed in trusts permitted by the IRS which will maximize tax deductibility.
Also, on January 14, 1994, the RIPUC issued a written order establishing Docket No. 2167 for a Comprehensive Review of Newport's rate design. A prehearing conference was held on February 8, 1994 at which time a schedule for pre-filing testimony was established.
On May 20, 1994, Newport filed its Cost of Service Study (COSS) analysis of the rates of return by customer class and an alternative rate design proposal. The RIDPUC filed its recommendations with regard to cost allocation and rate design on June 23, 1994. The United States Navy, Newport's largest customer, filed its recommendations on June 24, 1994. On July 29, 1994 the Company filed a Stipulation and Settlement Agreement (SSA) which had been executed by the RIDPUC and TEC-RI. The parties signing the SSA agreed on certain rate class revenue changes. While the settling parties did not agree with the COSS techniques utilized by Newport, they agreed to accept the SSA rather than litigating with respect to what might be deemed appropriate study allocators and techniques. The rate class revenue changes generally reduce, although they do not eliminate, inequities in the class rate of return. Newport agreed to perform a new COSS to be submitted no later than July 1, 1996. At an open meeting on October 28, 1994, the RIPUC found that the SSA is reasonable and in the best interests of the ratepayers. Rates established in compliance with the RIPUC's October 28, 1994 finding, were effective January 1, 1995.
In December 1994, the United States Navy, filed a petition for a writ of certiorari with the Rhode Island Supreme Court to review the RIPUC's decision. A second motion to stay was filed by the Navy on December 21, 1995. On June 28, 1996 Newport filed its 1995 COSS and on July 8, 1996 the U.S. Navy filed a Motion for Expedited Hearing. The RIDPUC took the position that the RIPUC's order in Docket No. 2167 neither required nor set any timetable for additional rate changes. The RIDPUC also indicated that it took no position regarding either the merits of the COSS or the Navy's request for an expedited hearing. The RIDPUC, at the RIPUC's request reviewed the results of the COSS as well as the allocation methodologies employed. Additionally, the RIDPUC explored the propriety of the Navy's request in light of the filing of unbundled rates required to be made effective by the Restructuring Act of 1996. On February 3, 1997 the Navy filed a stipulation to withdraw the writ of certiori it had filed in December 1994.
On June 27, 1994 TEC-RI petitioned the RIDPUC to investigate the propriety of "the current bundled electric rates," and what might be required to transition "... from a fully regulated to a more competitive retail electric industry". A RIDPUC hearing officer was appointed on July 24, 1994 and Docket No. D-94-9 was established. Blackstone and Newport were parties to the proceeding.
Initial and reply comments were submitted to a comprehensive list of issues. Many of the comments addressed a broad restructuring of the electric utility industry. When the parties met on January 9, 1995, they decided that TEC-RI's proposal for a "cooperative collaborative process," including the RIDPUC as a party, rather than a litigated proceeding before the RIDPUC hearing officer, was appropriate. Hence, the Rhode Island Collaborative (Collaborative) was formed.
On May 12, 1995, the Collaborative submitted a Report and Set of Interdependent Principles to the RIPUC. The 17 Interdependent Principles represented the Collaborative's underpinnings for any restructuring proposal. The Collaborative requested that the RIPUC establish a docket and conduct a hearing to explore the settlement principles with a view to issuing an order indicating whether the principles "provide a suitable basis for further detailed negotiation by the parties, or in what respects they require modification" and setting a deadline for the submission of a more detailed proposal for restructuring.
The RIPUC responded to the Collaborative's request by creating Docket No. 2320, taking administrative notice of Docket No. D-94-9, and declaring that all parties to the Division docket would be treated as intervenors in this docket. The RIPUC conducted a technical conference on July 6, 1995 and a Public hearing on July 11, 1995. On July 19, 1995 three of the principles were modified to address concerns expressed by the RIPUC at the technical conference. On July 25, 1995, the Collaborative provided additional information on the principle concerning renewables, and requested that the RIPUC approve the principles in full.
On August 16, 1995, the RIPUC accepted the principles as modified, deleting the principle concerning renewables and adding a principle concerning negotiation. The Collaborative was directed to proceed with negotiations to quantify specific issues involving competition and open access as well as the other issues presented in the principles. A Collaborative Progress Report was filed in February, 1996. Blackstone and Newport have been active participants in the ongoing collaborative meetings. As a result of legislative actions and the passing of the URA, Docket No. 2320 was formally closed and the collaborative was disbanded.
In February 1997 the RIPUC initiated Docket No. 2509 to investigate utility company storm contingency funds. Both Blackstone and Newport are recovering through rates amounts for storm contingencies. A hearing was held on February 28, 1997. Management cannot predict the ultimate outcome of this investigation.
The RIPUC opened Docket No. 2514 to investigate the restructuring plan filed by Blackstone and Newport on December 27, 1996 in compliance with the URA. Hearings are scheduled to be held during April 1997. On February 28, 1997, Blackstone, Newport and Montaup reached settlement with the RIDPUC and the Rhode Island Attorney General with regard to implementation of a restructuring plan for Blackstone, Newport and Montaup. In addition to complying with the URA, the settlement provides for an immediate 10% rate reduction and a commitment by Montaup to file a plan by July 1, 1997 to divest all of its generating assets. Management cannot predict the ultimate outcome of this investigation. See Electric utility Industry Restructuring under "Rhode Island Utility Restructuring Act of 1996" for a discussion of the URA and settlement agreement.
Environmental Regulation
General:
The Retail Subsidiaries and Montaup and other companies owning generating units from which power is obtained are subject, like other electric utilities, to environmental and land use regulations at the federal, state and local levels. The EPA, and certain state and local authorities, have jurisdiction over releases of pollutants, contaminants and hazardous substances into the environment and have broad authority in connection therewith, including the ability to require installation of pollution control devices and remedial actions. In 1994, an environmental audit program designed to ensure compliance with environmental laws and regulations and to identify and reduce liability was instituted for Montaup and the Retail Subsidiaries.
Federal, Massachusetts and Rhode Island legislation requires consideration of reports evaluating environmental impact of large projects as a prerequisite to the granting of various permits and licenses with a view of limiting such impact. Federal, Massachusetts and Rhode Island air quality regulations also require that plans for construction or modification of fossil fuel generating facilities (including procedures for operation and maintenance) receive prior approval from the MADEP or RIDEM. In addition, in Massachusetts, certain electric generation and transmission facilities will be permitted to be built only if they are consistent with a long-range forecast filed by the utility concerned and approved by the Massachusetts Energy Facilities Siting Council. In Rhode Island, siting, construction and modification of major electric generating and transmission facilities must be approved by the Rhode Island Energy Facility Siting Board.
Generating facilities in which Montaup and Newport have an interest, and are required to pay a share of the costs, are also subject, like other electric utilities, to regulation with regard to zoning, land use, and similar controls by various state and local authorities.
The EPA and state and local authorities may, after appropriate proceedings, require modification of generating facilities for which construction permits or operating licenses have already been issued, or impose new conditions on such permits or licenses, and may require that the operation of a generating unit cease or that its level of operation be temporarily or permanently reduced. Such action may result in increases in capital costs and operating costs which may be substantial, in delays or cancellation of construction of planned facilities, or in modification or termination of operations of existing facilities.
Other activities of the EUA System from time to time are subject to the jurisdiction of various other local, state and federal regulatory agencies. It is not possible to predict with certainty what effects the above described statutes and regulations will have on the EUA System.
The EPA has issued regulations relating to the generation, transportation, storage and disposal of certain wastes under RCRA; in Massachusetts, the requirements are implemented and enforced by the MADEP, whereas in Rhode Island, RIDEM implements and enforces its own regulations under a state statute comparable to RCRA as well as pursuant to EPA authorization.
There is an extensive body of federal and state statutes governing environmental matters, including CERCLA, as amended by the Superfund Amendments and Reauthorization Act of 1986; in Massachusetts, Chapter 21E, and, in Rhode Island, the "Industrial Property Site Remediation and Reuse Act" (Brownfields Legislation) which permit, among other things, federal and state authorities to initiate legal action providing for liability, compensation, cleanup, and emergency response to the release or threatened release of hazardous substances into the environment and for the cleanup of inactive hazardous waste disposal sites which constitute substantial hazards. Under CERCLA, Chapter 21E, and the Rhode Island Brownfields Legislation, joint and several liability for cleanup costs may be imposed on, among others, the owners or operators of a facility where hazardous substances were disposed, the party who generated the substances, or any party who arranged for the disposition or transport of the substances. Due to the nature of the business of EUA's utility subsidiaries, certain materials are generated that may be classified as hazardous under CERCLA, Chapter 21E and Brownfields Legislation. As a rule, the subsidiaries employ licensed contractors to dispose of such materials. See Item 3.
Item 3. LEGAL PROCEEDINGS
Rate Proceeding
See descriptions of proceedings under Item 1, BUSINESS -- Rates. Environmental Proceedings
1. In March 1985, Blackstone was notified by the DEQE, which is now the MADEP, that it had been identified, along with other parties, as a potentially responsible party under Massachusetts law for a condition of soil and ground water contamination in Lowell, Massachusetts. The site in question was occupied by a scrap metal reclamation facility which received transformers and other electrical equipment from utility companies and others from the early 1960s until 1984. Among the contaminants apparently released at the site were PCBs. The potentially responsible parties (PRPs), including Blackstone, performed site studies and proposed a remedial action plan, which was approved by the DEQE several years ago. Since that time, the PRPs have negotiated over access, taxes and similar issues with the site owner and other parties. The remedial option selected but not yet completed is a process of solidification; however, a risk assessment that may now be required could lead the PRPs to choose capping as the remedial option. The cost of implementing either remedy could vary from $250,000 for capping to $600,000 for solidification. Blackstone is alleged to be the fifth ranked generator out of approximately twenty potentially responsible parties. However, Blackstone's estimated 2% share allocation is considerably less than the shares of the four largest contributors at the site. As a result, Blackstone expects to be offered a de minimis party buyout settlement from the major members of the site PRPs.
2. On July 14, 1987, the Commonwealth of Massachusetts (the Commonwealth) on behalf of the MADEP filed a cost recovery action pursuant to CERCLA and Mass. Gen. Laws Chapter 21E against Blackstone in the United States District Court for the District of Massachusetts (District Court). The Complaint seeks $2.2 million in costs incurred by MADEP in the cleanup of an alleged coal gasification waste site at Mendon Road in Attleboro, Massachusetts. In October 1987, without admitting liability, Blackstone entered into an administrative Consent Order with MADEP regarding the Mendon Road site and another alleged coal gasification site discovered by the MADEP approximately 1/4 mile away known as the Lawn/Knoll site in Attleboro. Blackstone agreed to perform preliminary assessments at both sites in order to determine what remediation, if any, was necessary at the site. In 1988, Blackstone submitted Phase II testing results for the Lawn/Knoll site to the MADEP for review and approval. On April 24, 1996, MADEP ordered Blackstone to conduct additional site assessment work at the Lawn Street site. Blackstone retained the services of Atlantic Environmental Services to conduct the site assessment pursuant to the Massachusetts Contingency Plan and on August 15, 1996 Blackstone signed an amended Administrative Consent Order Tier IB permit. It is expected that Atlantic will begin the site assessment work in the Spring of 1997. On May 26, 1993, the MADEP requested Blackstone to submit additional Phase I testing for the Mendon Road site which was completed and sent to the MADEP on December 20, 1993. Meanwhile, Blackstone has contested the MADEP's cost recovery action, arguing, inter alia, that the waste removed from the Mendon Road site, ferric ferrocyanide (FFC), was not "hazardous" within the meaning of CERCLA or Mass. Gen. Laws Chapter 21E and the MADEP's cleanup actions were inconsistent with the National Contingency Plan (NCP). On November 25, 1991, the District Court held that the waste was "hazardous" within the meaning of both statutes and on December 20, 1992, the District Court held Blackstone and a co- defendant, the Courtois Sand & Gravel Co. (Courtois) liable for an undetermined amount of cleanup costs. The District Court remanded the case to the MADEP to supplement the administrative record with Blackstone's oral and written comments concerning the cleanup. On March 19, 1993, Blackstone made an oral presentation to the MADEP and on April 19, 1993, Blackstone submitted written comments. On December 13, 1994, the District Court issued a judgment against Blackstone finding Blackstone liable to the Commonwealth for the full amount of response costs incurred by the Commonwealth in the cleanup of the Mendon Road site. The judgment also found Blackstone liable for interest and litigation expenses calculated to the date of judgment. The total liability at December 31, 1994 was approximately $5.9 million, including approximately $3.6 million in interest which has accumulated since 1985.
On January 20, 1995, Blackstone entered into an escrow agreement with the Commonwealth whereby Blackstone deposited $5.9 million with an escrow agent who transferred the funds into an interest bearing money market account. The distribution of the proceeds of the escrow account will be determined upon the final resolution of the judgment. No additional interest expense will accrue on the judgment amount.
Blackstone filed a Notice of Appeal of the District Court's judgment and filed its brief with the United States Court of Appeals for the First Circuit (Circuit Court) on February 24, 1995. On October 6, 1995, the Circuit Court vacated the District Court's $5.9 million judgement. Rather than remand the case to the District Court for a trial on the issue of whether ferric ferrocyanide (FFC) is a hazardous substance, the Circuit Court exercised its primary jurisdictional powers to send the matter to the EPA for an administrative determination on the issue. If the EPA determines that FFC is not a hazardous substance, given the present posture of the case, Blackstone may not be liable to reimburse the Commonwealth for the Mendon Road cleanup costs. On January 9, 1997, Blackstone met with representatives of EPA and the Commonwealth to discuss the procedure EPA would follow in resolving the FFC issue. In January 1997, Blackstone submitted written comments to be followed by the Commonwealth's written reply. EPA will then determine whether FFC is hazardous substance. Further court proceedings are likely.
On January 28, 1994, Blackstone filed a Complaint in the Massachusetts District Court seeking, among other relief, contribution and reimbursement from Stone & Webster Inc., of New York City and several of its affiliated companies (Stone & Webster), and Valley Gas Company of Cumberland, Rhode Island (Valley) for any damages incurred by Blackstone regarding the Mendon Road site. Blackstone's Complaint also seeks a declaratory judgment that Stone & Webster and Valley owned and/or operated a coal gasification plant on Tidewater Street in Pawtucket (the Tidewater Plant) where the coal gasification waste allegedly was generated, and that they individually or collectively arranged for the disposal of such waste at Mendon Road. The District Court has denied motions to dismiss the complaint filed by Stone & Webster and Valley in 1994. This proceeding was stayed in December 1995 pending final EPA determination as to whether FFC is a hazardous substance. On March 22, 1996, Blackstone and Valley filed a Complaint in the Rhode Island District Court seeking contribution from Stone & Webster for the cleanup of the Tidewater site mentioned below.
Blackstone has notified certain liability insurers and has filed claims with respect to the Mendon Road site. Blackstone is actively pursuing coverage from other carriers for the Mendon Road, Tidewater, Lawn/Knoll, Cumberland, and Woonsocket Sites.
3. On October 28, 1986, RIDEM notified Blackstone that there may have been a release of hazardous material at the Tidewater Plant site in Pawtucket, Rhode Island. The site was placed on EPA's CERCLA list in 1987. The site includes the Tidewater Plant owned by Valley Gas Company (approximately 10 acres), the No. 1 Station owned by Blackstone (approximately 10 acres), and land formerly owned by Blackstone that was sold in 1968 to the City of Pawtucket (approximately 10 acres). RIDEM told Blackstone that the site contained hazardous wastes and petroleum-contaminated soils due to tanks formerly located at the site. In December, 1990, after obtaining approval from RIDEM, Blackstone removed approximately 1,000 tons of soil from the site. On September 3, 1991, RIDEM initiated a site investigation which constitutes the second step in a site screening and assessment process established by the EPA to determine whether the site should be listed as a Superfund site. On February 3, 1993, RIDEM notified Blackstone that it required further assessment and evaluation of site conditions to determine if the site qualifies for review pursuant to the Hazardous Ranking System. On September 12, 1995, RIDEM notified Blackstone and Valley of their responsibility regarding the release of hazardous substances at the Tidewater Plant site. RIDEM ordered Blackstone and Valley to conduct an environmental study of the Tidewater Plant site and adjoining lots. On the adjacent lots are the Francis J. Varieur Elementary School and the Max Read Field athletic facility and ball fields. Blackstone and Valley have entered into an agreement to share the expenses of conducting the study and/or retaining an environmental consulting firm to conduct a Remedial Investigation. A work plan was submitted to RIDEM in April 1996 and it was approved on June 14, 1996. Field work was completed in September 1996. RIDEM is currently reviewing the draft Remedial Investigation Report. It is expected that RIDEM will order further investigation and remedial clean up.
On September 12, 1995, RIDEM demanded payment of $296,000 which represents the amount of money plus interest RIDEM expended to clean up oxide box waste at the Cumberland, Rhode Island site. Following extended discussions and negotiations with legal counsel on behalf of RIDEM, Blackstone was able to reach an agreement with RIDEM to escrow approximately $296,000 in an interest- bearing account pending the outcome of EPA's remand proceedings to determine whether FFC is a hazardous substance. This money has been placed in an interest-bearing escrow account by Blackstone pending the outcome of EPA's proceedings. If Blackstone convinces EPA that FFC is not a hazardous substance, Blackstone will be able to recover the escrowed funds on the basis that RIDEM's clean up of the site in 1986 was not required by law. If EPA determines that FFC is a hazardous substance, Blackstone will pursue its legal remedies in district court in Massachusetts to convince the court that FFC is not a hazardous substance.
On January 10, 1997, Blackstone, Valley, and a representative of RIDEM met at Valley's Woonsocket property, which is the site of a former manufactured gas plant owned by Blackstone's and Valley's predecessor, Blackstone Valley Gas & Electric company and its predecessor, the Woonsocket Gas Company. It is anticipated the RIDEM will order Blackstone and Valley to conduct a site assessment of the site in 1997.
4. Montaup and EUA Service received a Notice of Responsibility on July 27, 1987, from the MADEP for suspected hazardous material at a site owned by Montaup on Hortonville Road in Swansea, Massachusetts. Montaup has completed investigative and remedial actions in accordance with new Massachusetts Contingency Plan regulations. The total cost of the cleanup was less than $150,000.
5. During March-April 1990, Eastern Edison conducted a limited environmental investigation (Phase I study) of a portion of its Dupont Substation in Brockton, Massachusetts. During the investigation, Eastern Edison notified the MADEP that it had encountered oils and PCBs. On May 3, 1990, the MADEP notified Eastern Edison of its liability for releases of oil and/or hazardous materials at the site, and requested a copy of the Phase I study. Following its review of the Phase I study on January 23, 1991, the MADEP issued a Notice of Responsibility to Eastern Edison requiring a Phase II - - - Comprehensive Site Investigation. A scope of work for the Phase II study was submitted on April 12, 1991. In August 1994 a transition statement issued by MADEP reclassifying the site from a Tier IA site to a Tier IB site was signed by Eastern Edison and submitted to MADEP. That reclassification enabled the site to be investigated and cleaned up under the guidance of a licensed site professional without MADEP approval for each action taken. Cleanup activities were completed in 1996 in accordance with DEP regulations and an Activity and Use Limitation was filed for the site. The total cost of the cleanup was approximately $550,000.
6. In November 1996, oily deposits containing PCB were found in the Canal Electric gas pipeline lateral and certain in-plant equipment. This contamination was a result of a malfunction of a shut-off valve in the meter station outside of Canal plant's jurisdiction. Cleanup and improvement costs are estimated to be between $500,000 and $1 million. Pending final cost allocation and reimbursement, Montaup's share of the costs is expected to be minimal. The cleanup is scheduled for completion in the first quarter of 1997.
Blackstone, Eastern Edison, Montaup and EUA Service are unable to predict the outcome of any of the foregoing environmental matters or to estimate the potential costs which may ultimately result. It is the policy of these companies in such cases to provide notice to liability insurers and to make claims. However, it is not possible at this time to predict whether liability, if any, will be assumed by, or can be enforced against, the insurance carriers in these matters. Under CERCLA, each responsible party can be held "jointly and severally" liable for clean-up costs. EUA or a subsidiary could thus be held fully liable for environmental damages for which they were only partially responsible. However, EUA might then be entitled to recover costs from other PRPs.
As of December 31, 1996, the EUA System has incurred costs of approximately $5.7 million (excluding the Mendon Road judgment) in connection with the foregoing environmental matters. EUA estimates that additional expenditures (excluding the Mendon Road judgment) may be incurred through 1998 of up to $2.8 million, substantially all of which relate to Blackstone.
As a general matter, the EUA System will seek to recover costs relating to environmental proceedings in their rates. Blackstone is recovering in rates certain of its incurred costs over a five-year period. Montaup is currently recovering certain of its incurred costs in its rates. Estimated amounts after 1998 are not now determinable since site studies which are the basis of these estimates have not been completed. As a result of the recoverability in current rates and the uncertainty regarding both its estimated liability, as well as potential contributions from insurance carriers and other responsible parties, EUA does not believe that the ultimate impact of the environmental costs will be material to the financial position of the EUA System or to any individual subsidiary and thus, no loss provision is required at this time.
EUA WestCoast L.P.
In June 1993, EUA WestCoast L.P., a partnership in which EUA Cogenex is the managing partner, filed a lawsuit against the contractors responsible for the design and construction of a 1.5 mw cogeneration facility, as well as the surety which issued a performance bond guaranteeing construction. Certain defendants in that action have filed cross-complaints against EUA WestCoast and EUA Cogenex, seeking, among other things, approximately $300,000 for payments withheld by EUA WestCoast due to the contractor's deficient performance, contribution and indemnity. A contractor has also filed a cross-complaint against the host. Additionally, the host has filed a cross-complaint against EUA Cogenex and the other parties in the litigation, seeking approximately $7 million in damages arising principally from lost economic advantage. EUA WestCoast filed its own cross complaint against the host affirmatively seeking damages. The above litigation was settled in the fourth quarter of 1996. The settlement called for, among other things, a payment to EUA Cogenex of $2.8 million and a general release by all parties to the lawsuit. The settlement was enforced by the courts and payment was received in December 1996.
Ridgewood
In September 1995, EUA FRC II Energy Associates, Micro Utility Partners of America, L.P., and EUA Westcoast, L.P., each of which is a partnership of which EUA Cogenex is the managing partner (the Partnerships) and EUA Cogenex entered into an assignment agreement with Ridgewood/Mass. Corp. (f/k/a Ridgewood Cogen Corporation) (Ridgewood) whereby Ridgewood acquired the benefits and obligation to certain cogeneration projects from EUA Cogenex and the Partnerships. In 1996, the Partnerships and EUA Cogenex filed a suit in the United States District Court for the district of Massachusetts against Ridgewood and others seeking payment of approximately $518,000, resulting from Ridgewood's failure and refusal to pay for services provided on their behalf under a certain Transition Period Agreement between and among the parties. On December 2, 1996, Ridgewood filed a demand for arbitration in Boston, Massachusetts with regard to such claim and with regard to an alleged breach of representations and warranties by EUA Cogenex and the Partnerships under the assignment agreement. Ridgewood seeks a total of approximately $4.3 million. The federal court action has been dismissed without prejudice pending the arbitration. In the arbitration, EUA Cogenex and the Partnerships have filed a counterclaim in which they also seek a determination that certain provisions of the assignment agreement are binding and enforceable according to their terms. The amount in controversy with respect to the counterclaims has not yet been determined. Management cannot determine at this time the ultimate outcome of these proceedings.
Other Proceedings
On December 15, 1995, Eastern Edison exercised its right to terminate a Power Purchase Agreement (PPA) entered into with the Meridian Middleboro Limited Partnership (MMLP) and a related entity on September 20, 1993. In February and May of 1996, MMLP made demands for over $25 million under the termination provision of the PPA. On June 17, 1996, Eastern Edison responded to MMLP's demand stating that only approximately $170,000 was due under the termination provision. On July 18, 1996, Eastern Edison filed a declaratory judgement action in Suffolk Superior Court in Boston, Massachusetts against MMLP seeking a declaration of the rights of the parties under the PPA. MMLP's response to the complaint, filed on August 8, 1996, included counter claims in excess of $20 million and a request for treble damages. In response to the counter claim, Eastern Edison paid MMLP approximately $192,000 as the amount Eastern Edison considered to have been owed to MMLP. The Company is vigorously defending itself from the counter claims. The Company cannot determine the outcome of this proceeding at this time.
On January 10, 1997, the Internal Revenue Service (IRS) issued a report in connection with its examination of the consolidated income tax returns of EUA for 1992 and 1993. The report includes an adjustment to disallow EUA's inclusion of its investment in EUA Power's Preferred Stock as a deduction in determining Excess Loss Account (ELA) taxable income relating to the redemption of EUA Power's Common and Preferred Stock in 1993. The IRS has taken the position that the redemption of the Preferred Stock resulted in a capital loss transaction and not a deduction in determining ELA. The Company disagrees with the IRS's position and filed a protest in March 1997. EUA believes that it will ultimately prevail in this matter. However, if the ultimate resolution of this matter is a favorable decision for the IRS and EUA does not have sufficient capital gain transactions to offset the capital loss then EUA could be required to record a charge that could have a material impact on financial results in the year of the charge but would not materially impact the financial position of the company.
In early 1997, ten plaintiffs brought suit against numerous defendants, including EUA, for injuries and illness allegedly caused by exposure to asbestos over approximately a thirty-year period, at premises, including some owned by EUA companies. The total damages claimed in all of these complaints is $25 million in compensatory and punitive damages, plus exemplary damages and interest and costs. Each complaint names between fifteen and twenty-eight defendants, including EUA. These complaints have been referred to the applicable insurance companies, and EUA is consulting with those insurers to determine the availability and extent of coverage. EUA cannot predict the ultimate outcome of this matter at this time.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None.
EXECUTIVE OFFICERS OF EASTERN UTILITIES ASSOCIATES
The names, ages and positions of all of the executive officers of EUA as of March 17, 1997, are listed below along with their business experience during the past five years. Officers are elected annually by the Trustees at the following meeting of Trustees after the annual meeting of shareholders. The 1997 Annual Meeting of Shareholders is scheduled to be held on May 19, 1997. There are no family relationships among these officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was selected. The executive officers also serve as officers/or directors of various subsidiary companies.
Name, Age and Position Business Experience During Past 5 Years
Richard M. Burns, 59 Comptroller since 1976; Assistant Secretary since Comptroller 1978; and Assistant Treasurer since April 1986. Chief Accounting Officer of EUA.
John D. Carney, 52 Executive Vice President since April 1995; Executive Vice President President of Eastern Edison Company since January 1990; President of Blackstone since April 1995. Responsible for the day-to-day activities of The EUA System's retail electric operations.
Clifford J. Hebert, Jr., 49 Treasurer since April 1986; Secretary since May, Treasurer and 1995. Responsible for financial, treasury and Secretary corporate affairs of the EUA System .
Donald G. Pardus, 56 Chairman since July 1990; Chief Executive Chairman of the Board, Officer since April 1989. Responsible for Chief Executive Officer the overall management of the EUA System. and Trustee
Robert G. Powderly, 49 Executive Vice President since April 1992; Executive Vice President President of Newport Electric Corporation from March 1990 to April 1992. Responsible for purchasing, customer information services, information systems, human resources, marketing and rate activities of the EUA System.
John R. Stevens, 56 President since July 1990; Chief Operating President, Chief Operating Officer since January 1990; Senior Executive Vice Officer and Trustee President from January 1990 to July, 1990. Responsible for retail operations and new ventures of the EUA System.
There have been no events under any bankruptcy act, no criminal proceedings and no judgments or injunctions material to the evaluation of the ability and integrity of any director or executive officer during the past five years.
PART II
Item 5.
Item 5. MARKET FOR EUA'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information set forth under the caption "QUARTERLY FINANCIAL AND COMMON SHARE INFORMATION" included in EUA's Annual Report to Shareholders for the year ended December 31, 1996 (Exhibit 13-1.03 filed herewith) is incorporated herein by reference.
The information required by this item for Blackstone and Eastern Edison is incorporated by reference to information contained under the like captioned sections of Blackstone's and Eastern Edison's 1996 Annual Reports (Exhibit 13- 1.01 and 13-1.08, respectively, filed herewith).
As of February 1, 1997 there were 11,978 EUA common shareholders of record.
The closing price of EUA's Common Shares as reported by the Wall Street Journal on March 17, 1997 was $18.125.
Item 6.
Item 6. SELECTED FINANCIAL DATA
The information set forth under the caption "SELECTED CONSOLIDATED FINANCIAL DATA" included in EUA's Annual Report to Shareholders and Eastern Edison's Annual Report for the year ended December 31, 1996, (Exhibit 13-1.03 and 13-1.08, respectively, filed herewith) and the information set forth under the caption "SELECTED FINANCIAL DATA" included in the Annual Report for the year ended December 31, 1996 for Blackstone (Exhibits 13-1.01 filed herewith) are incorporated herein by reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this item is incorporated herein by reference to pages 11 through 24 in the 1996 EUA Annual Report to Shareholders, pages 3 through 7 in the 1996 Blackstone Annual Report and pages 3 through 10 in the 1996 Eastern Edison Annual Report (Exhibits 13-1.03, 13-1.01 and 13-1.08 for EUA, Blackstone and Eastern Edison , respectively, filed herewith).
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference to pages 26 through 41 in the 1996 EUA Annual Report to Shareholders, page 2 and pages 10 through 27 in the 1996 Blackstone Annual Report and, page 2 and pages 13 through 33 in the 1996 Eastern Edison Annual Report (Exhibits 13-1.03, 13-1.01 and 13-1.08 for EUA, Blackstone and Eastern Edison, respectively, filed herewith).
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
PART III
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS
Eastern Utilities Associates
The information concerning trustees and executive officers set forth under the caption "ELECTION OF TRUSTEES AND OWNERSHIP OF COMMON SHARES" in EUA's definitive Proxy Statement to be mailed to shareholders in connection with the shareholders' annual meeting to be held on May 19, 1997, and filed with the SEC is incorporated herein by reference. See also "EXECUTIVE OFFICERS OF EASTERN UTILITIES ASSOCIATES" following Item 4 herein.
Blackstone and Eastern Edison
The names, ages and positions of all of the directors and executive officers of Blackstone and Eastern Edison as of March 17, 1997 are listed below with their business experience during the past five years. The directors of Blackstone and the directors, Treasurer and Clerk of Eastern Edison are each elected to serve until the next annual stockholders' meeting. All other officers are elected to serve until the next meeting of directors following the annual stockholders' meeting. There is no family relationship between any of the directors or officers of Blackstone and Eastern Edison. Messrs. Pardus and Stevens are Trustees of EUA. Certain officers of Blackstone and Eastern Edison are, or at various times in the past have been, officers and/or directors of the System Companies with which Blackstone and Eastern Edison have entered into contracts and had other business relations.
Name, Age and Position Business Experience During Past 5 Years
Richard M. Burns, 59* Vice President, Assistant Treasurer and Assistant Vice President Clerk/Assistant Secretary of Blackstone and Eastern Edison since April 1986.
John D. Carney, 52* President and Director of Blackstone since April Director and President 1995; President and Director of Eastern Edison since January 1990.
David H. Gulvin, 62 Senior Vice President of Blackstone and Eastern Senior Vice President Edison since April 1995; President of Blackstone and Director from November 1989 to April 1995; Director of Blackstone since November 1989. Director of Eastern Edison since July 1995. Responsible for corporate communications, consumer services, marketing and rate activities.
Barbara A. Hassan, 47 Vice President of Blackstone since April 1995; Vice President Vice President of Eastern Edison since January 1990. Responsible for the operation and maintenance of the transmission and distribution facilities.
Clifford J. Hebert, Jr., 49* Treasurer since April 1986 and Secretary/Clerk Treasurer since April 1995 of both Blackstone and Eastern and Secretary/Clerk Edison.
Michael J. Hirsh, 42 Vice President of Blackstone since July 1991; Vice President Vice President of Eastern Edison since April 1995; Prior to that he was either a Director or Manager of the Engineering or Resource Planning Departments of EUA Service for more than five years. Responsible for all engineering and technical services.
Kevin A. Kirby, 46 Vice President of Blackstone and Eastern Edison Vice President since April, 1995; prior to that he was a Director of the Integrated Resource Management department of EUA Service for five years; responsible for the resource planning, power supply and contract administration activities of the EUA System.
Donald G. Pardus, 56* Chairman of the Board since July 1989 and Director and Director since 1979 of both Blackstone and Chairman of the Board Eastern Edison.
Robert G. Powderly, 49* Executive Vice President and Director since March Director and Executive 1992 of both Blackstone and Eastern Edison. Vice President
John R. Stevens, 56* Vice Chairman of the Board since July 1989 and Director and Vice Director since July 1987 of both Blackstone and Chairman of the Board Eastern Edison.
* Please refer to the material supplied under the caption "EXECUTIVE OFFICERS OF EASTERN UTILITIES ASSOCIATES" following Item 4 herein for other information regarding this officer.
Item 11.
Item 11. EXECUTIVE COMPENSATION
Eastern Utilities Associates
The information concerning executive compensation set forth under the caption "COMPENSATION AND OTHER TRANSACTIONS" in EUA's definitive Proxy Statement to be mailed to shareholders in connection with the shareholders' annual meeting to be held on May 19, 1997 and filed with the SEC is incorporated herein by reference with the exception of the Report of the Compensation and Nominating Committee on Compensation of Executive Officers and accompanying Corporate Performance Graph that appears therein and which are specifically not incorporated herein by reference.
Blackstone and Eastern Edison
The Chief Executive Officer and the four other most highly compensated executive officers of Blackstone and Eastern Edison hold the same or similar positions with EUA and are not paid directly by either Blackstone or Eastern Edison. The information required by this item is incorporated herein by reference to the material under the caption "COMPENSATION AND OTHER TRANSACTIONS" in the definitive Proxy Statement of EUA, dated March 26, 1997, with the exception of the Report of the Compensation and Nominating Committee on Compensation of Executive Officers and accompanying Corporate Performance Graph that appears therein and which are specifically not incorporated herein by reference.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of certain beneficial owners of Blackstone and Eastern Edison.
_______________ *All shares, which are the only voting securities of Eastern Edison and Blackstone, are registered in the name of the beneficial owner.
(b) Security ownership of certain beneficial owners of EUA and management of EUA, Blackstone and Eastern Edison.
The statements concerning security ownership of certain beneficial owners and management set forth under the caption "ELECTION OF TRUSTEES AND OWNERSHIP OF COMMON SHARES" in EUA's definitive Proxy Statement to be mailed to shareholders in connection with the shareholders' annual meeting to be held on May 19, 1997 and filed with the SEC are incorporated herein by reference.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None. PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The response to this portion of Item 14 is set forth under Item 8.
(a)(2) Financial Statement Schedules
The following additional consolidated financial statement schedules filed herewith for EUA and Blackstone should be considered in conjunction with the financial statements in the EUA's Annual Report to Shareholders and Blackstone's Annual Report for the year ended December 31, 1996 (Exhibit 13- 1.03 and 13-1.01, respectively, filed herewith):
1. Financial Statement Schedules:
EUA Schedule II - Valuation and Qualifying Accounts for the three years ended December 31, 1996.
Blackstone Schedule II - Valuation and Qualifying Accounts for the three years ended December 31, 1996.
(a)(3) Exhibits (*denotes filed herewith).
Articles of Incorporation and By-Laws:
-EUA-
3-1.03 - Declaration of Trust of EUA, dated April 2, 1928, as amended (Exhibit A-3, File No. 70-3188; Exhibit 1 to EUA's 8-K Reports for April in each of the years 1957, 1962, 1966, 1968, 1972, and 1973, File No. 1-5366; Exhibit A-1 (a), Amendment No. 2 to Form U-1, File No. 70-5997; Exhibit 4-3, Registration No. 2-72589; Exhibit 1 to Certificate of Notification, File No. 70-6713; Exhibit 1 to Certificate of Notification, File No. 70-7084; Exhibit 3-2, Form 10-K of EUA or 1987, File No. 1-5366).
- Eastern Edison -
3-1.08 - Form of Restated and Amended Articles of Organization (filed as Exhibit B-1 to Form U5S of EUA for 1993).
Instruments Defining the Rights of Shareholders, Including Indentures:
- Eastern Edison -
4-1.08 - Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 of Eastern Edison (Exhibit 4-1, Registration No. 2-77468), and twenty-six supplements thereto (Exhibit A, File No. 70-3015; Exhibit A-3, File No. 70-3371; Exhibit C to Certificate of Notification, File No. 70-3371; Exhibit D to Certificate of Notification, File No. 3619; Exhibit D to Certificate of Notification, File No. 70-3798; Exhibit F to Certificate of Notification, File No. 70-4164; Exhibit D to Certificate of Notification, File No. 70-4748; Exhibit C to Certificate of Notification, File No. 70-5195; Exhibit F to Certificate of Notification, File No. 70-5379; Exhibit C to Certificate of Notification, File No. 70-5719; Exhibit 5-24 Registration No. 2- 65785; Exhibit F to Certificate of Notification, File No. 70-6463; Exhibit C to Certificate of Notification, File No. 70-6608; Exhibit C to Certificate of Notification, File No. 70-6737; Exhibit F to Certificate of Notification, File No. 70-6851; Exhibit 4-31, Form 10-K of EUA for 1984, File No. 1-5366; Exhibit F to Certificate of Notification, File No. 70-7254; Exhibit C to Certificate of Notification, File No. 70-7373; Exhibit C to Certificate of Notification, File No. 70-7373; Exhibit C to Certificate of Notification, File No. 70-7373; Exhibit F to Certificate of Notification, File No. 20-7511; Exhibit 4-34, Form 10-K of Eastern Edison for 1990, File No. 0-8480; Exhibit 4-24, Form 10-K of Eastern Edison for 1992, File No. 0-8480; Exhibit 4-35, Form 10-K of Eastern Edison for 1990, File No. 0-8480; Exhibit 4-36, Form 10-K of Eastern Edison for 1990, File No. 0- 8480; Exhibit C-33 to Form U5S of EUA for 1993; Exhibit C-34 to Form U5S of EUA for 1993; Exhibit 4-29.08, Form 10-K of Eastern Edison for 1994, File No. 0-8480).
- Montaup -
4-1.05 - Form of 8% Debenture Bonds due 2000 of Montaup (Exhibit 4-10, Registration No. 2-41488).
4-2.05 - Form of 8-1/4% Debenture Bonds due 2003 of Montaup (Exhibit B-3, Form U5S of EUA for year 1973).
4-3.05 - Form of 14% Debenture Bonds due 2005 of Montaup (Exhibit 4-11, Registration No. 2-55990).
4-4.05 - Form of 10% Debenture Bonds due 2008 of Montaup (Exhibit 5-3, Registration No. 2-65785).
4-5.05 - Form of 16-1/2% Debenture Bonds due 2010 of Montaup (Exhibit 4-11, Form 10-K of EUA for 1980, File No. 1-5366).
4-6.05 - Form of 12-3/8% Debenture Bonds due 2013 of Montaup (Exhibit 4-13, Form 10-K of EUA for 1983, File No. 1-5366).
4-7.05 - Form of 10-1/8% Debentures due 2008 of Montaup (Exhibit 4, Form 10-Q of Eastern Edison for quarter ended September 30, 1983, File No. 0-8480).
4-8.05 - Form of 9% Debenture Bonds due 2020 of Montaup (Exhibit 4-10, Form 10-K of Eastern Edison for 1990, File No. 0-8480).
4-9.05 - Form of 9 3/8% Debenture Bonds due 2020 of Montaup (Exhibit 4-11, Form 10-K of Eastern Edison for 1990, File No. 0-8480).
- Blackstone -
4-1.01 - First Mortgage Indenture and Deed of Trust dated as of December 1, 1980 of Blackstone (Exhibit A, Form 8-K of EUA dated January 14, 1981, File No. 1-5366) and two supplements thereto (Exhibit 4-33, Form 10-K of EUA for 1989, File No. 1-5366; Exhibit 4-3, Form 10-K of BVE for 1990, File No. 0-2602).
4-4.01 - Loan Agreement between Rhode Island Industrial Facilities Corporation and Blackstone dated as of December 1, 1984 (Exhibit 10-72, Form 10-K of EUA for 1984, File No. 1-5366).
- EUA Service -
4-1.07 - Note Purchase Agreement dated as of January 13, 1988 of Service (Exhibit 4-38, Form 10-K of EUA for 1987, File No. 1-5366).
- EUA Cogenex -
4-1.10 - Note Agreement dated as of June 28, 1990 of EUA Cogenex with the Prudential Insurance Company of America (Exhibit 4-46, Form 10-K of EUA for 1990, File No. 1-5366).
4-2.10 - Note Agreement dated as of October 29, 1991 between EUA Cogenex and Prudential Insurance Company of America (Exhibit 4-55, Form 10-K of EUA for 1991, File No. 1-5366).
4-3.10 - Note Purchase Agreement dated as of September 29, 1992 of EUA Cogenex and the Prudential Life Insurance Company of America (Exhibit 4-44, Form 10-K of EUA for 1992, File No. 1-5366).
4-4.10 - Indenture dated September 1, 1993 between EUA Cogenex and the Bank of New York as Trustee (Exhibit 4-4.10, Form 10-K of EUA for 1993, File No. 1-5366).
- Newport -
4-1.14 - Indenture of First Mortgage dated as of June 1, 1954 of Newport, as supplemented on August 1, 1959, April 1, 1962, October 1, 1964, April 1, 1967, September 1, 1969, September 1, 1970, June 1, 1978, October 1, 1978, May 1, 1986, December 1, 1987 and November 1, 1989 (Exhibit 4-49, Form 10-K of EUA for 1990, File No. 1-5366).
4-2.14 - United States Government Small Business Administration Loan to Newport entitled, "Base Closing Economic Injury Loan", signed May 30, 1975 and amended on October 6, 1983 (Exhibit 4-50, Form 10-K of EUA for 1990, File No. 1-5366).
4-3.14 - Indenture of Second Mortgage dated as of September 1, 1982 of Newport, as supplemented on December 1, 1988 (Exhibit 4-51, Form 10-K of EUA for 1990, File No. 1-5366).
4-4.14 - Loan Agreement between the Rhode Island Port Authority and Economic Development Corporation and Newport Electric Corporation dated as of January 6, 1994 (Exhibit 4-4.14, Form 10-K of EUA for 1993, File No. 1-5366).
4-5.14 - Trust Indenture between the Rhode Island Authority and Economic Development Corporation and Newport Electric Corporation dated as of January 1, 1994 (Exhibit 4-5.14, Form 10-K of EUA for 1993, File No. 1-5366).
4-6.14 - Letter of Credit and Reimbursement Agreement dated January 6, 1994 (Exhibit 4-6.14, Form 10-K of EUA for 1993, File No. 1-5366).
- EUA Ocean State -
4-1.12 - Note Purchase Agreement dated as of January 16, 1992 between EUA Ocean State Corporation and John Hancock Mutual Life Insurance Company (Exhibit 4-56, Form 10-K of EUA for 1991, File No. 1- 5366).
Material Contracts:
- EUA -
10-1.03 - Employees' Retirement Plan of Eastern Utilities Associates and its Subsidiary Companies Trust Agreement as amended and restated, effective July 1, 1981 (Exhibit 10-1, Registration No. 2-80205).
10-2.03 - Eastern Utilities Associates Employees' Savings Plan Trust Agreement (Exhibit 10-3, Form 10-K of EUA for 1992, File No. 1- 5366).
10-3.03 - Eastern Utilities Associates Employees' Savings Plan as amended and restated effective January 1, 1989 and December 21, 1994 (Exhibit 10-4, Form 10-K of EUA for 1992, File No. 1-5366; Exhibit 10-17.03 Form 10-K of EUA for 1995, File No. 1-5366).
10-4.03 - Stock Purchase Agreement dated as of December 10, 1986, among Eastern Utilities Associates, Citizens Corporation and Citizens Energy Corporation (Exhibit 10-104, Form 10-K of EUA for 1986, File No. 1-5366).
10-5.03 - Precedent Agreement dated as of November 29, 1989 between EUA and NECO Enterprises, Inc. (Exhibit B-4, Form U-1, File No. 70-7677).
10-6.03 - Amendment to and Restatement of Stock Purchase Agreement dated as of February 1, 1990 between EUA, NECO Enterprises, Inc., Newport Electric Corporation and a special-purpose subsidiary of EUA for the acquisition by EUA of the stock of Newport Electric Corporation (Exhibit B-3, Form U-1, File No. 70-7677).
10-7.03 - Letter of Assurance in connection with the Credit Agreement between Vermont Electric Transmission Company, Inc. and Bank of America National Trust and Savings Association dated July 19, 1983 (Exhibit 10-111, Form 10-K of EUA for 1990, File No. 1-5366).
10-8.03 - Amended and Restated Equity Maintenance Agreement dated as of September 29, 1992 among EUA and The Prudential Insurance Company of America and Pruco Life Insurance Company (Exhibit 10-9, EUA 10- K for 1992, File No. 1-5366).
10-9.03 - Guaranty, dated June 28, 1990 made by EUA in favor of The Prudential Life Insurance Company of America (Exhibit 10-10, EUA 10-K for 1992, File No. 1-5366).
10-10.03 - Guaranty, dated January 16, 1992 made by EUA in favor of John Hancock Mutual Life Insurance Company (Exhibit 4-125, Form 10-K of EUA for 1991, File No. 1-5366).
10-11.03 - Form of Service Contract between EUA Service Corporation and each of the other companies (including EUA) in the EUA System (Exhibit 13-1.03, Registration No. 2-55990).
10-12.03 - Form of EUA Restricted Stock Plan effective July 17, 1989 (Exhibit 10-13, EUA Form 10-K for 1992, File No. 1-5366).
10-13.03 - Eastern Utilities Associates Employees' Share Ownership Plan Trust Agreement (Exhibit 5, Form 10-K of EUA for 1977, File No. 1-5366).
10-14.03 - Employees' Retirement Plan of Eastern Utilities Associates and Its Affiliated Companies as amended and restated effective January 1, 1989, and December 21, 1994 (exhibit 10-14.03, Form 10-K of EUA for 1995, File No. 1-5 366; Exhibit 10-16.03, Form 10-K of EUA for 1995, File No. 1-5366).
- Eastern Edison -
10-1.08 - Trust Agreement dated as of July 1, 1993 between Massachusetts Industrial Finance Agency and Shawmut Bank, N.A. (filed as Exhibit 10-1.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480).
10-2.08 - Loan Agreement dated as of July 1, 1993 between Massachusetts Industrial Finance Agency and Eastern Edison (filed as Exhibit 10- 2.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480).
10-3.08 - Power Purchase Agreement entered into as of September 20, 1993 by and between Meridian Middleboro Limited Partnership and Eastern Edison Company (filed as Exhibit 10-3.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480).
10-4.08 - Inducement Letter dated July 14, 1993 from Eastern Edison to the Massachusetts Industrial Finance Agency and Goldman, Sachs & Company and Citicorp Securities Markets, Inc. (filed as Exhibit 10-4.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480).
- Montaup -
10-1.05 - Montaup Contract, as amended (Exhibit 4-B, Registration No. 2- 14119; Exhibit 13-A1, Registration No. 2-14718; Exhibit 4-B-2, Registration No. 2-26509; Exhibit 4-B-3, Registration No. 2- 33061; Exhibits 13-3 and 13-4, Registration No. 2-48966; Exhibit B-2, Form U5S of EUA for year 1974 and Exhibit 5-40, Registration No. 2-62862).
10-2.05 - Power Contract (composite copy) between Connecticut Yankee Atomic Power Company and Montaup dated July 1, 1964 as amended and supplemented March 1, 1978, August 22, 1980, and October 15, 1982 (Exhibit B-1, File No. 70-4245; Exhibit 20, Form 10-K of EUA for 1977, File No. 1-5366; Exhibit 10-52, Form 10-K for EUA for 1981, File No. 1-5366; Exhibit 10-67, Form 10-K for EUA for 1983, File No. 1-5366).
10-3.05 - Capital Funds Agreement (composite copy) between Connecticut Yankee Atomic Power Company and Montaup dated September 1, 1964 (Exhibit B-2, File No. 70-4245).
10-4.05 - Stockholder Agreement (composite copy) among Connecticut Yankee Atomic Power Company's Sponsors, including Montaup, dated July 1, 1964 (Exhibit B-4, File No. 70-4245).
10-5.05 - Contract for sale of power to Montaup by Canal Electric Company dated December 1, 1965 (Exhibit 2D, File No. 0-688).
10-6.05 - Capital Funds Agreement (composite copy) between Vermont Yankee Nuclear Power Corporation and Montaup dated as of February 1, 1968, and Amendment thereto dated as at March 12, 1968 (Exhibit B- 2, File No. 70-4611; Exhibit B-3, File No. 70-4611).
10-7.05 - Form of Power Contract between Vermont Yankee Nuclear Power Corporation and Montaup dated as of February 1, 1968, as amended June 1, 1972, April 15, 1983, April 24, 1985, June 1, 1985, May 6, 1988 (2), June 15, 1989 and December 1, 1989 (Exhibit B-4, File No. 70-4591; Exhibit 13-21, Registration No. 2-46612; Exhibit 10- 63, Form 10-K of EUA for 1983, File No. 1-5366; Exhibit 10-74, Form 10-K of EUA for 1985, File No. 1-5366; Exhibit 10-78, Form 10-K of EUA for 1986, File No. 1-5366; Exhibits 10-97 and 10-98, Form 10-K of EUA for 1988, File No. 1-5366; Exhibit 10-95, Form 10-K of EUA for 1989, File No. 1-5366; Exhibit 10-80, Form 10-K of Eastern Edison for 1990, File No. 0-8480).
10-8.05 - Sponsor Agreement (composite copy) among Vermont Yankee Nuclear Power Corporation's Sponsors, including Montaup, dated as of August 1, 1968 (Exhibit 4-0, Registration No. 2-33061).
10-9.05 - Capital Funds Agreement (composite copy) between Maine Yankee and Montaup dated May 20, 1968 and as amended August 1, 1985 (Exhibit B-2, File No. 70-4658; Exhibit 10-78, Form 10-K of EUA for 1985, File No. 1-5366).
10-10.05 - Power Contract (composite copy) between Maine Yankee Atomic and Montaup dated May 20, 1968, as amended December 19, 1983 and January 1, 1984 (Exhibit B-3, File No. 70-4658; Exhibit 10-64, Form 10-K of EUA for 1983, File No. 1-5366; Exhibit 10-66, Form 10-K of EUA for 1984, File No. 1-5366).
10-11.05 - Stockholder Agreement (composite copy) among Maine Yankee Sponsors, including Montaup, dated May 20, 1968 (Exhibit B-4, File 70-4658).
10-12.05 - Agreement (composite copy) among Vermont Yankee Nuclear Power Corporation's Sponsors, including Montaup, dated as of April 30, 1969 (Exhibit B-7, File No. 70-4435).
10-13.05 - Form of Agreement among Maine Yankee Atomic Power Company's Sponsors dated as of May 20, 1969 (Exhibit B-5, File No. 70-4658).
10-14.05 - Form of New England Power Pool Agreement dated as of September 1, 1971, as amended as of July 1, 1972, March 1, 1973, April 2, 1973, March 15, 1974, June 1, 1975, September 1, 1975, December 31, 1976, January 31, 1977, July 1, 1977, August 1, 1977, August 15, 1978, January 31, 1980, February 1, 1980, September 1, 1981, December 1, 1981, June 1, 1982, June 15, 1983, October 1, 1983, August 1, 1985, August 15, 1985, January 1, 1986, September 1, 1986, March 1, 1988, May 1, 1988, March 15, 1989, October 1, 1990, September 15, 1992, and May 1, 1993, (Exhibit 13-45, Registration No. 2-41488; Exhibit 13-38, Registration No. 2- 46612; Exhibits 13-39 and 13-40, Registration No. 2-48966; Exhibit B-3, Form U5S of EUA for year 1974; Exhibit 13-35(a), Registration No. 2-54449; Exhibit 13-35, Registration No. 2-55990, Exhibits 5-69 and 5-70, Registration Exhibit 13-35(a), Registration No. 2-54449; Exhibit 13-35, Registration No. 2- 55990, Exhibits 5-69 and 5-70, Registration No. 2-58625; Exhibit 6, Form 10-K of EUA for 1977, File No. 1-5366; Exhibit 1, Form 10-K of EUA for 1979, File No. 1-5366; Exhibit No. 10-67, Registration No. 2-80205; Exhibit 10-65, Form 10-K of EUA for 1983, File No. 1-5366; Exhibit 10-66, Form 10-K of EUA for 1983, File No. 1-5366; Exhibits 10-75, 10-76, and 10-77, Form 10-K of EUA for 1985, File No. 1-5366; Exhibit 10-79, Form 10-K of EUA for 1986, File No. 1-5366; Exhibits 10-99 and 10-100, Form 10-K of EUA for 1988, File No. 1-5366; Exhibit 10-96, Form 10-K of EUA for 1989, File No. 1-5366; Exhibit 10-81, Form 10-K of Eastern Edison for 1990, File No. 0-8480; Exhibit 10-38.05, Form 10-K of EUA for 1995, File No. 1-5366; Exhibit 10-39.05, Form 10-K of EUA for 1995, File No. 1-5366; Exhibit 10-40.05, Form 10-K of EUA for 1995, File No. 1-5366).
10-15.05 - Unit Participation Agreement between Maine Electric Power Company, Inc. and New Brunswick Electric Power Commission dated November 15, 1971 (Exhibit 13-43.1, Registration No. 2-44377).
10-16.05 - Assignment Agreement dated March 20, 1972 between Maine Electric Power Company, Inc. and New Brunswick Electric Power Commission (Exhibit 13-43.3, Registration No. 2-44377).
10-17.05 - Agreement between Montaup and Boston Edison Company dated August 1, 1972 and as amended January 1, 1985 for purchase of power from Pilgrim No. 1 nuclear unit at Plymouth, Massachusetts (Exhibit 13- 41, Registration No. 2-46612; Exhibit 10-67, Form 10-K of EUA for 1984, File No. 1-5366).
10-18.05 - Agreement dated as of May 1, 1973 for Joint Ownership, Construction and Operation of New Hampshire Nuclear Units among Public Service Company of New Hampshire and other utilities including Montaup, as amended as of May 24, 1974, June 21, 1974, September 25, 1974, October 25, 1974, January 31, 1975, as supplemented by Letter Agreement dated April 27, 1978 and amended as of April 18, 1979 (two amendments), April 25, 1979, June 8, 1979, October 11, 1979, December 15, 1979, June 16, 1980, December 31, 1980, June 1, 1982, April 27, 1984, June 15, 1984, March 8, 1985, March 14, 1986, May 1, 1986, September 19, 1986, November 5, 1987, January 13, 1989 and November 1, 1990. (Exhibit 13-57, Registration No. 2-48966; Exhibit B-6, Form U5S of EUA for year 1974; Exhibit 5-130, Registration No. 2-62862; Exhibit 5-70, Registration No. 2-65785; Exhibit 2, Form 10-K of EUA for 1979, File No. 1-5366; Exhibit 5-34, Registration No. 2-69052; Exhibit 20-1, Form 10-K of EUA for 1980, File No. 1-5366; Exhibit 10-69, Registration No. 2-80205; Exhibit 2, Form 10-Q of EUA for the Quarter Ended March 31, 1984, File No. 1-5366; Exhibit 3, Form 10-Q of EUA for the Quarter Ended June 30, 1984, File No. 1-5366; Exhibit 10-70, Form 10-K of EUA for 1985, File No. 1-5366; Exhibits 10-80 and 10-81, Form 10-K of EUA for 1986, File No. 1-5366; Exhibits 10-95 and 10-96, Form 10-K of EUA for 1987, File No. 1-5366; Exhibit 10-101, Form 10-K of EUA for 1988, File No. 1-5366; Exhibit 10-82, Form 10-K of Eastern Edison for 1990, File No. 0-8480).
10-19.05 - Sharing Agreement dated as of September 1, 1973 among The Connecticut Light and Power Company and other utilities, including Montaup, concerning participation in a nuclear generating unit located in Connecticut (Millstone Unit No. 3), as amended and supplemented by Amendatory Agreement dated May 11, 1984 as amended as of April 1, 1986 (Exhibit B-17, Form U5S of EUA for year 1973; Exhibit B-8, as amended as of April 11, 1986, Form U5S of EUA for year 1974; Exhibit B-30, Form U5S of EUA for year 1976; Exhibit 10-68, Form 10-K of EUA for 1984, File No. 1-5366; Exhibit 10-82, Form 10-K of EUA for 1986, File No. 1-5366).
10-20.05 - Agreement for Joint Ownership, Construction and Operation of William F. Wyman Unit No. 4 dated November 1, 1974 as amended June 30, 1975, August 16, 1976 and December 31, 1978 among Central Maine Power Company and other utilities including Montaup (Exhibit B-9, Form U5S of EUA for year 1974; Exhibit 13-58, Registration No. 2-55990; Exhibit 5-95, Registration No. 2-58625; Exhibit 5-40, Registration No. 2-69052).
10-21.05 - Agreement for Joint Ownership dated as of October 27, 1970 between Canal Electric Company and Montaup (Exhibit 13-71, Registration No. 2-55990).
10-22.05 - Agreement for use of Common Facilities by Canal Units I and II and for Allocation of Related Costs dated as of October 27, 1970 between Canal Electric Company and Montaup (Exhibit 13-72, Registration No. 2-55990).
10-23.05 - Guarantee Agreement (composite copy) dated as of November 13, 1981 between The Connecticut Bank and Trust Company, as Trustee, and Montaup relating to debentures of Connecticut Yankee Atomic Power Company (Exhibit 10-61, Form 10-K of EUA for 1981, File No. 1-5366).
10-24.05 - Agreement for Seabrook Project Disbursing Agent, dated as of May 23, 1984, as amended March 8, 1985, May 20, 1985, June 18, 1985, January 1, 1986, November, 1987, August 1, 1989, and restated as of November 1, 1990, among the participants in the Seabrook nuclear generating project, including Montaup and Yankee Atomic Electric Company (Exhibit 2, Form 10-Q of EUA for the Quarter Ended June 30, 1984, File No. 1-5366; Exhibit 10-69, Form 10-K of EUA for 1985, File No. 1-5366; Exhibits 10-86, 10-87 and 10-88, Form 10-K of EUA for 1986, File No. 1-5366; Exhibit 10-97, Form 10-K of EUA for 1987, File No. 1-5366; Exhibit 10-105, Form 10-K of EUA for 1989, File No. 1-5366; Exhibit 10-84, Form 10-K of Eastern Edison for 1990, File No. 0-8480).
10-25.05 - Guarantee Agreement dated as of August 1, 1985 among The Connecticut Bank and Trust Company, Connecticut Yankee Atomic Power Company and Montaup Electric Company relating to Revolving Credit Loans of Connecticut Yankee (Exhibit 10-85, Form 10-K of EUA for 1985, File No. 1-5366).
10-26.05 - Equity Funding Agreement for New England Hydro-Transmission Corporation dated as of June 1, 1985, between New England Hydro- Transmission Corporation and several New England electric utilities, including Montaup as amended as of May 1, 1986 and September 1, 1987 (Exhibits 10-96 and 10-97, Form 10-K of EUA for 1986, File No. 1-5366; Exhibit 10-116, Form 10-K of EUA for 1987, File No. 1-5366).
10-27.05 - Equity Funding Agreement for New England Hydro-Transmission Electric Company, Inc. dated as of June 1, 1985, between New England Hydro-Transmission Electric Company, Inc. and several New England electric utilities, including Montaup as amended as of May 1, 1986 and September 1, 1987 (Exhibits 10-98 and 10-99, Form 10-K of EUA for 1986, File No. 1-5366; Exhibit 10-117, Form 10-K of EUA for 1987, File No. 1-5366).
10-28.05 - Unit Power Agreement for the Sale of Unit Capacity and Energy from Ocean State Power Project to Montaup Electric Company dated as of May 14, 1986 as amended as of August 27, 1986, September 27, 1988, October 21, 1988, July 21, 1989, February 7, 1990 and December 21, 1990 (Exhibits 10-101 and 10-102, Form 10-K of EUA for 1986, File No. 1-5366; Exhibits 10-106 and 10-107, Form 10-K of EUA for 1988, File No. 1-5366; Exhibit 10-106, Form 10-K of EUA for 1989, File No. 1-5366; Exhibits 10-86 and 10-87, Form 10-K of Eastern Edison for 1990, File No. 0-8480).
10-29.05 - Power Purchase Agreement dated as of October 17, 1986, between Northeast Energy Associates and Montaup as amended as of June 28, 1989 (Exhibit 10-103, Form 10-K of EUA for 1986, File No. 1-5366; Exhibit 10-103, Form 10-K of EUA for 1989, File No. 1-5366).
10-30.05 - Settlement Agreement dated as of January 13, 1989 among Montaup, EUA Power, certain past and present owners of the Seabrook Project and Yankee Atomic Electric Company (Exhibit 10-110, Form 10-K of EUA for 1988, File No. 1-5366).
10-31.05 - Unit Power Agreement for the Sale of Second Unit Capacity and Energy from Ocean State Power Project to Montaup Electric Company dated as of September 28, 1988 as amended by an amendment dated July 21, 1989, and February 7, 1990 and a Supplemental Agreement dated July 21, 1989 (Exhibit 10-104, Form 10-K of EUA for 1989, File No. 1-5366; Exhibit No. 10-88, Form 10-K of Eastern Edison for 1990, File No. 0-8480).
10-32.05 - Purchase Power Contract between Newport and Montaup dated July 23, 1963, as revised on March 23, 1983 (Exhibit 10-108, Form 10-K of EUA for 1990, File No. 1-5366).
10-33.05 - Purchase Power Contract between Newport and Montaup for Contract Demand Service effective May 1, 1983, as amended on July 1, 1983, December 28, 1983 and November 1, 1984 (Exhibit 10-89, Form 10-K of Eastern Edison for 1990, File No. 0-8480 and Exhibit 10-109, Form 10-K of EUA for 1990, File No. 1-5366).
10-34.05 - Power Contract (composite copy) between Yankee Atomic Electric Company and Montaup dated June 30, 1959 as revised April 1, 1975, as further amended October 1, 1980, April 1, 1985, May 6, 1988, June 26, 1989, July 1, 1989 and February 1, 1992 (Exhibit 10-6, Registration No. 2-72655; Exhibit 10-73, Form 10-K of EUA for 1985, File No. 1.5366; Exhibit 10-96, Form 10-K of EUA for 1988, File No. 1-5366; Exhibits 10-93 and 10-94, Form 10-K of EUA for 1989, File No. 1-5366; Exhibit 10-46 Form 10-K of Eastern Edison for 1992, File No. 0-8480).
10-35.05 - Memorandum of understanding by and between Canal Electric Company and Montaup Electric Company dated September 23, 1993 (Exhibit 10- 39.05, Eastern Edison 10-K for 1993, File No. 0-8480).
10-36.05 - Ancillary Agreement by and between Algonquin Gas Transmission Company, Canal Electric Company and Montaup Electric Company dated October 8, 1993. (Exhibit 10-40.05 of Eastern Edison 10-K for 1993, File No. 0-8480).
*10-37.05 - Amendment to 10-2.05 dated December 4, 1996.
*10-38.05 - Thirty-third Amendment to 10-14.05 dated December 31, 1996.
*10-39.05 - Seventh Amendment to 10-28.05 dated February 12, 1996.
*10-40.05 - Eighth Amendment to 10-28.05 dated February 12, 1996.
*10-41.05 - Third Amendment to 10-31.05 dated February 12, 1996.
*10-42.05 - Fourth Amendment to 10-31.05 dated February 12, 1996.
- Blackstone -
10-1.01 - Trust Indenture between Rhode Island Industrial Facilities Corporation and the Rhode Island Hospital Trust Company dated as of December 1, 1984 (Exhibit 10-73, Form 10-K of EUA for 1984, File No. 1-5366).
10-2.01 - Remarketing Agreement between Rhode Island Hospital Trust Company, Citibank and Blackstone dated as of December 19, 1984 (Exhibit 10-74, Form 10-K of EUA for 1984, File No. 1-5366).
10-3.01 - Letter of Credit and Reimbursement Agreement between Blackstone Valley Electric Company and The Bank of New York dated as of January 21, 1993 (Exhibit 10-10, Form 10-K of Blackstone for 1992, File No. 0-2602).
10-4.01 - Interconnection Agreement by and between Blackstone and Ocean State Power dated November 1, 1988, as amended and restated effective August 16, 1989 by and among Blackstone, Ocean State Power I and Ocean State Power II (Exhibit 10-100, Form 10-K of EUA for 1989, File No. 1-5366).
10-5.01 - Power Purchase Agreement between Blackstone and Blackstone Hydro, Inc. dated as of January 8, 1989 and assignment to Montaup (Exhibits 10-101 and 10-102, Form 10-K of EUA for 1989, File No. 1-5366).
- Newport -
10-1.14 - Phase I Vermont Transmission Line Support Agreement dated as of December 1, 1981 and as amended as of June 1, 1982, November 1, 1982 and January 1, 1986 between Vermont Electric Transmission Company, Inc. and several New England utilities, including Montaup (Exhibit 10-65, Form 10-K of EUA for 1981, File No. 1- 5366; Exhibit 10-72, Registration No. 2-80205; Exhibit 10-64, Form 10-K of EUA for 1982, File No. 1-5366; Exhibit 10-84. Form 10-K of EUA for 1986, File No. 1-5366).
10-2.14 - Letter amendment dated August 4, 1983 reallocating the participating shares originally assigned to the Chicopee Municipal Lighting Plant and the Taunton Municipal Lighting Plant under the Phase I Vermont Transmission Line Support Agreement between Vermont Electric Transmission Company, Inc. and several New England electric utilities, including Newport, dated December 1, 1981, as amended on June 1, 1982 and November 1, 1982 (Exhibit 10-110, Form 10-K of EUA for 1990, File No. 1-5366).
10-3.14 - Phase I Terminal Facility Support Agreement dated December 1, 1981 and as amended as of June 1, 1982, November 1, 1982 and January 1, 1986 between New England Electric Transmission Corporation and several New England utilities, including Montaup (Exhibit 10-68, Form 10-K of EUA for 1981, File No. 1-5366; Exhibit 10-74, Registration No. 1-5366; Exhibit 10-68. Form 10-K of EUA for 1986, File No. 1-5366).
10-4.14 - Letter amendment dated July 29, 1983 reallocating the participating shares originally assigned to the Chicopee Municipal Lighting Plant and the Taunton Municipal Lighting Plant under the Phase I Terminal Facility Support Agreement between New England Transmission Corporation and several New England electric utilities, including Newport, dated December 1, 1981, as amended on June 1, 1982 and November 1, 1982 (Exhibit 10-112, Form 10-K of EUA for 1990, File No. 1-5366).
10-5.14 - Purchase Power Contract between Newport and City of Burlington Electric Department (life of the unit contract) for purchase of 15.24% of net capability of station output from Joseph C. McNeil Electric Generating Station located in Burlington, Vermont dated December 19, 1984 (Exhibit 10-115, Form 10-K of EUA for 1990, File No. 1-5366).
10-6.14 - Firm Energy Contract between Hydro-Quebec and several New England electric utilities, including Newport, dated as of October 14, 1985 (Exhibit 10-116, Form 10-K of EUA for 1990, File No. 1-5366).
10-7.14 - Unit Power Agreement for the Sale of Unit Capacity and Energy from Ocean State Power Project to Newport Electric Corporation dated May 14, 1986, as amended on August 20, 1986, July 12, 1988, September 23, 1988, October 21, 1988, July 21, 1989, February 7, 1990 and December 21, 1990 (Exhibit 10-117, Form 10-K for 1990, File No. 1-5366).
10-8.14 - Unit Power Agreement for the Sale of Second Unit Capacity and Energy from Ocean State Power Project to Newport Electric Corporation dated July 12, 1988 as amended and supplemented September 23, 1988, July 21, 1989 and February 7, 1990 (Exhibit 10-118, Form 10-K for 1990, File No. 1-5366).
10-9.14 - Agreement for Joint Ownership, Construction and Operation of William F. Wyman Unit No. 4 dated November 1, 1974 as amended June 30, 1975, August 16, 1976 and December 31, 1978 among Central Maine Power Company and other utilities including Newport (Exhibit B-9, Form U5S of EUA for year 1974; Exhibit 13-58, Registration No. 2-55990; Exhibit 5-95, Registration No. 2-58625; Exhibit 5-40, Registration No. 2-69052).
- EUA Ocean State -
10-1.12 - Ocean State Power Amended and Restated General Partnership Agreement among EUA Ocean State, Ocean State Power Company, TCPL Power Ltd., Narragansett Energy Resources Company and NECO Power, Inc. (collectively, the "OSP Partners") dated as of December 2, 1988, as amended March 27, 1989, December 31, 1990, November 12, 1992 and February 23, 1993 (Exhibit 10-107, Form 10-K of EUA for 1989; File No. 1-5366, Exhibits 10-3.12, 10-4.12 and 10-5.12, Form 10-K of EUA for 1994, File No. 1-5366).
10-2.12 - Ocean State Power II Amended and Restated General Partnership Agreement among EUA Ocean State, JMC Ocean State Corporation, Makowski Power, Inc., TCPL Power Ltd., Narragansett Energy Resources Company and Newport Electric Power Corporation (collectively, the "OSP II Partners") dated as of September 29, 1989 (Exhibit 10-110, Form 10-K of EUA for 1989, File No. 1-5366).
Annual Reports to Shareholders:
*13-1.03 - Annual Report to Shareholders of EUA for 1996, portions of which are incorporated by reference in this Annual Report on Form 10-K. Only the portions expressly so incorporated under PART II, Items 5, 6, 7 and 8 are to be deemed filed herewith.
*13-1.01 - Annual Report to Shareholders of Blackstone for 1996, portions of which are incorporated by reference in this Annual Report on Form 10-K. Only the portions expressly so incorporated under PART II, Items 5, 6, 7 and 8 are to be deemed filed herewith.
*13-1.08 - Annual Report to Shareholders of Eastern Edison for 1996, portions of which are incorporated by reference in this Annual Report on Form 10-K. Only the portions expressly so incorporated under PART II, Items 5, 6, 7 and 8 are to be deemed filed herewith.
Subsidiaries of EUA:
21-1.03 - Direct subsidiaries of Eastern Utilities Associates and the state of organization of each are: Blackstone Valley Electric Company (Rhode Island), Eastern Edison Company (Massachusetts), EUA Cogenex Corporation (Massachusetts), EUA Service Corporation (Massachusetts), EUA Ocean State Corporation (Rhode Island), EUA Energy Investment Corporation (Massachusetts), Newport Electric Corporation (Rhode Island) and EUA Energy Services, Inc. (Massachusetts). Montaup Electric Company (Massachusetts) is a subsidiary of Eastern Edison Company. Each of the above subsidiaries does business under its indicated corporate name.
Consent of Experts and Counsel:
*23-1.03 - Consent of Independent Accountants.
(b) Reports on Form 8-K.
On January 6, 1997, EUA filed a Current Report on Form 8-K with respect to Item 5 (Other Events).
On January 6, 1997, Eastern Edison filed a Current Report on Form 8-K with respect to Item 5 (Other Events).
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Signature Title Date
EASTERN UTILITIES ASSOCIATES
By /s/ Richard M. Burns Comptroller March 17, 1997 Richard M. Burns (Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/Donald G. Pardus Chairman and Chief Executive Officer Donald G. Pardus (Principal Executive Officer) and Trustee
/s/John Stevens President and Chief Operating Officer John R. Stevens (Principal Financial Officer) and Trustee
/s/ Richard M. Burns Comptroller Richard M. Burns (Principal Accounting Officer)
Russell A. Boss Trustee
/s/Paul J. Choquette, Jr. Trustee Paul J. Choquette, Jr. March 17, 1997 /s/Peter S. Damon Trustee Peter S. Damon
/s/Peter B. Freeman Trustee Peter B. Freeman
/s/Larry A. Liebenow Trustee Larry A. Liebenow
/s/Jacek Makowski Trustee Jacek Makowski
Wesley W. Marple, Jr. Trustee Wesley W. Marple, Jr.
/s/Margaret M. Stapleton Trustee Margaret M. Stapleton
/s/W. Nicholas Thorndike Trustee W. Nicholas Thorndike
[This page left blank intentionally] SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Signature Title Date
BLACKSTONE VALLEY ELECTRIC COMPANY
By/s/ Richard M. Burns Vice President March 17, 1997 Richard M. Burns (Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/Donald G. Pardus Chairman of the Board and Donald G. Pardus Director (Principal Executive Officer)
/s/John R. Stevens Vice Chairman and Director John R. Stevens (Principal Financial Officer)
/s/Richard M. Burns Vice President Richard M. Burns (Principal Accounting Officer)
/s/John D. Carney President and Director John D. Carney
/s/David H. Gulvin Senior Vice President David H. Gulvin and Director March 17, 1997
/s/Robert G. Powderly Executive Vice President and Robert G. Powderly Director
[This page left blank intentionally] SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Signature Title Date
EASTERN EDISON COMPANY
March 17, 1997 By/s/Richard M. Burns Vice President Richard M. Burns (Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/Donald G. Pardus Chairman of the Board and Director Donald G. Pardus (Principal Executive Officer)
/s/John R. Stevens Vice Chairman and Director John R. Stevens (Principal Financial Officer)
March 17, 1997 /s/Richard M. Burns Vice President Richard M. Burns (Principal Accounting Officer)
/s/John D. Carney President and Director John D. Carney
/s/David H. Gulvin Senior Vice President David H. Gulvin and Director
/s/Robert G. Powderly Executive Vice President and Robert G. Powderly Director
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EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
Item 14(a)(2). Financial Statement Schedules
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Report of Independent Accountants
To the Trustees and Shareholders of Eastern Utilities Associates:
Our report on the consolidated financial statements of Eastern Utilities Associates and subsidiaries has been incorporated by reference in this Form 10-K from page 40 of the 1996 Annual Report to Shareholders of Eastern Utilities Associates. In connection with our audits of such consolidated financial statements, we have also audited the related consolidated financial statement schedule listed in Item 14 (a)(2) of this Form 10-K.
In our opinion, the consolidated financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.
/s/Coopers & Lybrand L.L.P.
Boston, Massachusetts March 5, 1997
Report of Independent Accountants
To the Directors and Shareholder of Blackstone Valley Electric Company:
Our report on the financial statements of Blackstone Valley Electric Company has been incorporated by reference in this Form 10-K from page 27 of the 1996 Annual Report of Blackstone Valley Electric Company. In connection with our audits of such financial statements, we have also audited the related financial statement schedule listed in Item 14 (a)(2) of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.
/s/Coopers & Lybrand L.L.P.
Boston, Massachusetts March 5, 1997
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