ML021280596

Ltr from M. Blackburn Forwarding One Copy of 2001 Annual Financial Reports for Northeast Nuclear Energy Co

ML021280596
Person / Time
Site:	Millstone, Seabrook
Issue date:	04/25/2002
From:	Blackburn M North Atlantic Energy Service Corp, Northeast Nuclear Energy Co (NNECO)
To:	Office of Nuclear Reactor Regulation
References
Download: ML021280596 (98)

Text

Northeast Utilities System 107 Selden Street, Berlin, GT 06037 Northeast Utilities Service Company P.O. Box 270 Hartford, CT 06141-0270 (860) 665-5000 April 25, 2002 Director Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, DC 20555

Dear Sir/Madam:

In Accordance with paragraph 50.71(b) of 10CFR, Part 50, enclosed is one copy of the 2001 Annual Financial Reports for Northeast Nuclear Energy Company, and North Atlantic Energy Service Corporation, license holders.

Please acknowledge receipt by returning the duplicate of this letter in the stamped, self addressed envelope enclosed for your convenience.

Respectfully yours, M. J. Blackburn Associate Accountant Northeast Utilities Service Company MJB Enclosures c:

S. J. Sinnott MOD 4

K:\\Accting\\Fr\\Er\\Annrpt200l\\

Filing Letters\\NRC.doc

Form U-13-60 Mutual and Subsidiary Service Companies ANNUAL REPORT FOR THE PERIOD Beginning January 1, 2001 and Ending December 31, 2001 TO THE U.S. SECURITIES AND EXCHANGE COMMISSION OF NORTHEAST NUCLEAR ENERGY COMPANY A Subsidiary Service Company Date of Incorporation - November 14, 1950 State of Sovereign Power under which Incorporated or Organized - Connecticut Location of Principal Executive Offices of Reporting Company - Selden Street, Berlin CT 06037

Name, title, and address of officer to whom correspondence concerning this report should be addressed:

John P. Stack, Vice President - Accounting and Controller, P.O. Box 270, Hartford, CT 06141-0270 Name of Principal Holding Company Whose Subsidiaries are served by Reporting Company NORTHEAST UTILITIES

INSTRUCTIONS FOR USE ON FORM U-13-60

1.

TIME OF FILING Rule 94 provides that on or before the first day of May in each calendar year, each mutual service company and each subsidiary service company as to which the Commission shall have made a favorable finding pursuant to Rule 88, and every service company whose application for approval or declaration pursuant to Rule 88 is pending shall file with the Commission an annual report on Form U-13-60 and in accordance with the instructions for that form.

2.

NUMBER OF COPIES Each annual report shall be filed in duplicate.

The company should prepare and retain at least one extra copy for itself in case correspondence with reference to the report becomes necessary.

3.

PERIOD COVERED BY REPORT The first report filed by any company shall cover the period from the date the Uniform System of Accounts was required to be made effective as to that company under Rules 82 and 93 to the end of that calendar year.

Subsequent reports should cover a calendar year.

4.

REPORT FORMAT Reports shall be submitted on the forms prepared by the Commission.

If the space provided on any sheet of such form is inadequate, additional sheets may be inserted on the same size as a sheet of the form or folded to such size.

5.

MONEY AMOUNTS DISPLAYED All money amounts required to be shown in financial statements may be expressed in whole dollars, in thousands of dollars or hundreds thousands of dollars, as appropriate, and subject to provisions of Regulation S-X (§210.3-0.1(b)).

6.

DEFICITS DISPLAYED Deficits and other like entries shall be indicated by the use of either brackets or a parenthesis with corresponding reference in footnotes.

(Regulation S-X (§210.3-0.1(c)).

7.

MAJOR AMENDMENTS OR CORRECTIONS Any company desiring to amend or correct a major omission or error in a report after it has been filed with the Commission shall submit an amended report including only those pages, schedules, and entries that are to be amended or corrected.

A cover letter shall be submitted requesting the Commission to incorporate the amended report changes and shall be signed by a duly authorized officer of the company.

8.

DEFINITIONS Definitions contained in Instruction 01-8 to the Uniform System of Accounts for Mutual Service Companies and Subsidiary Companies, Public Utility Holding Company Act of 1935, as amended by February 2, 1979 shall be applicable to words or terms used specifically within this Form U-13-60.

9.

ORGANIZATION CHART The service company shall submit with each annual report a copy of its current organization chart.

10.

METHODS OF ALLOCATION The service company shall submit with each annual report a listing of the currently effective methods of allocation being used by the service company and on file with the Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935.

11.

ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED The service company shall submit with each annual report a copy of the annual statement supplied to each associate company in support of the amount of compensation for use in capital billed during the calendar year.

LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS Description of Schedules and Accounts COMPARATIVE BALANCE SHEET SERVICE COMPANY PROPERTY ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICE COMPANY INVESTMENTS ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES FUEL STOCK EXPENSES UNDISTRIBUTED STORES EXPENSE UNDISTRIBUTED MISCELLANEOUS CURRENT AND ACCRUED ASSETS MISCELLANEOUS DEFERRED DEBITS

RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES PROPRIETARY CAPITAL LONG-TERM DEBT CURRENT AND ACCRUED LIABILITIES NOTES TO FINANCIAL STATEMENTS COMPARATIVE INCOME STATEMENT ANALYSIS OF BILLING - ASSOCIATE COMPANIES ANALYSIS OF BILLING -

NONASSOCIATE COMPANIES ANALYSIS OF CHARGES FOR SERVICE -

ASSOCIATE AND NONASSOCIATE COMPANIES SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE FUNCTION DEPARTMENTAL ANALYSIS OF SALARIES OUTSIDE SERVICES EMPLOYED EMPLOYEE PENSIONS AND BENEFITS GENERAL ADVERTISING EXPENSES MISCELLANEOUS GENERAL EXPENSES RENTS TAXES OTHER THAN INCOME TAXES DONATIONS OTHER DEDUCTIONS NOTES TO STATEMENT OF INCOME Schedule or Acct.

No.

Schedule I Schedule II Schedule Schedule Schedule Schedule Schedule Schedule Schedule III IV V

VI VII viii IX Schedule X Schedule XI Schedule XII Schedule XIII Schedule XIV Schedule XV Account 457 Account 458 Schedule XVI Schedule XVII Account 920 Account 923 Account 926 Account 930.1 Account 930.2 Account 931 Account 408 Account 426.1 Account 426.5 Schedule XVIII 2

Page No.

4-5 6-7 8

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24-25 26 27 28 29 30 31 32 33 34 35

LISTING OF INSTRUCTIONAL FILING REQUIREMENTS Description of Reports or Statements Page No.

ORGANIZATION CHART 36 METHODS OF ALLOCATION 37 ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED 38 ELECTRIC POWER BROKERING AND MARKETING ACTIVITIES 38A SIGNATURE PAGE 39 3

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY SCHEDULE I COMPARATIVE BALANCE SHEET Give balance sheet of the Company as of December 31 of the current and prior year.

ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31 SERVICE COMPANY PROPERTY Service company property (Schedule II)

Construction work in progress (Schedule II)

Total Property Less accumulated provision for depreciation and amortization of service company property (Schedule III)

Net Service Company Property INVESTMENTS Investments in associate companies (Schedule IV)

Other investments (Schedule IV)

Total Investments CURRENT AND ACCRUED ASSETS Cash Special deposits Working funds Temporary cash investments (Schedule IV)

Notes receivable Accounts receivable Accumulated provision of uncollectible accounts Accounts receivable from associate companies (Schedule V)

Fuel stock expenses undistributed (Schedule VI)

Materials and supplies Stores expense undistributed (Schedule VII)

Prepayments Miscellaneous current and accrued assets (Schedule VIII)

Total Current and Accrued Assets DEFERRED DEBITS Unamortized debt expense Clearing accounts Miscellaneous deferred debits (Schedule IX)

Research, development, or demonstration expenditures (Schedule X)

Unamortized loss on reacquired debt Accumulated deferred income taxes Total Deferred Debits TOTAL ASSETS AND OTHER DEBITS 2001 2000 (Thousands of Dollars) 37,138 416 37,554 15,771 21,783 36 3,119 58, 058 61,213 1,062 29,578 30,640 91,853 4,517 49,194 71,312 46 1,188 126,257 8

33,715 42,252 75,975 224,015 101 107 108 123 124 131 134 135 136 141 143 144 146 152 154 163 165 174 181 184 186 188 189 190

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY SCHEDULE I -

COMPARATIVE BALANCE SHEET Give balance sheet of the Company as of December 31 of the current and prior year.

ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31 2001 2000 PROPRIETARY CAPITAL (Thousands of Dollars)

Common stock issued (Schedule XI)

Miscellaneous paid-in-capital (Schedule XI)

Appropriated retained earnings (Schedule XI)

Unappropriated retained earnings (Schedule XI)

Total Proprietary Capital LONG-TERM DEBT Advances from associate companies (Schedule XII)

Other long-term debt (Schedule XII)

Unamortized premium on long-term debt Unamortized discount on long-term debt-debit 15 15,229 851 16,095 15 15,229 439 15,683 Total Long-Term Debt CURRENT AND ACCRUED LIABILITIES Notes payable Accounts payable Notes payable to associate companies (Schedule XIII)

Accounts payable to associate companies (Schedule XIII)

Taxes accrued Interest accrued Dividends declared Tax collections payable Miscellaneous current and accrued liabilities (Schedule XIII)

Total Current and Accrued Liabilities DEFERRED CREDITS Other deferred credits Accumulated deferred investment tax credits Total Deferred Credits ACCUMULATED DEFERRED INCOME TAXES 5,237 5,575 (2,547) 36,303 16,281 (363)

(8) 50,521 58,778 16,017 963 294 130,474 182,989 24,364 979 16,980 25,343 TOTAL LIABILITIES AND PROPRIETARY CAPITAL 91,853 224,015 201 211 215 216 223 224 225 226 231 232 233 234 236 237 238 241 242 253 255 282

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE II

- SERVICE COMPANY PROPERTY BALANCE AT RETIREMENTS BALANCE BEGINNING OR OTHER AT CLOSE DESCRIPTION OF YEAR ADDITIONS SALES CHANGES(1)

OF YEAR (Thousands of Dollars)

SERVICE COMPANY PROPERTY Account 301 ORGANIZATION 303 MISCELLANEOUS INTANGIBLE PLANT 304 LAND AND LAND RIGHTS 305 STRUCTURES AND IMPROVEMENTS 306 LEASEHOLD IMPROVEMENTS 307 EQUIPMENT (2) 308 OFFICE FURNITURE AND EQUIPMENT 309 AUTOMOBILES, OTHER VEHICLES AND RELATED GARAGE EQUIPMENT 310 AIRCRAFT AND AIRPORT EQUIPMENT 311 OTHER SERVICE COMPANY PROPERTY (3)

STRUCTURES AND IMPROVEMENTS REACTOR PLANT EQUIPMENT ACCESSORY ELECTRIC EQUIPMENT MISCELLANEOUS POWER PLANT EQUIPMENT OFFICE FURNITURE AND EQUIPMENT SUB-TOTAL 107 CONSTRUCTION WORK IN PROGRESS (4)

TOTAL 33,296 27 2,964 851 37,138 416 37,554 (188) 30 (158)

(407)

(565)

(33,296)

(27)

(2,776)

(881)

(36,980) (A)

(9)

(B)

(36,989)

(1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:

(A)

SALE OF MILLSTONE STATION TO DOMINION (36,976)

TRANSFER TO CL&P (4)

(36,980)

(B)

SALE OF MILLSTONE STATION TO DOMINION (9) 321 322 324 325 391 SCHEDULE II CONTINUED (2) SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED.

THE SERVICE COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:

SUBACCOUNT DESCRIPTION ADDITIONS OF YEAR S................................................................................................................

(Thousands of Dollars)

NONE (3)

DESCRIBE OTHER SERVICE COMPANY PROPERTY:

(4)

DESCRIBE CONSTRUCTION WORK IN PROGRESS:

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE III ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICE COMPANY PROPERTY ADDITIONS OTHER BALANCE AT CHARGED CHANGES BALANCE BEGINNING TO ADD AT CLOSE DESCRIPTION OF YEAR ACCT 403 RETIREMENTS (DEDUCT)l/

OF YEAR (Thousands of Dollars)

Account 301 ORGANIZATION 303 MISCELLANEOUS INTANGIBLE PLANT 304 LAND AND LAND RIGHTS 305 STRUCTURES AND IMPROVEMENTS 306 LEASEHOLD IMPROVEMENTS 307 EQUIPMENT 308 OFFICE FURNITURE AND FIXTURES 309 AUTOMOBILES, OTHER VEHICLES AND RELATED GARAGE EQUIPMENT 310 AIRCRAFT AND AIRPORT EQUIPMENT 311 OTHER SERVICE COMPANY PROPERTY 321 STRUCTURES AND IMPROVEMENTS 12,863 207 (13,070) 322 REACTOR PLANT EQUIPMENT 324 ACCESSORY ELECTRIC EQUIPMENT 14 (14) 325 MISCELLANEOUS POWER PLANT EQUIPMENT 2,055 11 (2,066) 391 OFFICE FURNITURE AND FIXTURES 839 4

(843)

TOTAL 15,771 222 (15,993) 1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:

Sale of Millstone to DRI/CLP (15,993)

(15,993)

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE IV -

INVESTMENTS INSTRUCTIONS:

Complete the following schedule concerning investments.

Under Account 124, "Other Investments,'

state each investment separately, with description, including the name of issuing company, number of shares or principal amount, etc.

Under Account 136, "Temporary Cash Investments," list each investment separately.

S...............................................................................................

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR ACCOUNT 123 -

INVESTMENT IN ASSOCIATE COMPANIES NONE ACCOUNT 124 -

OTHER INVESTMENTS NONE ACCOUNT 136 -

TEMPORARY CASH INVESTMENTS NONE TOTAL ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE V -

ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES INSTRUCTIONS:

Complete the following schedule listing accounts receivable from each associate company. Where the service company has provided accommodation or convenience payments for associate companies, a separate listing of total payments for each associate company by subaccount should be provided.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR (Thousands of Dollars)

ACCOUNT 146 -

ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES Northeast Utilities System Money Pool Northeast Generation Services Company The Connecticut Light and Power Company Western Massachusetts Electric Company Northeast Utilities Service Company North Atlantic Energy Company North Atlantic Energy Service Corporation Public Service Company of New Hampshire TOTAL 9,300 41 12,343 2,882 24,548 (10) 59 31 49,194 56,900 1,158 58,058 ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:

See page 10A for details.

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE V -

ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES INSTRUCTIONS:

Complete the following schedule listing accounts receivable from each associate company. Where the service company has provided accommodation or convenience payments for associate companies, a separate listing of total payments for each associate company by subaccount should be provided.

7 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --.

TOTAL DESCRIPTION PAYMENTS (Thousands of Dollars)

ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:

The Connecticut Light and Power Company 14 Western Massachusetts Electric Company 3

North Atlantic Energy Service Corporation 385 Northeast Generation Services Company 62 Northeast Utilities Service Company 13 TOTAL 477 Convenience payments result primarily from the following items:

Department of Energy Decontamination and Membership Dues 316 Engineering Services 64 Miscellaneous (27 items) 97 TOTAL 477

-10A-

I L-ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE VI -

FUEL STOCK EXPENSES UNDISTRIBUTED INSTRUCTIONS:

Report the amount of labor and expenses incurred with respect to fuel stock expenses during the year and indicate amount attributable to each associate company. Under the section headed "Summary" listed below, give an overall report of the fuel functions performed by the service company.

DESCRIPTION LABOR EXPENSES TOTAL (Thousands of Dollars)

ACCOUNT 152 -

FUEL STOCK EXPENSES UNDISTRIBUTED ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE VII -

STORES EXPENSE UNDISTRIBUTED INSTRUCTIONS:

Report the amount of labor and expenses incurred with respect to stores expense during the year and indicate amount attributable to each associate company.

DESCRIPTION LABOR EXPENSES TOTAL (Thousands of Dollars)

ACCOUNT 163 -

STORES EXPENSE UNDISTRIBUTED Beginning Balance as of January 1, 2001 46 Activity for the year:

Stores expense undistributed The above stores expenses are billed back to each of the companies listed below:

The Connecticut Light & Power Company Western Massachusetts Electric Company Public Service Company of New Hampshire Nonassociate Companies (see page 22 for list of the companies)

Stores expense distributed Net Activity for year 483 2,043 (353)

(82)

(5)

(52)

(492)

(9)

(1,490)

(348)

(20)

(222)

(2,080)

(37)

Ending Balance as of December 31, 2001 2,526 (1,843)

(430)

(25)

(274)

(2,572)

(46)

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE VIII MISCELLANEOUS CURRENT AND ACCRUED ASSETS INSTRUCTIONS:

Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR (Thousands of Dollars)

ACCOUNT 174 -

MISCELLANEOUS CURRENT AND ACCRUED ASSETS NONE TOTAL ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE IX MISCELLANEOUS DEFERRED DEBITS INSTRUCTIONS:

Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group.

BALANCE AT BEGINNING OF YEAR DESCRIPTION BALANCE AT CLOSE OF YEAR (Thousands of Dollars)

ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS Long term receivable from Rocky River Realty Company (associated company)

RABBI Trust funding Employee performance payments Unfunded supplemental executive retirement plan Decommissioning costs - Millstone Unit No.

1 Restricted stock - unearned compensation Stores expense clearing Unissued non-inventory stock materials Displaced worker protection coverage Nuclear revenue initiatives Sale of inventory Other deferred debits (2 items in 2001 and 6 items in 2000)

TOTAL 6,039 952 46 1,062 23,890 11 25 108 1,824 (63)

(183) 4 33,715 1,062 11 (11) 1,062 LL-ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE X

RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES INSTRUCTIONS:

Provide a description of each material research, development, or demonstration project which incurred costs by the service corporation during the year.

DESCRIPTION AMOUNT (Thousands of Dollars)

ACCOUNT 188 -

RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES EPRI Research Dues 44 Services Billed from Northeast Utilities Service Company (Associated Company) 31 Internal Charges 690 Nuclear Oversight Audit - Environmental Quality 13 ISO 14001 Environmental Audit 147 Larval Winter Flounder Studies 22 Master Manual 28 Implementation 39 Scientific/Technical NPDES Permit 40 Preventive Maintenance Millstone MET System 45 Miscellaneous Projects 12 The above expenses are billed back to each of the associated companies listed below:

The Connecticut Light and Power Company (819)

Western Massachusetts Electric Company (191)

Public Service Company of New Hampshire (22)

Nonassociate Companies (see page 22 for list of the companies)

(51)

TOTAL ANNUAL REPORT OF.NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XI PROPRIETARY CAPITAL NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD ACCOUNT SHARES VALUE NUMBER CLASS OF STOCK AUTHORIZED PER SHARE NO.

OF SHARES TOTAL AMOUNT (Thousands of Dollars) 201 COMMON STOCK ISSUED 60,000

$10 1,500

$15 INSTRUCTIONS: Classify amounts in each account with brief' explanation, disclosing the general nature of transactions which give rise to the reported amounts.

DESCRIPTION AMOUNT (Thousands of Dollars)

ACCOUNT 211 -

MISCELLANEOUS PAID-IN-CAPITAL

$15,229 ACCOUNT 215 -

APPROPRIATED RETAINED EARNINGS TOTAL

$15,229 INSTRUCTIONS: Give particulars concerning net income or (loss) during the year, distinguishing between compensation for the use of capital owed or net loss remaining from servicing nonassociated per the General Instructions of the Uniform Systems of Accounts. For dividends paid during the year in cash or otherwise, provide rate pecentage, amount of dividend, date declared and date paid.

BALANCE AT NET INCOME BALANCE AT BEGINNING OR DIVIDENDS CLOSE DESCRIPTION OF YEAR (LOSS)

PAID OF YEAR S................................................................................................

(Thousands of Dollars)

ACCOUNT 216-UNAPPROPRIATED RETAINED EARNINGS

$438

$413

$851 TOTAL

$438

$413

$851 ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XII LONG-TERM DEBT INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and advances on open account. Names of associate companies from which advances were received shall be shown under the class and series of obligation column.

For Account 224 --

Other long-term debt provide the name of creditor company or organization, terms of obligation, date of maturity, interest rate, and the amount authorized and outstanding.

BALANCE BALANCE TERMS OF OBLIG.

DATE AT AT CLASS & SERIES OF INTEREST AMOUNT BEGINNING DEDUCTIONS (3 CLOSE NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF'YEAR ADDITIONS (1)

OF YEAR (Thousands of Dollars)

ACCOUNT 223-ADVANCES FROM ASSOCIATE COMPANIES:

NONE ACCOUNT 224-OTHER LONG-TERM DEBT:

TOTAL OTHER LONG-TERM DEBT NONE

=

17-

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XIII -

CURRENT AND ACCRUED LIABILITIES INSTRUCTIONS:

Provide balance of notes and accounts payable to each associate company.

Give description and amount of miscellaneous current and accrued liabilities.

Items less than $10,000 may be grouped, showing the number of items in each group.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR ACCOUNT 233 -

NOTES PAYABLE TO ASSOCIATE COMPANIES Northeast Utilities System Money Pool TOTAL (Thousands of Dollars)

ACCOUNT 234 -

ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES The Connecticut Light and Power Company Western Massachusetts Electric Company Northeast Utilities Service Company Northeast Utilities Public Service Company of New Hampshire North Atlantic Energy Service Corporation Northeast Generation Services Company TOTAL (204) 45 9,644 160 5,575 1

6,635 16,281 5,575 ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES Millstone 3 Funding Liability Pension Cost Employee Stock Option Plan Accrual Performance Reward Program Payroll Accrual Severance Accrual Miscellaneous (3 items in 2001 and 6 items in 2000)

TOTAL 30,717 76,969 386 19,185 4,403 (1,176)

(10) 130,474 1,057 49,440 20 (13) 17 50,521 ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS:

The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

1.

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES General Northeast Nuclear Energy Company (NNECO or the company) is a wholly owned subsidiary of Northeast Utilities (NU). The Connecticut Light and Power Company (CL&P), Public Service Company of New Hampshire (PSNH), Western Massachusetts Electric Company (WMECO), North Atlantic Energy Corporation, Holyoke Water Power Company, and Yankee Energy System, Inc. are the operating companies comprising the Northeast Utilities system (NU system) and are wholly owned by NU.

On March 31, 2001, CL&P and WMECO consummated the sale of Millstone 1 and 2 to a subsidiary of Dominion Resources, Inc., Dominion Nuclear Connecticut, Inc. (DNCI). CL&P, PSNH and WMECO sold their ownership interests in Millstone 3 to DNCI. This sale included all of the respective joint ownership interests of CL&P, PSNH and WMECO in Millstone 3. The NU system received approximately $1.2 billion of cash proceeds from the sale and applied the proceeds to taxes and reductions of debt and equity at CL&P, PSNH and WMECO. As part of the sale, DNCI assumed responsibility for decommissioning the three Millstone units.

Prior to March 31, 2001, NNECO acted as agent for the NU system companies and other New England utilities in operating the Millstone nuclear units. Until that date, the costs of the nuclear units were recorded by CL&P, PSNH, WMECO, and the unaffiliated utilities based on their proportionate ownership shares.

Several wholly owned subsidiaries of NU provide support services for the NU system companies and, in some cases, for other New England utilities. Northeast Utilities Service Company (NUSCO) provides centralized accounting, administrative, engineering, financial, information resources, legal, operational, planning, purchasing, and other services to the NU system companies. North Atlantic Energy Service Corporation has operational responsibility of the Seabrook Station nuclear unit.

All transactions among affiliated companies are on a recovery of cost basis which may include amounts representing a return on equity and are subject to approval by various federal and state regulatory agencies.

Public Utility Regulation NU is registered with the Securities and Exchange Commission as a holding company under the Public Utility Holding Company Act of 1935 (1935 Act) and NU and its subsidiaries, including NNECO, are subject to the provisions of the 1935 Act.

Depreciation The provision for depreciation was calculated using the straight-line method based on the estimated useful remaining lives of depreciable utility plant-in-service, adjusted for salvage value and removal costs, as approved by the appropriate regulatory agency where applicable. Depreciation rates were applied to plant-in-service from the time they were placed in service. When plant is retired from service, the original cost of plant, including costs of removal less salvage, is charged to the accumulated provision for depreciation.

19A

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS Revenues The company provided services to the affiliated utility companies on the basis of recovery of cost plus return on capital, as defined under the terms of agreements, which have been approved by various federal and state regulatory commissions having jurisdiction over operations of the company and the affiliated utility companies.

2.

SHORT-TERM DEBT Certain subsidiaries of NU, including NNECO, are members of the Northeast Utilities System Money Pool (Pool). The Pool provides a more efficient use of the cash resources of the NU system and reduces outside short-term borrowings. NUSCO administers the Pool as agent for the member companies. Short term borrowing needs of the member companies are first met with available funds of other member companies, including funds borrowed by NU parent. NU parent may lend to the Pool but may not borrow.

Funds may be withdrawn from or repaid to the Pool at any time without prior notice. Investing and borrowing subsidiaries receive or pay interest based on the average daily federal funds rate. Borrowings based on loans from NU parent, however, bear interest at NU parent's cost and must be repaid based upon the terms of NU parent's original borrowing. At December 31, 2001 and 2000, NNECO had $56.9 million in lendings to and no borrowings from or lendings to the Pool, respectively. The interest rate on lendings to the Pool at December 31, 2001, was 1.5 percent.

3.

LEASES Prior to March 31, 2001, the company entered into lease agreements with two unaffiliated third parties for the use of nuclear control room simulators for Millstone 2 and CL&P's and WMECO's share of the simulator for Millstone 3. In addition, the company's affiliates entered into lease agreements, some of which are capital leases, for the use of data processing and office equipment, vehicles, and office space.

NNECO was billed for its proportionate share of these leases through the intercompany billing system. In conjunction with the sale of the Millstone units, these lease agreements were either transferred to DNCI or terminated.

Capital lease rental payments charged to operating expense were $0.9 million through March 31, 2001, and $2.8 million in 2000. Interest included in capital lease rental payments was $0.02 million through March 31, 2001, and $0.3 million in 2000. Operating lease rental payments charged to expense were

$0.06 million through March 31, 2001, and $2.3 million in 2000.

4.

PENSION BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS The NU system companies, including NNECO, participate in a uniform noncontributory defined benefit retirement plan covering substantially all regular NU system employees. Benefits are based on years of service and the employees' highest eligible compensation during 60 consecutive months of employment.

NNECO's portion of the NU system's total pension credit, part of which was credited to utility plant, was

$53.6 million in 2001. NNECO's portion of the NU system's total pension cost, part of which was charged to utility plant, was $8.9 million in 2000.

Currently, NNECO's policy is to annually fund an amount at least equal to that which will satisfy the requirements of the Employee Retirement Income Security Act and the Internal Revenue Code.

The NU system companies, including NNECO, also provide certain health care benefits, primarily medical and dental, and life insurance benefits through a benefit plan to retired employees. These benefits are available for employees retiring from the NU system who have met specified service requirements. For current employees and certain retirees, the total benefit is limited to two times the 1993 per retiree health care cost. These costs are charged to expense over the estimated work life of the employee. The NU 19B

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31. 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS system companies annually fund postretirement costs through external trusts with amounts that have been rate-recovered and which also are tax deductible.

Pension and trust assets are invested primarily in domestic and international equity securities and bonds.

The following table represents information on the plans' benefit obligation, fair value of plan assets, and the respective plans' funded status:

At December 31, Pension Benefits Postretirement Benefits (Millions of Dollars) 2001 2000 2001 2000 Change in benefit obligation Benefit obligation at beginning of year........................

$(199.9)

$(190.0)

$(25.7)

$ (22.4)

Service cost......................................

(2.3)

(8.9)

(0.4)

(1.5)

Interest cost.....................................

(10.7)

(14.4)

(1.8)

(1.9)

Transfers......................

0.2 (6.5)

Actuarial loss....................................

(8.2)

(0.9)

(11.3)

(1.6)

Benefits paid....................................

39.3 20.8 2.1 1.7 Settlements and other......................

37.0 11.9 Benefit obligation at end of year................................

$(144.6)

$(199.9)

$(25.2)

$ (25.7)

Change in plan assets Fair value of plan assets at beginning of year........................

$137.4

$152.2

$15.7

$ 14.5 Actual return on plan assets.............

(5.4)

(0.5)

(1.9) 0.8 Employer contribution......................

2.1 Transfers..........................................

(0.2) 6.5 Benefits paid....................................

(39.3)

(20.8)

(2.1)

(1.7)

Fair value of plan assets at end of year................................

$ 92.5

$137.4

$11.7

$ 15.7 Funded status at December 31........

$ (52.1)

$ (62.5)

(13.5)

$ (10.0)

Unrecognized transition (asset)/obligation............................

(0.8)

(1.1) 3.3 Unrecognized prior service cost.......

9.3 Unrecognized net loss/(gain)...........

3.5 (22.7) 4.9 6.7 Accrued benefit cost......................

$(49.4)

$ (77.0)

$ (8.6)

The following actuarial assumptions were used in calculating the plans' year end funded status:

At December 31, Pension Benefits Postretirement Benefits 2001 2000 2001 2000 Discount rate....................................

7.25%

7.50%

7.25%

7.50%

Compensation/progression rate.......

4.25 4.50 4.25 4.50 Health care cost trend rate (a).........

N/A N/A 11.00 5.26 (a)

The annual per capita cost of covered health care benefits was assumed to decrease to 5.00 percent by 2007.

19C

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS The components of net periodic benefit (credit)/cost are:

For the Years Ended December 31, Pension Benefits Postretirement Benefits (Millions of Dollars) 2001 2000 2001 2000 Service cost......................................

$ 2.3

$ 8.9

$ 0.4

$1.5 Interest cost......................................

10.7 14.4 1.8 1.9 Expected return on plan assets........

(11.4)

(13.0)

(1.4)

(1.2)

Amortization of unrecognized net transition (asset)/obligation............

(0.2)

(0.1) 0.1 0.3 Amortization of prior service cost.....-

0.8 Amortization of actuarial gain...........

(1.9)

(2.1)

Other amortization, net.....................-

0.2 (0.4)

Settlements and other......................

(53.1) 3.3 Net periodic benefit (credit)/cost.

$(53.6)

$ 8.9

$ 4.4

$2.1 For calculating pension and postretirement benefit costs, the following assumptions were used:

For the Years Ended December 31, Pension Benefits Postretirement Benefits 2001 2000 2001 2000 Discount rate....................................

7.50%

7.75%

7.50%

7.75%

Expected long-term rate of return....

9.50 9.50 N/A N/A Compensation/progression rate..........

4.50 4.75 4.50 4.75 Long-term rate of return Health assets, net of tax.................

N/A N/A 7.50 7.50 Life assets......................................

N/A N/A 9.50 9.50 Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The effect of changing the assumed health care cost trend rate by one percentage point in each year would have the following effects:

One Percentage One Percentage (Millions of Dollars)

Point Increase Point Decrease Effect on total service and interest cost components.....................

$0.1

$(0.1)

Effect on postretirement benefit obligation..............

$0.2

$(0.2) 19D The trust holding the health plan assets is subject to federal income taxes.

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY FOR THE YEAR ENDED DECEMBER 31, 2001 SCHEDULE XV COMPARATIVE INCOME STATEMENT ACCOUNT DESCRIPTION 2001 2000 (Thousands of Dollars)

INCOME 457 Services rendered to associate companies 458 Services rendered to nonassociate companies 421 Miscellaneous income or loss Total Income 97,479 29,270 239 126,988 EXPENSE Nuclear Power Expenses 517 Operation Supervision and Engineering 519 Coolants and Water 520 Steam Expenses 523 Electric Expenses 524 Miscellaneous Nuclear Power Expenses 525 Rents 528 Maintenance Supervision and Engineering 529 Maintenance of Structures 530 Maintenance of Reactor Plant Equipment 531 Maintenance of Electric Plant 532 Maintenance of Miscellaneous Nuclear Plant Transmission Expenses 560 Operation Supervision and Engineering 562 Station Expenses 566 Miscellaneous Transmission Expenses 568 Maintenance Supervision and Engineering 569 Maintenance of Structures 570 Maintenance of Station Equipment Administrative and General Expenses 920 Salaries and wages 921 Office supplies and expenses 922 Administrative expense transferred-credit 923 Outside services employed 924 Property insurance 925 Injuries and damages 926 Employee pensions and benefits 928 Regulatory commission expense 930.1 General advertising expenses 930.2 Miscellaneous general expenses 931 Rents 935 Maintenance of structures and equipment All other expenses 403 Depreciation and amortization expense 408 Taxes other than income taxes 409 Income taxes 410 Provision for deferred income taxes 411.5 Provision for deferred income taxes-credit 411.6 Investment tax credit 426.1 Donations 426.5 Other deductions 427 Interest on long-term debt 430 Interest on debt to associate companies 431 Other interest expense Total Expense Net Income 13,381 1,586 9,355 (195) 18, 037 691 7,106 3,861 34,776 5,145 120 339 5,925 909 919 (4,763)

(371) 23,921 9

(11) 574 46 206 5,588 (5,105) 10,891 (7,424)

(16) 96 526 98 114 241 126,575 413 46,801 4,587 25,244 109 7 1,654 3,995 28,717 14,780 33,491 29,112 1,272 1,365 15,187 3,219 13,016 (1,511) 1,938 21,261 43 388 2,492 172 1,119 11,288 2,354 8,785 (13,096)

(65) 27 620 546 1,592 935 331,437 1,749

-20 280,596 51,379 1,211 333,186

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 ANALYSIS OF BILLING ASSOCIATE COMPANIES ACCOUNT 457 DIRECT INDIRECT COMPENSATION TOTAL COSTS COSTS FOR USE AMOUNT NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED (Thousands of Dollars) 457-1 457-2 457-3 The Connecticut Light and Power Company Western Massachusetts Electric Company Public Service Company of New Hampshire TOTAL 79,806 13,467 2,037

$ 95,310 1,750 81,556 410 9

2,169 13,877 2,046 97,479 ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 ANALYSIS OF BILLING NONASSOCIATE COMPANIES ACCOUNT 458 DIRECT INDIRECT COMPENSATION EXCESS TOTAL COSTS COSTS FOR USE TOTAL OR AMOUNT NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COSTS DEFICIENCY BILLED (Thousands of Dollars)

Central Maine Power Company Central Vermont Public Service Montaup Electric Co.

New England Power Co.

United Illuminating Company Fitchburg Gas & Electric Co.

Chicopee Municipal Electric Massachusetts Municipal Wholesale Lyndonville Electric Department Connecticut Municipal Electric Coop Vermont Electric Gen.

& Trans.

458-1 2,298 1,592 3,639 11,241 3,384 199 1,251 4,234 45 963 326 29,172 458-2 458-3 8

5 12 38 1i 1

4 15 3

1 98 458-4 2,306 1,597 3,651 11,279 3,395 200 1,255 4,249 45 966 327 29,270 2,306 1,597 3,651 11,279 3,395 200 1,255 4,249 45 966 327 29,270 INSTRUCTIONS:

Provide a brief description of the services rendered to each nonassociate company:

The Company acts as agent in operating Millstone Unit 3 for the nonassociate companies.

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY CO14PANY For the Year Ended December 31, 2001 SCHEDULE XVI ANALYSIS OF CHARGES FOR SERVICE ASSOCIATE AND HONASSOCIATE COMPANIES ASSOCIATE COMPANY CHARGES NON3LSSOCIATr COMPANY CHARGES ACCOUNT DIRECT NURMBER DESCRIPTION OF.ITEMS COST Nuclear Power Expenses 511 OPERATION SUPERVISION AND ENGINEERING 10,980 519 COOLANTS AND WATER 1,289 520 STEAM EXPENSES 7,465 523 ELECTRIC EXPENSES (157) 524 MISCELLANEOUS NUCLEAR POWER EXPENSES 14,780 525 RENTS 328 528 MAINTENANCE SUPERVISION AND ENGINEERING 5,419 529 MAINTENANCE OF STRUCTURES 2,993 530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 24,153 531 MAINTENANCE OF ELECTRIC PLANT 3,880 532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT 109 Transmission Expenses 560 OPERATION SUPERVISION AND ENGINEERING 562 STATION EXPENSES 27 566 MISCELLANEOUS TRANSMISSION EXPENSES 568 MAINTENANCE SUPERVISION AND ENGINEERING 569 MAINTENANCE OF STRUCTURES 570 MAINTENANCE OF STATION EQUIPMENT Administrative and General Expenses 920 SALARIES AND WAGES 5,050 921 OFFICE SUPPLIES AND EXPENSES 759 922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 923 OUTSIDE SERVICES EMPLOYED 759 924 PROPERTY INSURANCE (4,154) 925 INJURIES AND DAMAGES (366) 926 EMPLOYEE PENSIONS AND BENEFITS 19.110 928 REGULATORY COMMISSION EXPENSE 8

930.1 GENERAL ADVERTISING EXPENSES 930.2 MISCELLANEOUS GENERAL EXPENSES (10) 931 RENTS 477 935 MAINTENANCE OF STRUCTURES AND EQUIPMENT 39 All other' expenses 403 DEPRECIATION AND AMORTIZATION EXPENSES 172 408 TAXES OTHER THAN INCOME TAXES 4,646 409 INCOME TAXES (5,105) 410 PROVISION FOR DEFERRED INCOME TAXES 10,891 411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT (7,424) 411.5 INVESTMENT TAX CREDIT (16) 426.1 DONATIONS 80 426.5 OTHER DEDUCTIONS 441 427 INTEREST ON LONG-TERM DEBTS 430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 431 OTHER INTEREST EXPENSE 241 SUBTOTAL EXPENSES =

COMPENSATION FOR USE OF CAPITAL=

427 INTEREST ON LONG-TERM DEBTS 430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 431 OTHER INTEREST EXPENSE 525 RENTS TOTAL EXPENSES =

421 MISCELLANEOUS INCOME - CREDIT NET INCOME TOTAL COST OF SERVICE INSTRUCTION: Total cost of service will equal for associate and nonassociate companies the total amount billed under their separate analysis of billing schedules.

INDIRECT DIRECT INDIRECT COST TOTAL COST COST TOTAL 10,980 1,289 7,465 (157) 14,780 328 5,419 2.993 24,153 3.880 109 (Thousands of Dollars) 5 2,401 297 1,890 (38) 3,257 57 1,687 868 10,623 1,265 11 27 312 5.050 759 759 (4,154)

(366) 19,110 8

(10) 477 39 172 4,646 (5,105) 10,891 (7,424)

(16) 80 441 242 96,864 98 114 208 97,284 (218) 413 96,864 (218) 4, 2,401 297 1,890 (38) 3,257 57 1,687 868 10,623 1,265 11 312 875 150 160 609)

(5W 811 (1) 97 7

34 942 16 85 29.193 DI C

TOTAL CHARGES FOR SERVICE RECT INDIRECT OST COST TOTAL 13,381 1.586 9,355 (195) 10,037 385 7,106 3.861 34,776 5,145 120 339 875 5,925 150 909 160 919 (609)

(4,763)

(5)

(371) 4,811 23,921 1

9

-(1)

(Ii) 97 574 7

46 34 206 942 5,588 S-(5,105) 10,891 (7,424)

(16) 16 96 85 526 241 29,193 126,057 29,291 (21)

(21) 13,381 1,586 9,355 (1952 1Q,037 385 7.106 3,861 34, 776 5.145 120 339 5,925 909 919 (4,763)

(371) 23,921 9

(11) 574 46 206 5,588 (5,105) 10,891 (7,424)

(16) 96 526 241 126,057 (239) 96,646 S

97,479 29,172 29,270 125,818 S

98 114 306 126,575 (239) 413 126.749 I I ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XVII SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION DEPARTMENT OR SERVICE FUNCTION ACCOUNT TOTAL MILLSTONE MILLSTONE MILLSTONE NUMBER DESCRIPTION OF ITEMS AMOUNT OVERHEAD UNIT #1 UNIT #2 UNIT #3 Nuclear Power Expenses 517 OPERATION SUPERVISION AND ENGINEERING 519 COOLANTS AND WATER 520 STEAM EXPENSES 523 ELECTRIC EXPENSES 524 MISCELLANEOUS NUCLEAR POWER EXPENSES 525 RENTS 528 MAINTENANCE SUPERVISION AND ENGINEERING 529 MAINTENANCE OF STRUCTURES 530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 531 MAINTENANCE OF ELECTRIC PLANT 532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT Transmission Expenses 560 OPERATION SUPERVISION AND ENGINEERING 562 STATION EXPENSES 566 MISCELLANEOUS TRANSMISSION EXPENSES 568 MAINTENANCE SUPERVISION AND ENGINEERING 569 MAINTENANCE OF STRUCTURES 570 MAINTENANCE OF STATION EQUIPMENT Administrative and General Expenses 920 SALARIES AND WAGES 921 OFFICE SUPPLIES AND EXPENSES 922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 923 OUTSIDE SERVICES EMPLOYED 924 PROPERTY INSURANCE 925 INJURIES AND DAMAGES 926 EMPLOYEE PENSIONS AND BENEFITS 928 REGULATORY COMMISSION EXPENSE 930.1 GENERAL ADVERTISING EXPENSES 930.2 MISCELLANEOUS GENERAL EXPENSES 931 RENTS 935 MAINTENANCE OF STRUCTURES AND EQUIPMENT All other expenses 403 DEPRECIATION AND AMORTIZATION EXPENSES 408 TAXES OTHER THAN INCOME TAXES 409 INCOME TAXES 410 PROVISION FOR DEFERRED INCOME TAXES 411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT 411.5 INVESTMENT TAX CREDIT 426.1 DONATIONS 426.5 OTHER DEDUCTIONS 427 INTEREST ON LONG-TERM DEBTS 430 INTEREST ON DEBT TO ASSOCIATE COMPANIES 431 OTHER INTEREST EXPENSE TOTAL EXPENSES

=

INSTRUCTIONS: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System:

Uniform System of Accounts) 13,381 1,586 9,355 (195) 18,037 691 7,106 3,861 34,776 5,145 120 (Thousands of Dollars)

(11)

(37)

(29) 306 1

(17) 9 (71)

(35) 14 5,817 656 3,812 (77) 8,097 194 1,856 1,138 1,633 1,226 72 339 5,925 909 919 (4,763)

(371) 23,921 9

(11) 574 46 206 5,588 (5,105) 10,891 (7,424)

(16) 96 526 98 114 241 98 114 16 20 (1,216)

(250)

(981)

(47)

(2,552) 5,445 (3,712)

(8) 5 (3,336) 38,814 90,579 126,575 518 2,611 425 571 (1,644)

(110) 9,865 4

(7) 270 22 100 2,689 (2,552) 5,446 (3,712)

(8) 45 254 121 7,575 930 5,580 (118) 9,969 190 5,267 2,714 33,214 3,954 34 339 3,298 484 328 (1,903)

(11) 15,037 5

(4) 304 24 106 2,946 (1) 51 267 120

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XVII KEYS FOR SERVICE FUNCTIONS SERVICE FUNCTION The individual unit for which NNECOprovides service is listed separately on Page 24. KEYS

I I ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 DEPARTMENTAL ANALYSIS OF SALARIES NAME OF DEPARTMENT Indicate each dept.

or service function.

MILLSTONE UNIT #1 MILLSTONE UNIT #2 MILLSTONE UNIT #3 DEPARTMENTAL SALARY EXPENSE INCLUDED IN AMOUNTS BILLED TO TOTAL PARENT OTHER NON AMOUNT COMPANY ASSOCIATES ASSOCIATES (Thousands of Dollars) 413 413 14,174 14,174 29,969 20,527 9,442 44,556 35,114 9,442 NUMBER OF PERSONNEL END OF YEAR

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service.

RELATIONSHIP "A"-ASSOCIATE "NA" -NON FROM WHOM PURCHASED ADDRESS ASSOCIATE AMOUNT (Thousands of Dollars)

ENGINEERING SERVICES DUKE ENGINEERING & SERVICES, INC ENERCON SERVICES, INC NORTHEAST GENERATION SERVICES

SECORE, L.L.C.

STEVENSON & ASSOCIATES STONE & WEBSTER INC WESTINGHOUSE ELECTRIC CO.,

LLC MISCELLANEOUS (12 PAYEES)

TOTAL ENGINEERING SERVICES LEGAL SERVICES MISCELLANEOUS (2 PAYEES)

TOTAL LEGAL SERVICES TEMPORARY EMPLOYMENT SERVICES THE NUCON GROUP MISCELLANEOUS (1 PAYEE)

TOTAL TEMPORARY EMPLOYMENT SERVICES WATER TREATMENT SERVICES

IONICS, INC MISCELLANEOUS (1 PAYEE)

NA NA A

NA NA NA NA NA NA 224 100 1,085 132 187 5,662 ill 133 7,634 42 42 154 3

157 219 66 285 NA NA NA NA TOTAL WATER TREATMENT SERVICES I I ANNUAL REPORT OF NORTHEAST.NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.

If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service.

RELATIONSHIP "A"-ASSOCIATE "NA"-NON FROM WHOM PURCHASED ADDRESS ASSOCIATE AMOUNT COMPUTERS SERVICES SCIENTECH INC MISCELLANEOUS (3

PAYEES)

NA NA TOTAL COMPUTER SERVICES OTHER SERVICES BARTLETT SUPPORT SERVICES, INC.

CALDON, INC.

CANNON SLINE, INC.

CARLIN CONTRACTING COMPANY INC DAY & ZIMMERMANN INTERNATIONAL, INC.

DURATEK CHEM-NUCLEAR SYSTEMS ENTERGY OPERATIONS INC EXECUTIVE CONSULTING INC GENERAL ELECTRIC COMPANY GLOBAL NUCLEAR FUEL -

AMERICA GTS DURATEK HEWITT ASSOCIATES IKON OFFICE SOLUTIONS, INC LEE HECHT HARRISON INC METCALF & EDDY NILSSON & ASSOCIATES, LLC PERFORMANCE ABATEMENT SERVICES PERFORMANCE CONTRACTING INC PRICE WATERHOUSE COOPERS LLP STUDSVIK PROCESSING FACILTIY, LLC TRS STAFFING SOLUTIONS INC UNITED STATES NUCLEAR REGULATORY COMMISSION WHITE & CASE, LLP MISCELLANEOUS (169 PAYEES)

TOTAL OTHER SERVICES NORTHEAST UTILIITES SERVICE COMPANY (Supplies centralized accounting, administrative, data processing, engineering, financial, legal, operational, planning, purchasing, and other services)

NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA A

GRAND TOTAL 158 87 245 197 211 127 1,813 135 663 1,113 507 205 200 931 104 400 186 167 438 192 1,567 163 253 177 109 1,009 2,061 12,928 448 21,739

-27A-

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED FOR PAYEES GREATER THAN $100,000 PAYEE NAME DESCRIPTION OF SERVICES RENDERED ENGINEERING SERVICES DUKE ENGINEERING

& SERVICES, INC ENERCON SERVICES INC NORTHEAST GENERATION SERVICES

SECORE, L.L.C.

STEVENSON & ASSOCIATES STONE & WEBSTER INC WESTINGHOUSE ELECTRIC CO TEMPORARY EMPLOYMENT SERVICES THE NUCON GROUP WATER TREATMENT SERVICES

IONICS, INC COMPUTER SERVICES SCIENTECH, INC OTHER SERVICES BARTLETT SUPPORT SERVICES, INC CALDON INC CANNON SLINE, INC CARLIN CONTRACTING COMPANY INC DAY & ZIMMERMANN INTERNATIONAL, INC DURATEK CHEM-NUCLEAR SYSTEMS ENTERGY OPERATIONS INC EXECUTIVE CONSULTING INC GENERAL ELECTRIC COMPANY GLOBAL NUCLEAR FUEL -

AMERICA GTS DURATEK HEWITT ASSOCIATES IKON OFFICE SOLUTIONS INC LEE HECHT HARRISON INC METCALF & EDDY NILSSON & ASSOCIATES, LLC PERFORMANCE ABATEMENT SERVICES PERFORMANCE CONTRACTING INC PRICE WATERHOUSE COOPERS LLP STUDSVIK PROCESSING FACILTIY, LLC TRS STAFFING SOLUTIONS INC US NUCLEAR REGULATORY COMMISSION WHITE & CASE, LLP ENGINEERING SUPPORT FOR THE MILLSTONE DESIGN ENGINEERING GROUP PROVIDE A FINAL SAFETY ANALYSIS REPORT PROVIDE SUPPORT FOR ANALYSIS OF MILLSTONE WATER INTAKE PROVIDE ENGINEERING SERVICES PROVIDE TRAINING AND SOFTWARE SUPPORT FOR MP3 PASSPORT PROVIDE INSTALLATION FOR U2 CHEM FLOORING AND SERVICE TO INSULATE THE 2' COPPER DOMESTIC WATER LINE BETWEEN THE FIRE WATER STORGAE TANKS AND THE FIRE PUMP HOSE PROVIDE SUPPORT FOR ACCUMULATOR CHECK VALVE TESTING AT MILLSTONE 3 FURNISH TEMPORARY LABOR SERVICES PROVIDE DEMINERALIZED WATER SERVICE FOR MILLSTONE 2

CONSULTING SERVICES; MP2BOM -

PARTS EVALUATION; 2001 RAPID INFORMATION SYS PROVIDE PROFESSIONAL SERVICES FOR SCAFFOLD SUPPORT FOR REFUELING OUTAGE PROJECT PROVIDE PROFESSIONAL SERVICES FOR FLOMMETERS PROVIDE PROFESSIONAL SERVICES FOR UNIT #3 MAIN CONDENSOR A & B (PLASTACOR)

PROVIDE CONSTRUCTION SUPPORT, SLMS REPLACEMENT, HVAC PROJECT PROVIDE CONSULTING SERVICES FOR MILLSTONE TRANSITION MANAGEMENT PROVIDE BURIAL COSTS DECOMMISSION FEES; MONTHLY FEES PROVIDE EXECUTIVE CONSULTING SERVICES PROVIDE SERVICES FOR THE MERCHANT TRANSMISSION STUDY PROVIDE SERVICES FOR THE MILLSTONE FUEL ROD ACCOUNTABILITY PROJECT PROVIDE SERVICES FOR NUCLEAR WASTE DISPOSAL PROVIDE CONSULTING SERVICES FOR THE RETIREMENT DELIVERY REVIEW PROJECT PROVIDE COPIER SERVICES PROVIDE PROFESSIONAL SERVICES PROVIDE CONSULTING SERVICES FOR PHASE II

& III ENVIRONMENTAL INVESTIGATION PROVIDE OUTAGE MANAGEMENT TEAM BUILDING SUPPORT PROVIDE INSULATION AND ASBESTOS ABATEMENT PROVIDE SCAFFOLDING SERVICES FROM BARTLETT SUPPORT SERVICES PROVIDE CONSULTING SERVICES FOR NORTHEAST UTILITIES' STRATEGIC ENVIRONMENTAL PLAN PROVIDE SERVICES FOR NUCLEAR WASTE DISPOSAL PROVIDE DECOMMISSIONING SUPPORT PROVIDE NRC INSPECTIONS PROVIDE LEGAL SUPPORT FOR DIVESTITURE

-27B-

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 EMPLOYEE PENSIONS AND BENEFITS ACCOUNT 926 INSTRUCTIONS: Provide a listing of each pension plan and benefit program provided by the service company.

Such listing should be limited to $25,000.

DESCRIPTION AMOUNT (Thousands of Dollars)

Pension Plan Supplemental Retirement and Savings Plan Post Retirement Medical Benefit -

FAS 106 Early Retirement Program Group Life, Long-term Disability, Hospital and Medical Insurance Expenses Other Employee Benefits Expenses TOTAL 1,721 889 688 14,056 6,570 (3) 23,921 I I

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 GENERAL ADVERTISING EXPENSES ACCOUNT 930.1 INSTRUCTIONS:

Provide a listing of the amount included in Account 930.1, "General Advertising Expenses," classifying the items according to the nature of the advertising and as defined in the account definition. If a particular class includes an amount in excess of $3,000 applicable to a single payee, show separately the name of the payee and the aggregate amount applicable thereto.

DESCRIPTION NAME OF PAYEE AMOUNT To----------------------------------

(Thousands of Dollars)

TOTAL ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 MISCELLANEOUS GENERAL EXPENSES ACCOUNT 930.2 INSTRUCTIONS:

Provide a listing of the amount included in Account 930.2, "Miscellaneous General Expenses," classifying such expenses according to their nature. Payments and expenses permitted by Sections 321(b) (2) of the Federal Election Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C.

441(b)(2)) shall be separately classified.

DESCRIPTION AMOUNT (Thousands of Dollars)

Services billed from Northeast Utilities Service Company (an associate company)

(22)

Other miscellaneous expenses 11 TOTAL (11) 1.

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 RENTS INSTRUCTIONS:

Provide a listing of the amount included in "Rents,"

classifying such expenses by major groupings of proper as defined in the account definition of the Uniform System of Accounts.

TYPE OF PROPERTY AMOUNT (Thousands of Dollars)

Buildings/office space 19 Computer/office equipment 98 Vehicles 277 Simulator 574 Services billed from Northeast Utilities Service Company (an associate company) 573 TOTAL 1,541 ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 TAXES OTHER THAN INCOME TAXES ACCOUNT 408 INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than Income Taxes." Separate the analysis into two groups:

(1)Other than U.S. Government taxes, and (2)

U.S.

Government taxes. Specify each of the various kinds of taxes and show the amounts thereof. Provide a subtotal for each class of tax.

KIND OF TAX AMOUNT (Thousands of Dollars)

(1) Other Than U.S. Government Taxes:

Connecticut Unemployment Connecticut Insurance Premium Excise Tax Local property Connecticut Sales Tax Miscellaneous (7 items)

Sub-Total 131 12 282 11 4

440 (2)

U.S. Government Taxes:

Federal Insurance Contribution Act Medicare Tax Federal Unemployment Sub-Total TOTAL 4,067 977 104 5,148 5,588 ANNUAL REPORT OF.NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 DONATIONS ACCOUNT 426.1 INSTRUCTIONS:

Provide a listing of the amount included in Account 426.1, "Donations,"

classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details.

NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT (Thousands of Dollars)

Salvation Army Charitable contribution 6

Sea Research Foundation, Inc.

Charitable contribution 90 TOTAL 96 INSTRUCTIONS:

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 OTHER DEDUCTIONS ACCOUNT 426.5 Provide a listing of the amount included in Account 426.5, "Other Deductions," classifying such expenses according to their nature.

DESCRIPTION NAME OF PAYEE AMOUNT (Thousands of dollars)

Executive incentive compensation plan Various Officers Services billed from Northeast Utilities Service Company (an associate company)

Communication services Miscellaneous (8 payees)

TOTAL 8

526 $

75 443

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY For the Year Ended December 31, 2001 SCHEDULE XVIII NOTES TO STATEMENTS OF INCOME INSTRUCTIONS:

The space below is provided for important notes regarding the financial statements of income or any account thereof.

Furnish particulars as to any significant increases in services rendered or expenses incurred during the year.

Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

See Notes to Financial Statements on pages 19 through 19D.

Annual Report of Northeast Nuclear Energy Company Organization Chart (As of December 31, 2001)

President and Chief Executive Officer-Nuclear On March 31, 2001, CL&P and WMECO consummated the sale of Millstone 1 and 2 to a subsidiary of Dominion Resources, Inc.,

Dominion Nuclear Connecticut, Inc. (DNCI). CL&P, PSNH and WMECO sold their ownership interests in Millstone 3 to DNCI. II

NORTHEAST NUCLEAR ENERGY COMPANY METHODS OF ALLOCATION For the year ended December 31, 2001 During 2001, Millstone Unit 1 was being decommissioned.

However, the costs associated with Millstone units 2 and 3 were billed directly or allocated using one of four methods.

The allocation methods used through the sale date of March 31,2001 are as follows:

1. One-third to each unit

2.

Number of employees

3.

Net capacity of each unit

4.

Customized-supported by local management I I ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED The following annual statement was supplied to each associate company in support of the amount of compensation for use of capital billed during 2001:

In accordance with Instruction 01-12 of the Securities and Exchange Commission's Uniform System of Accounts for Mutual Service Companies and Subsidiary Service Companies, Northeast Nuclear Energy Company submits the following information on the billing of interest on borrowed funds and a return on equity capital to associated companies for the year 2001:

(A)

Amount of compensation for use of capital billed to (See Note)

(B)

The basis for billing of interest and return on equity capital to the associated companies is based on the percentage ownership of the individual units.

NOTE:

For the associate companies and amounts, see "Analysis of Billing Associate Companies" on page 21.

ANNUAL REPORT OF NORTHEAST NUCLEAR ENERGY COMPANY SIGNATURE CLAUSE Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Conmmission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned office thereunto duly authorized.

NORTHEAST NUCLEAR ENERGY COMPANY (Name of Reporting Company)

By: Is! John P. Stack (Signature of Signing Officer)

John P. Stack, Vice President - Accounting and Controller (Printed Name and Title of Signing Officer)

Date: April 24, 2002 Form U-13-60 Mutual and Subsidiary Service Companies Revised February 7, 1980 ANNUAL REPORT FOR THE PERIOD Beginning January 1, 2001 and ending December 31, 2001 TO THE U.S. SECURITIES AND EXCHANGE COMMISSION OF North Atlantic Energy Service Corporation A Subsidiary Service Company Date of Incorporation: April 1, 1992 State or Sovereign Power under which Incorporated or Organized:

New Hampshire Location of Principal Executive Offices of Reporting Company:

Route 1, Lafayette Rd., Seabrook, NH, 03874 Name, title and address of officer to whom correspondence concerning this report should be addressed:

John P. Stack V.P. & Controller P.O. Box 270, Hartford, Ct. 06141-0270 Name of Principal Holding Company Whose Subsidiaries are served by Reporting Company:

Northeast Utilities SEC 1926 (6-82)

INSTRUCTIONS FOR USE ON FORM U-13-60 I.

TIME OF FILING Rule 94 provides that on or before the first day of May in each calendar year, each mutual service company and each subsidiary service company as to which the Commission shall have made a favorable finding pursuant to Rule 88, and every service company whose application for approval or declaration pursuant to Rule 88 is pending shall file with the Commission an annual report on Form U-13-60 and in accordance with the instructions for that form.

2.

NUMBER OF COPIES Each annual report shall be filed in duplicate.

The company should prepare and retain at least one extra copy for itself in case correspondence with reference to the report becomes necessary.

3.

PERIOD COVERED BY REPORT The first report filed by any company shall cover the period from the date the Uniform System of Accounts was required to be made effective as to that company under Rules 82 and 93 to the end of that calendar year.

Subsequent reports should cover a calendar year.

4.

REPORT FORMAT Reports shall be submitted on the forms prepared by the Commission.

If the space provided on any sheet of such form is inadequate, additional sheets may be inserted on the same size as a sheet of the form or folded to such size.

5.

MONEY AMOUNTS DISPLAYED All money amounts required to be shown in financial statements may be expressed in whole dollars, in thousands of dollars or hundreds thousands of dollars, as appropriate, and subject to provisions of Regulation S-X (§210.3-0.1(b)).

6.

DEFICITS DISPLAYED Deficits and other like entries shall be indicated by the use of either brackets or a parenthesis with corresponding reference in footnotes.

(Regulation S-X (§210.3-0.1(c)).

7.

MAJOR AMENDMENTS OR CORRECTIONS Any company desiring to amend or correct a major omission or error in a report after it has been filed with the Commission shall submit an amended report including only those pages, schedules, and entries that are to be amended or corrected.

A cover letter shall be submitted requesting the Commission to incorporate the amended report changes and shall be signed by a duly authorized officer of the company.

8.

DEFINITIONS Definitions contained in Instruction 01-8 to the Uniform System of Accounts for Mutual Service Companies and Subsidiary Companies, Public Utility Holding Company Act of 1935, as amended by February 2, 1979 shall be applicable to words or terms used specifically within this Form U-13-60.

9.

ORGANIZATION CHART The service company shall submit with each annual report a copy of its current organization chart.

10.

METHODS OF ALLOCATION The service company shall submit with each annual report a listing of the currently effective methods of allocation being used by the service company and on file with the Securities and Exchange Commission pursuant to the Public Utility Holding Company Act of 1935.

11.

ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED The service company shall submit with each annual report a copy of the annual statement supplied to each associate company in support of the amount of compensation for use in capital billed during the calendar year.

LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS Description of Schedules and Accounts COMPARATIVE BALANCE SHEET SERVICE COMPANY PROPERTY ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICE COMPANY INVESTMENTS ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES FUEL STOCK EXPENSES UNDISTRIBUTED STORES EXPENSE UNDISTRIBUTED MISCELLANEOUS CURRENT AND ACCRUED ASSETS MISCELLANEOUS DEFERRED DEBITS

RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES PROPRIETARY CAPITAL LONG-TERM DEBT CURRENT AND ACCRUED LIABILITIES NOTES TO FINANCIAL STATEMENTS COMPARATIVE INCOME STATEMENT ANALYSIS OF BILLING -

ASSOCIATE COMPANIES ANALYSIS OF BILLING -

NONASSOCIATE COMPANIES ANALYSIS OF CHARGES FOR SERVICE -

ASSOCIATE AND NONASSOCIATE COMPANIES SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE FUNCTION DEPARTMENTAL ANALYSIS OF SALARIES OUTSIDE SERVICES EMPLOYED EMPLOYEE PENSIONS AND BENEFITS GENERAL ADVERTISING EXPENSES MISCELLANEOUS GENERAL EXPENSES RENTS TAXES OTHER THAN INCOME TAXES DONATIONS OTHER DEDUCTIONS NOTES TO STATEMENT OF INCOME Schedule or Acct. No.

Schedule I Schedule II Schedule III Schedule IV Schedule V Schedule VI Schedule VII Schedule VIII Schedule IX Schedule X Schedule XI Schedule XII Schedule XIII Schedule XIV Schedule XV Account 457 Account 458 Schedule XVI Schedule XVII Account 920 Account 923 Account 926 Account 930.1 Account 930.2 Account 931 Account 408 Account 426.1 Account 426.5 Schedule XVIII 2

Page No.

4-5 6-7 8

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24-25 26 27 28 29 30 31 32 33 34 35

LISTING OF INSTRUCTIONAL FILING REQUIREMENTS Description of Reports or Statements Page No.

ORGANIZATION CHART 36 METHODS OF ALLOCATION 37 ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED 38 ELECTRIC POWER BROKERING AND MARKETING ACTIVITIES 38A SIGNATURE PAGE 39 3

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION SCHEDULE I -

COMPARATIVE BALANCE SHEET Give balance sheet of the Company as of December 31 of the current and prior year.

S.............................................................................................

ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31 2001 2000 SERVICE COMPANY PROPERTY (Thousands of Dollars)

Service company property (Schedule II)

Construction work in progress (Schedule II)

Total Property Less accumulated provision for depreciation and amortization of service company property (Schedule III)

Net Service Company Property INVESTMENTS Investments in associate companies (Schedule IV)

Other investments (Schedule IV)

Total Investments CURRENT AND ACCRUED ASSETS Cash 2,187 Special deposits Working funds Temporary cash investments (Schedule IV) 17 Notes receivable Accounts receivable 27,245 Accumulated provision of uncollectible accounts Accounts receivable from associate companies (Schedule V) 43 Fuel stock expenses undistributed (Schedule VI)

Materials and supplies Stores expense undistributed (Schedule VII) 13 Prepayments 1,082 Miscellaneous current and accrued assets (Schedule VIII)

Total Current and Accrued Assets 30,587 DEFERRED DEBITS Unamortized debt expense Clearing accounts Miscellaneous deferred debits (Schedule IX) 38,370 Research, development, or demonstration expenditures (Schedule X)

Unamortized loss on reacquired debt Accumulated deferred income taxes 353 Total Deferred Debits 38,723 TOTAL ASSETS AND OTHER DEBITS 69,310 3,078 17 25,586 147 35 1,058 29,921 35,248 35,248 65,169 101 107 108 123 124 131 134 135 136 141 143 144 146 152 154 163 165 174 181 184 186 188 189 190

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION SCHEDULE I -

COMPARATIVE BALANCE SHEET Give balance sheet of the Company as of December 31 of the current and prior year.

ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31 2001 2000 PROPRIETARY CAPITAL (Thousands of Dollars)

Common stock issued (Schedule XI)

Miscellaneous paid-in-capital (Schedule XI)

Appropriated retained earnings (Schedule XI)

Unappropriated retained earnings (Schedule XI)

Total Proprietary Capital LONG-TERM DEBT Advances from associate companies (Schedule XII)

Other long-term debt (Schedule XII)

Unamortized premium on long-term debt Unamortized discount on long-term debt-debit Total Long-Term Debt CURRENT AND ACCRUED LIABILITIES Notes payable Accounts payable Notes payable to associate companies (Schedule XIII)

Accounts payable to associate companies (Schedule XIII)

Taxes accrued Interest accrued Dividends declared Tax collections payable Miscellaneous current and accrued liabilities (Schedule XIII)

Total Current and Accrued Liabilities DEFERRED CREDITS Other deferred credits Accumulated deferred investment tax credits Total Deferred Credits ACCUMULATED DEFERRED INCOME TAXES TOTAL LIABILITIES AND PROPRIETARY CAPITAL 1

9 4

14 15,718 6,103 43,271 65,092 4,204 4,204 69,310 201 211 215 216 1

9 223 224 225 226 231 232 233 234 236 237 238 241 242 3

13 18,946 2,478 481 38,626 60,531 4,390 4,390 235 65,169 253 255 282

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE II SERVICE COMPANY PROPERTY BALANCE AT RETIREMENTS BALANCE BEGINNING OR OTHER AT CLOSE DESCRIPTION OF YEAR ADDITIONS SALES CHANGES(1)

OF YEAR (Thousands of Dollars)

SERVICE COMPANY PROPERTY Account 301 ORGANIZATION 303 MISCELLANEOUS INTANGIBLE PLANT 304 LAND AND LAND RIGHTS 305 STRUCTURES AND IMPROVEMENTS 306 LEASEHOLD IMPROVEMENTS 307 EQUIPMENT (2) 308 OFFICE FURNITURE AND EQUIPMENT 309 AUTOMOBILES, OTHER VEHICLES AND RELATED GARAGE EQUIPMENT 310 AIRCRAFT AND AIRPORT EQUIPMENT 311 OTHER SERVICE COMPANY PROPERTY (3)

NONE (1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:

NONE ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE II CONTINUED (2) SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED.

THE SERVICE COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:

S................................................................................................................

SUBACCOUNT DESCRIPTION ADDITIONS OF YEAR (Thousands of Dollars)

NONE (3)

DESCRIBE OTHER SERVICE COMPANY PROPERTY:

NONE

-Lt ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE III ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION OF SERVICE COMPANY PROPERTY ADDITIONS BALANCE AT CHARGED BEGINNING TO DESCRIPTION OF YEAR ACCT 403 RETIREM (Thousands of Account 301 ORGANIZATION 303 MISCELLANEOUS INTANGIBLE PLANT 304 LAND AND LAND RIGHTS 305 STRUCTURES AND IMPROVEMENTS 306 LEASEHOLD IMPROVEMENTS 307 EQUIPMENT 308 OFFICE FURNITURE AND FIXTURES NONE 309 AUTOMOBILES, OTHER VEHICLES AND RELATED GARAGE EQUIPMENT 310 AIRCRAFT AND AIRPORT EQUIPMENT 311 OTHER SERVICE COMPANY PROPERTY OTHER CHANGES BALANCE ADD AT CLOSE ENTS (DEDUCT)1/

OF YEAR Dollars)

AMORTIZATION OF SERVICE COMPANY PROPERTY (1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:

NONE ANNUAL REPORT OF.NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE IV -

INVESTMENTS INSTRUCTIONS:

Complete the following schedule concerning investments.

Under Account 124, "Other Investments,"

state each investment separately, with description, including the name of issuing company, number of shares or principal amount, etc.

Under Account 136, "Temporary Cash Investments,"

list each investment separately.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR ACCOUNT 123 -

INVESTMENT IN ASSOCIATE COMPANIES ACCOUNT 124 -

OTHER-INVESTMENTS ACCOUNT 136 -

TEMPORARY CASH INVESTMENTS Fidelity Institute Tax Exempt Cash Portfolio Citizens Bank Certificate of Deposit TOTAL 13 4

17 13 4

17 I L ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE V -

ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES INSTRUCTIONS:

Complete the following schedule listing accounts receivable from each associate company. Where the service company has provided accommodation or convenience payments for associate companies, a separate listing of total payments for each associate company by subaccount should be provided.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR (Thousands of Dollars)

ACCOUNT 146 -

ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES Northeast Utilities Service Company Northeast Nuclear Energy Company North Atlantic Energy Company Public Service Company of New Hampshire The Connecticut Light and Power Company TOTAL 6

1 127 (4) 17 147 1

37 1

4 43 ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:

NONE INSTRUCTIONS:

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE VI -

FUEL STOCK EXPENSES UNDISTRIBUTED Report the amount of labor and expenses incurred with respect to fuel stock expenses during the year and indicate amount attributable to each associate company. Under the section headed "Summary" listed below, give an overall report of the fuel functions performed by the service company.

DESCRIPTION LABOR EXPENSES TOTAL (Thousands of Dollars)

ACCOUNT 152 -

FUEL STOCK EXPENSES UNDISTRIBUTED NONE ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE VII -

STORES EXPENSE UNDISTRIBUTED INSTRUCTIONS: Report the amount of labor and expenses incurred with respect to stores expense during the year and indicate amount attributable to each associate company.

DESCRIPTION LABOR EXPENSES TOTAL (Thousands of Dollars)

ACCOUNT 163 -

STORES EXPENSE UNDISTRIBUTED Balance at prior year end Amount incurred during the year The above stores expenses are billed back to each of the companies listed below:

Associate Companies The Connecticut Light & Power Company North Atlantic Energy Corporation Nonassociate Companies TOTAL 26 9

35 2,411 (97)

(873)

(1,456) 11 270 (13)

(100)

(164) 2 2,681 (110)

(973)

(1,620) 13

-12

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE VIII MISCELLANEOUS CURRENT AND ACCRUED ASSETS INSTRUCTIONS:

Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR m --------

(Thousands of Dollars)

ACCOUNT 174 -

MISCELLANEOUS CURRENT AND ACCRUED ASSETS NONE ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE IX MISCELLANEOUS DEFERRED DEBITS INSTRUCTIONS:

Provide detail of items in this account. Items less than $10,000 may be grouped, showing the number of items in each group.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR (Thousands of Dollars)

ACCOUNT 186 -

MISCELLANEOUS DEFERRED DEBITS Noncurrent receivable from Joint Owner funding Fairbanks Morse Diesel Settlement Westinghouse Reactor Coolant Pump Settlement Accounting Treatment Change for Payroll Engineering & Supervision Overheads Allocable Performance Pay Miscellaneous (2 items)

Preliminary Engineering for:

Station Support Building Third Diesel Generator CAP System Enhancements Steam Generator Blowdown Waste Gas System Mod Miscellaneous (4 items)

TOTAL 33,767 429 239 43 90 581 67 30 2

35,248 36,632 350 266 209 29 63 1

581 115 67 30 20 7

38,370 ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE X

RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES INSTRUCTIONS:

Provide a description of each material research, development, or demonstration project which incurred costs by the service corporation during the year.

DESCRIPTION AMOUNT (Thousands of Dollars)

ACCOUNT 188 -

RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES NONE I I ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XI PROPRIETARY CAPITAL NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD ACCOUNT SHARES VALUE NUMBER CLASS OF STOCK AUTHORIZED PER SHARE NO.

OF SHARES TOTAL AMOUNT (Thousands of Dollars) 201 COMMON STOCK ISSUED 1,000

$1 1,000

$o INSTRUCTIONS:

Classify amounts in each account with brief explanation, disclosing the general nature of transactions which give rise to the reported amounts.

.DESCRIPTION AMOUNT (Thousands of Dollars)

ACCOUNT 211 -

MISCELLANEOUS PAID-IN-CAPITAL

$9 ACCOUNT 215 -

APPROPRIATED RETAINED EARNINGS TOTAL

$9 INSTRUCTIONS: Give particulars concerning net income or (loss) during the year, distinguishing between compensation for the use of capital owed or net loss remaining from servicing nonassociated per the General Instructions of the Uniform Systems of Accounts. For dividends paid during the year in cash or otherwise, provide rate percentage, amount of dividend, date declared and date paid.

BALANCE AT NET INCOME BALAN BEGINNING OR DIVIDENDS CL DESCRIPTION OF YEAR (LOSS)

PAID OF (Thousands of Dollars)

ACCOuuuT L0-UNAYVKOPRIATED RETAINED EARNINGS TOTAL

$3

$3

$1

$1 CE AT OSE YEAR

$4

$4 ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XII LONG-TERM DEBT INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and advances on open account. Names of associate companies from which advances were received shall be shown under the class and series of obligation column. For Account 224 --

Other long-term debt provide the name of creditor company or organization, terms of obligation, date of maturity, interest

rate, and the amount authorized and outstanding.

BALANCE' BALANCE TERMS OF OBLIG.

DATE AT AT CLASS & SERIES OF INTEREST AMOUNT BEGINNING DEDUCTIONS(3 CLOSE NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS (1)

OF YEAR (Thousands of Dollars)

ACCOUNT 223-ADVANCES FROM ASSOCIATE COMPANIES:

ACCOUNT 224-OTHER LONG-TERM DEBT:

TOTAL OTHER LONG-TERM DEBT NONE NONE ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XIII -

CURRENT AND ACCRUED LIABILITIES INSTRUCTIONS:

Provide balance of notes and accounts payable to each associate company.

Give description and amount of miscellaneous current and accrued liabilities.

Items less than $10,000 may be grouped, showing the number of items in each group.

BALANCE AT BALANCE AT BEGINNING CLOSE DESCRIPTION OF YEAR OF YEAR (Thousands of Dollars)

ACCOUNT 233 -

NOTES PAYABLE TO ASSOCIATE COMPANIES NONE ACCOUNT 234 -

ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES Northeast Utilities Service Company Northeast Nuclear Electric Company Northeast Generation Service Company Public Service Company of New Hampshire TOTAL 2,293 59 74 52 2,478 6,073 14 16 6,103 ACCOUNT 242 -

MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES Accrued payroll and other employee payables Accrued Pension Cost On-hand operations funding from associate companies:

North Atlantic Energy Corporation The Connecticut Light & Power Company On-hand operations funding from non-associate companies TOTAL 3,673 31,893 1,101 124 1,835 38,626 6,609 35,108 559 63 932 43,271

-18

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31,2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS INSTRUCTIONS:

The space below is provided for important notes regarding the financial statements or any account thereof. Furnish particulars as to any significant contingent assets or liabilities existing at the end of the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

1.

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES General: North Atlantic Energy Service Corporation (the Company or NAESCO) is a wholly owned subsidiary of Northeast Utilities (NU). The Connecticut Light and Power Company (CL&P), Public Service Company of New Hampshire (PSNH), and North Atlantic Energy Corporation (NAEC) are electric production and distribution operating subsidiaries which comprise, in part, the Northeast Utilities System (the NU system) and are wholly owned byNU.

NAEC sells all of its entitlement to the capacity and output of the Seabrook Nuclear Power Project (the Project or Seabrook) to PSNH under two life-of-unit, full cost recovery contracts. In addition to its retail service, the NU system furnishes firm and other wholesale electric services to various municipalities and other utilities, and participates in limited retail access programs, which provide off-system retail electric service.

The Company acts as agent in operating the Project pursuant to the Seabrook Project Managing Agent Operating Agreement (the Managing Agent Agreement) and the Seabrook Project Disbursing Agent Agreement (the Disbursing Agent Agreement). The Project is owned jointly by NAEC, CL&P and nine non-affiliated New England utility companies as tenants in common with undivided interests (the Seabrook Joint Owners). The cost of the Project is recorded on the books of the Seabrook Joint Owners based upon their proportionate ownership share of the Project.

The Company does not have an ownership interest in the Project. The Company is only liable for payroll related expenditures and liabilities. The Seabrook Joint Owners are severally responsible for their respective share of the costs of operating and maintaining the Project. This funding is provided to the Company in advance of such costs being incurred.

Ownership percentages of the Project as of December 31, 2001 were as follows:

PARTICIPANTS Canal Electric Company Great Bay Power Corporation Hudson Light & Power Department Little Bay Power Corporation Massachusetts Municipal Wholesale Electric Company New England Power Company New Hampshire Electric Cooperative, Inc.

North Atlantic Energy Corporation Taunton Municipal Lighting Plant The Connecticut Light and Power Company The United Illuminating Company OWNERSHIP SHARE 3.52317%

12.13240 0.07737 2.89989 11.59340 9.95766 2.17391 35.98201 0.10034 4.05985 17.50000 100.0000%

19A

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS

1.

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Other wholly owned subsidiaries of NU provide support services to the Company. Northeast Utilities Service Company (NUSCO) provides certain administrative support to the Company, pursuant to the Service Agreement between NUSCO and NAESCO acting as agent for the Seabrook Joint Owners, as amended, and to other NU system companies. Billings from NUSCO recorded by the Company approximated $5,916,000 and $6,064,000 in 2001 and 2000, respectively. PSNH provides certain services to the Company pursuant to the Service Agreement between PSNH and NAESCO acting as agent for the Seabrook Joint Owners, as amended. Billings from PSNH recorded by the Company were approximately $450,000 and $659,000 in 2001 and 2000,'respectively.

All transactions among affiliated companies are on a recovery of cost basis, which may include amounts representing a return on equity, and are subject to approval of various Federal and state regulatory agencies.

Cash and special deposits: Cash and special deposits include cash on hand and short-term cash investments which are highly liquid in nature and have original maturities of three months or less.

Method of Accounting: The accompanying financial statements were prepared in accordance with the Uniform System of Accounts for Mutual and Subsidiary Service Companies, promulgated pursuant to the Public Utility Holding Company Act of 1935, as modified (1935 Act). This system of accounts follows, with modifications, the Federal Energy Regulatory Commission's (the FERC) Uniform System of Accounts and the Managing Agent Agreement. The financial statements reflect expenses associated with managing, operating, and maintaining the Project, excluding decommissioning costs, property taxes, amortization of nuclear fuel, reserves, and book depreciation. These expenses are recorded by the Joint Owners. Pursuant to the Managing Agent Agreement, NAESCO does not earn a return on capital; therefore, revenues represent the sum of the Company's operating expenses and other deductions, and are recognized as costs are incurred.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Public Utility Regulation: NU and its subsidiaries, including the Company, are registered with the Securities and Exchange Commission as a holding company under the 1935 Act, and it and its subsidiaries, including the Company, are subject to the provisions of the 1935 Act. The Company is a registered utility company in the State of New Hampshire and is subject to appropriate regulation by the New Hampshire Public Utilities Commission (NHPUC).

The Seabrook Joint Owners, whom the Company represents as agent, are subject to further regulation by the FERC.

The Company, therefore, follows the accounting policies prescribed by the FERC.

19B I I

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS

2.

PENSION AND POSTRETIREMENT BENEFITS Pension: Employees of NAESCO are covered by the NU system's uniform noncontributory defined benefit plan covering all of its regular employees.

Benefits are based on years of service and the employees' highest compensation during 60 consecutive months of employment. The Company's allocated portion of the NU system's pension cost for 2001 and 2000, part of which was capitalized and billed as utility plant, approximated $3,216,000 and $2,531,000, respectively.

Currently, the NU system funds annually an amount at least equal to that which will satisfy the requirements of the Employee Retirement Income Security Act and the Internal Revenue Code. There was no funding in 2001 or 2000.

Pension costs are determined using market-related values ofpension assets.

Postretirement Benefits: The Company also provides certain health care benefits, primarily medical and dental, and life insurance benefits through a benefit plan to retired employees (referred to as Statement of Financial Accounting Standard No. 106, "Employers Accounting for Postretirement Benefits Other Than Pensions" (SFAS 106) benefits).

These benefits are available for employees retiring from the Company who have met specified service requirements.

For current employees and certain retirees, the total postretirement benefit is limited to two times the 1993 per retiree health care cost. The postretirement benefit obligation has been calculated based on this assumption. The expected cost of postretirement benefits, primarily health and life insurance benefits are charged to expense during the years that eligible employees render service. The Company is funding its postretirement benefit costs through external trusts. The annually funded amounts are tax deductible under the Internal Revenue Code. Actuarially determined total postretirement benefits, part of which were capitalized and billed as utility plant, approximated

$1,213,000 in 2001 and $707,000 in 2000.

Pension and postretirement benefit assets are invested primarily in domestic and international equity securities and bonds.

19C

~1 ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS

2.

PENSION AND POSTRETIREMENT BENEFITS (Continued)

The components of net cost for the Company (in thousands) are:

As of December 3 1, Change in benefit obligation:

Benefit obligation at beginning of year Service cost Interest cost Transfers Actuarial gain/(loss)

Benefits paid Benefit obligation at end of year Change in plan assets:

Fair value of plan assets at beginning of year Actual return on plan assets Employer contribution Transfers Benefits Paid Fair value of plan assets at end of year Funded status at year end Unrecognized net gain Unrecognized prior service cost Unrecognized net transition obligation Accrued benefit cost Pension Benefits 2001 2000 (86,466)

(4,545)

(6,563) 79 (3,750) 1,662 (99,583) 70,309 (3,240)

(79)

(1,662) 65,328 (34,255)

(8,072) 6,715 504 (35,108)

$ (80,883)

(4,236)

(6,011) 77 899 3,688 (86,466) 74,323 (249)

(77)

(3,688) 70,309 (16,157)

(23,627) 7,324 567 S (31.893)

Postretirement Benefits 2001 2000 (11,730)

(679)

(1,034)

(2,843) 1,569 (14,717) 9,002 (851) 1,226 (4)

(1,569) 7,804 (6,913) 5,189 1,736 12 (9,387)

(546)

(861)

(1,799) 863 (11,730) 8,730 429 706 (863) 9,002 (2,728) 833 1,894 i -

-1)1 The following actuarial assumptions were used in calculating the plan's year-end funded status:

Discount rate Compensation/progression rate Health care cost trend rate (a)

As of December 31, Pension Benefits Postretirement Benefits 2001 2000 2001 2000 7.25%

7.50%

7.25%

7.50%

4.25 4.50 4.25 4.50 N/A N/A 11.00 5.26 (a) The annual growth in per capita cost of covered health care benefits was assumed to decrease to 5.00 percent by 2007.

19D

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS

2.

PENSION AND POSTRETIREMENT BENEFITS (Continued)

The components ofnet periodic benefit cost (in thousands) are:

Service cost Interest cost Expected return on plan assets Amortization of unrecognized net gain Amortization of prior service cost Amortization of unrecognized net transition obligation Other amortization, net Net periodic cost For the Years Ended December 31, Pension Benefits Postretirement Benefits 2001 2000 2001 2000 4,545 4,236 679 546 6,563 6,011 1,034 861 (6,765)

(6,348)

(775)

(697)

(1,799)

(2,040) 609 609 63 3.216 63 158 117 2.531 1213 158 (161)

$__707 For calculating pension and postretirement benefit costs, the following assumptions were used:

Discount rate Expected long-term rate of return Compensation/progression rate Long term rate of return Health assets, net of tax Life assets For the Years Ended December 31, Pension Benefits Postretirement Benefits 2001 2000 2001 2000 7.50%

7.75%

7.50%

7.75%

9.50 9.50 N/A N/A 4.50 4.75 4.50 4.75 N/A N/A N/A N/A 7.50 9.50 7.50 9.50 Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The effect of changing the assumed health care cost trend rate by one percentage point in each year would have the following effects (in thousands):

Effect on total service and interest cost components Effect on accumulated postretirement benefit obligation One Percentage Point Increase 41 287 One Percentage Point Decrease (39)

(280)

The trust holding the health plan assets is subject to Federal income taxes.

19E

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS

3.

LEASES The Company, on behalf of the Seabrook Joint Owners, has entered into operating lease agreements for certain data processing equipment, office equipment, vehicles and offsite facilities. The Company does not enter into capital leases. Operating lease costs charged to expense approximated $1,334,000 and $1,404,000 in 2001 and 2000, respectively.

The provisions of these lease agreements generally provide for renewal options. The Company has no noncancelable leases.

4.

INCOME TAX BENEFIT The components of the Federal and state income tax benefit (in thousands) are:

Current income taxes:

Federal State Total current Deferred income taxes, net:

Federal State For the Years Ended December 31, 2001 2000 600 51 (320)

(383) 280 (332)

(588)

(7)

Total deferred (588)

(7)

Total income tax benefit (308)

(339 All income taxes were charged to or credited to operating expenses in both 2001 and 2000.

Deferred income taxes (in thousands) are comprised of the tax effects of temporary differences as follows:

For the Years Ended December 31, Severance benefits Other deferred tax assets Other deferred tax liabilities Deferred income taxes, net 2001 (536) 154 (206)

(588) 2000 86 (93)

A7) 19F

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XIV NOTES TO FINANCIAL STATEMENTS

4.

INCOME TAX BENEFIT (Continued)

A reconciliation between income tax expense and the expected tax expense at the applicable statutory rate (in thousands) is as follows:

Expected Federal income tax at 35 percent of pretax income Tax effect of differences:

State income taxes, net of federal benefit Other, net Total income tax benefit For the Years Ended December 31, 2001 2000 (108)

(118)

(208) 8

( 3081____

(249) 28 The Company, as a wholly-owned subsidiary of NU, is included in NU's consolidated tax returns. Income tax benefit is determined on a separate company basis.

19G

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION FOR THE YEAR ENDED DECEMBER 31, 2001 SCHEDULE XV COMPARATIVE INCOME STATEMENT ACCOUNT DESCRIPTION 2001 2000 (Thousands of Dollars)

INCOME 457 Services rendered to associate companies 458 Services rendered to nonassociate companies 421 Miscellaneous income or loss Total Income EXPENSE Nuclear Power Expenses 517 Operation Supervision and Engineering 518 Nuclear Fuel Expense 519 Coolants and Water 520 Steam Expenses 523 Electric Expenses 524 Miscellaneous Nuclear Power Expenses 528 Maintenance Supervision and Engineering 529 Maintenance of Structures 530 Maintenance of Reactor Plant Equipment 531 Maintenance of Electric Plant 532 Maintenance of Miscellaneous Nuclear Plant Transmission Expenses 570 Maintenance of Station Equipment Administrative and General Expenses 920 Salaries and wages 921 Office supplies and expenses 922 Administrative expense transferred-credit 923 Outside services employed 924 Property insurance 925 Injuries and damages 926 Employee pensions and benefits 928 Regulatory commission expense 930.1 General advertising expenses 930.2 Miscellaneous general expenses 931 Rents 935 Maintenance of structures and equipment All other expenses 408 Taxes other than income taxes 409 Income taxes 410 Provision for deferred income taxes 411 Provision for deferred income taxes-credit 426.1 Donations 426.5 Other deductions 431 Other interest expense Total Expense Net Income 62,239 93,197 158 155,594 24,553 8,243 2,257 18,630 105 29,409 11,370 2,933 8,532 13,950 510 329 6,107 88 1,937 186 409 19,600 5

13 54 532 454 4,821 280 130 (718) 84 667 123 155,593 1

68,611 102,738 81 171,430 22,723 7,509 2,235 22,156 832 31,226 12,539 3,262 18,301 21,109 853 237 5,242 886 2,022 342 1,378 12,543 6

20 121 732 26 4,583 (332) 337 (344) 145 641 99 171,429 1 -11

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 ANALYSIS OF BILLING ASSOCIATE COMPANIES ACCOUNT 457 DIRECT INDIRECT COMPENSATION TOTAL COSTS COSTS FOR USE AMOUNT NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED (Thousands of Dollars) 457-1 The Connecticut Light and Power Company North Atlantic Energy Corporation TOTAL 6,310 55,929 62,239 457-2 457-3 6,310 55,929

$ 62,239 ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 ANALYSIS OF BILLING NONASSOCIATE COMPANIES ACCOUNT 458 NAME OF NONASSOCIATE COMPANY Canal Electric Company Great Bay Power Corporation Hudson Light & Power Dept.

Little Bay Power Corporation Massachusetts Municipal Wholesale Electric Company New England Power Company New Hampshire Electric Coop.

Taunton Municipal Lighting Plant United Illuminating Company DIRECT COSTS CHARGED INDIRECT COMPENSATION COSTS FOR USE CHARGED OF CAPITAL (Thousands of Dollars 458-1 458-2 5,476 18,858 120 4,507 18,021 15,478 3,379 156 27,202 93,197 458-3 EXCESS TOTAL TOTAL OR AMOUNT COSTS DEFICIENCY BILLED 458-4 5,476 18,858 120 4,507 18,021 15,478 3,379 156 27,202 93,197

=-==-----=-

5,476 18,858 120 4,507 18,021 15,478 3,379 156 27,202 93,197 INSTRUCTIONS:

Provide a brief description of the nonassociate company:

services rendered to each The Company acts as agent in operating Seabrook Station for the nonassociate companies.

NUMHER DESCRIPTION OF ITEMS Nuclear Power Expensee 517 OPERATION SUPERVISION AN ENGINEERING 518 NUCLEAR FUEL DISPOSAL 519 COOLANTS AND WATER 520 STEAM EXPENSES 523 ELECTRIC EXPENSES 524 mISCELLANECOS NUCLEAR POWER EXPENSES 528 MAINTENANCE SUPERVISION AND ENGINEERING 529 MAINTENANCE OF STRUCTURES 530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 531 MAINTENANCE OF ELECTRIC PLANT 532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLAN Tranmaission EZpen.es 570 MAINTHIANCE OF STATION E*UIPHMET Administrative sod General Expenses 920 SALARIES AND WAGES 921 OFFICE SUPPLIES AND EXPENSES 922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 923 OUTSIDE SERVICES EMPLOYED 924 PROPERTY INSURANCE 925 IN6URIES AND DAMAGES 926 EMPLOYEE PENSIONS AND BRENFITS 928 REGULATORY COMMISSION EXPENSE 930.1 GENERAL ADVERTISING EXPANSES 930.2 MISCELLANEOUS GENERAL EXPENSES 931 RENTS 935 14AINTENANCE OF STRUCTURES AND EUIPMENT All other expenses 408 TAXES OTHER THAN INCOME TAXES 409 INCOME TAXES 410 PROVISION FOR DEFERRED INCOME TAXES 411 PROVISION FOR DEFERRED INCC4ME TAXES-CREDIT 426.1 DONATIONS 426.5 OTHER DEDUCTIONS 431 OTHER INTEREST EXPENSE TOTAL EXPENSES =

421 MISCELLANEOUS INCOME -

CREDIT NET INCOME TOTAL COST OF SERVICE =

INSTRUCTION: Total cost of service will equal for associate and nonassociate companies the total amount billed under their separate analysis of billing schedules.

(63)

(63)

(95)

(95)

(158)

(158) 1 1

1 1

62,239 1

62.239 S

93,197 S

93,197 1

155,436 S

155,436

-23=

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XVI ANALYSIS OF CHARGES FOR SERVICE ASSOCIATE AND NC6ASSOCIATE COMPANIES ASSOCIATE COMPANY CHARGES NSONASSOCIATE COMPANY CHARGES TOTAL CHARGES FOR SERVICE DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT COST COST TOTAL COST COST TOTAL COST COST TOTAL S...........................................................................................................................

(Thousands of Dollars) 9,831 9,831 14.722 14,722 S

24,553 24,553 3,301 3,301 4,942 4,942 8.243 8,243 904 904 1,353 1,353 2,257 2,257 7,460 7,460 11,170 11,170 18,630 18,630 42 42 63 63 105 105 11,776 11,776 17,633 17,633 29,409 29,409 4,553 4,553 6,817 6,817 11,370 11,370 1,174 1,174 1,759 1,759 2,933 2,933 3,416 3,416 5,116 5,116 8,532 8.532 5,586 5,586 8,364 8,364 13,950 13,950 204 204 306 306 510 510 132 132 197 197 329 329 2,445 2.445 3,662 3,662 6,107 6,107 35 35 53 53 88 88 776 776 1.161 1,161 1,937 1,937 74 74 112 112 186 186 164 164 245 245 409 409 7,848 7,848 11,752 11,752 19,600 19,600 2

2 3

3 5

5 5

5 a

a 13 13 22 22 32 32 54 54 213 213 319 319 532 532 182 182 272 272 454 454 1,930 1,930 2.891 2,891 4,821 4,821 112 112 168 168 280 280 52 52 78 78 130 130 (288)

(288)

(430)

(430)

(718)

(718) 34 34 50 5s 84 84 267 267 400 400 667 667 49 49 74 74 123 123 62,301 62,301 93,292 93,292 155.593 155.593

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XVII SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION SERVICE FUNCTION ACCOUNT TOTAL SEABROOK NUMBER DESCRIPTION OF ITEMS AMOUNT OVERHEAD STATION (Thousands of Dollars)

Nuclear Power Expenses 517 OPERATION SUPERVISION AND ENGINEERING 518 NUCLEAR FUEL DISPOSAL 519 COOLANTS AND WATER 520 STEAM EXPENSES 523 ELECTRIC EXPENSES 524 MISCELLANEOUS NUCLEAR POWER EXPENSES 528 MAINTENANCE SUPERVISION AND ENGINEERING 529 MAINTENANCE OF STRUCTURES 530 MAINTENANCE OF REACTOR PLANT EQUIPMENT 531 MAINTENANCE OF ELECTRIC PLANT 532 MAINTENANCE OF MISCELLANEOUS NUCLEAR PLANT Transmission Expenses 570 MAINTENANCE OF STATION EQUIPMENT Administrative and General Expenses 920 SALARIES AND WAGES 921 OFFICE SUPPLIES AND EXPENSES 922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 923 OUTSIDE SERVICES EMPLOYED 924 PROPERTY INSURANCE 925 INJURIES AND DAMAGES 926 EMPLOYEE PENSIONS AND BENEFITS 928 REGULATORY COMMISSION EXPENSE 930.1 GENERAL ADVERTISING EXPENSES 930.2 MISCELLANEOUS GENERAL EXPENSES 931 RENTS 935 MAINTENANCE OF GENERAL PLANT All other expenses 408 TAXES OTHER THAN INCOME TAXES 409 INCOME TAXES 410 PROVISION FOR DEFERRED INCOME TAXES 411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT 426.1 DONATIONS 426.5 OTHER DEDUCTIONS 431 OTHER INTEREST EXPENSE TOTAL EXPENSES 24,553 8,243 2,257 18,630 105 29,409 11,370 2,933 8,532 13,950 510 329 6,107 88 1,937 186 409 19,600 5

13 54 532 454 4,821 280 130 (718) 84 667 123 155,593 24,553 8,243 2,257 18,630 105 29,409 11,370 2,933 8,532 13,950 510 329 6,107 88 1,937 186 409 19,600 5

13 54 532 454 4,821 280 130 (718) 84 667 123 155,593 INSTRUCTIONS: Indicate each department or service function.

(See Instruction 01-3 General Structure of Accounting System:

Uniform System of Accounts)

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 SCHEDULE XVII KEYS FOR SERVICE FUNCTIONS SERVICE FUNCTION The individual unit for which NAESCO provides service is listed separately on Page 24. KEYS

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 DEPARTMENTAL ANALYSIS OF SALARIES NAME OF DEPARTMENT Indicate each dept.

or service function.

SEABROOK STATION DEPARTMENTAL SALARY EXPENSE INCLUDED IN AMOUNTS BILLED TO TOTAL PARENT OTHER NON AMOUNT COMPANY ASSOCIATES ASSOCIATES (Thousands of Dollars) 59,948 24,004 35,944 59,948 24,004 35,944 NUMBER OF PERSONNEL END OF YEAR 812 812

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed. If the aggregate amounts paid to any one payee and included within one subaccount is less than $100,000, only the aggregate number and amount of all such payments included within the subaccount need be shown. Provide a subtotal for each type of service.

RELATIONSHIP "A"-ASSOCIATE "NA"-NON FROM WHOM PURCHASED ASSOCIATE AMOUNT (Thousands of Dollars)

COMPUTER AND COMMUNICATION SERVICES CNEX NA 168 Data Systems & Solutions, LLC NA 155 KForce.com, Inc.

NA 120 Microware Technologies NA 111 Northeast Utilities Service Company A

1,774 Verizon NA 268 Miscellaneous (34 payees)

NA 471 TOTAL COMPUTER SERVICES 3,067 ENGINEERING SERVICES Duke Engineering & Services, Inc.

NA 416 Electric Power Research Institute NA 349 Lehigh Staffing NA 138 Marathon Consulting Group, Inc.

NA 208 Northeast Utilities Service Company A

123 NUCON Engineering Associates, Inc.

NA 340 Proto Power Corp.

NA 228 Rudolf P. Neustadter NA 102 Washington Group, Inc.

NA 244 27-

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED RELATIONSHIP "A"-ASSOCIATE "NA"-NON FROM WHOM PURCHASED ASSOCIATE AMOUNT ENGINEERING SERVICES (continued)

Westinghouse Electric Co.

Miscellaneous (50 payees)

NA NA TOTAL ENGINEERING SERVICES 528 729 3,405 LEGAL SERVICES Prime Bucholz & Associates, Inc.

Sheehan, Phinney, Bass & Green Miscellaneous (11 payees)

NA NA NA TOTAL LEGAL SERVICES 108 137 179 424 SECURITY SERVICES Burns International Security Services Miscellaneous (22 payees)

NA NA TOTAL SECURITY SERVICES OTHER SERVICES Adecco Employment Services Christine M. Fahnestock Equinox Health and Healing Food With a Flair HR Strategies & Solutions, Inc.

Interaction Associates, LLC Normandeau Associates, Inc.

NA NA NA NA NA NA NA 4,169 139 4,308 275 127 189 139 194 205 1,014

-27a-

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED RELATIONSHIP "A"-ASSOCIATE "NA"-NON FROM WHOM PURCHASED ASSOCIATE AMOUNT OTHER SERVICES (continued)

Northeast Utilities Service Company Public Service Company of New Hampshire URS Corporation Zurich Scudder Investments, Inc.

Miscellaneous (729 payees)

A A

NA NA NA TOTAL OTHER SERVICES GRAND TOTAL OUTSIDE SERVICES EMPLOYED 4,107 450 141 160 2,444 9,445 20,649

-27b-

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED FROM WHOM PURCHASED DESCRIPTION OF SERVICES COMPUTER AND COMMUNICATION SERVICES CNEX Provides computer based asset divestiture information services.

Data Systems & Solutions, LLC Provides general and technical computer consulting services.

KForce.com, Inc.

Provides temporary, technical manpower.

Microware Technologies Provides general computer consulting services.

Northeast Utilities Service Company See note Page 27e.

Verizon Provides communication services.

ENGINEERING SERVICES Duke Engineering & Services, Inc.

Provides engineering services.

Electric Power Research Institute Provides industry with technical and operational support services.

Lehigh Staffing Provides temporary, technical manpower.

Marathon Consulting Group, Inc.

Provides temporary, technical manpower.

Northeast Utilities Service Company See note Page 27e.

NUCON Engineering Associates, Inc.

Provides temporary, technical manpower.

Proto Power Corp.

Provides technical inspection and analysis services.

Rudolf P. Neustadter Provides temporary, technical manpower.

Washington Group, Inc.

Provides engineering services.

Westinghouse Electric Co.

Provides engineering, technical, and site services.

-27c-

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31-, 2001 OUTSIDE SERVICES EMPLOYED FROM WHOM PURCHASED DESCRIPTION OF SERVICES LEGAL SERVICES Prime Bucholz & Associates, Inc.

Provides legal services.

Sheehan, Phinney, Bass & Green Provides legal services.

Northeast Utilities Service Company See note Page.27e.

SECURITY SERVICES Burns International Security Services Provides security services for baseline security support.

OTHER SERVICES Adecco Employment Services Provides temporary, technical manpower.

Christine M. Fahnestock Provides performance monitoring, trending, and/or improvement services.

Equinox Health and Healing Provides site occupational health services and medical consultation for NRC required programs.

Food With a Flair Provides food service for site meetings.

HR Strategies & Solutions, Inc.

Provides performance monitoring, trending, and/or improvement services.

Interaction Associates, LLC Provides performance monitoring, trending, and/or improvement services.

Normandeau Associates, Inc.

Provides environmental monitoring services.

Northeast Utilities Service Company See note Page 27e.

-27d-

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 OUTSIDE SERVICES EMPLOYED FROM WHOM PURCHASED DESCRIPTION OF SERVICES S.................................................................................................

OTHER SERVICES (continued)

Public Service Company of New Hampshire Provides worker's compensation administration, facilities, and miscellaneous services.

URS Corporation Provides environmental monitoring services.

Zurich Scudder Investments, Inc.

Provides Decommissioning Fund management.

Note:

Northeast Utilities Service Company Provides centralized accounting, administrative, data processing, engineering, financial,

legal, operational,

planning, purchasing and other services.

-27e-

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 EMPLOYEE PENSIONS AND BENEFITS ACCOUNT 926 INSTRUCTIONS: Provide a listing of each pension plan and benefit program provided by the service company. Such listing should be limited to $25,000.

DESCRIPTION AMOUNT (Thousands of Dollars)

Pension Plan Incentive Goals Plan Group Life, Long-term Disability, Hospital and Medical Insurance Expenses FAS 106 VEBA Funding Supplemental and Early Retirement Plans Education Employee Stock Option Plan Other Employee Benefits Expenses TOTAL 2,800 3,843 4,714 1,256 5,806 102 1,022 57 19,600 ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 GENERAL ADVERTISING EXPENSES ACCOUNT 930.1 INSTRUCTIONS:

Provide a listing of the amount included in Account 930.1, "General Advertising Expenses," classifying the items according to the nature of the advertising and as defined in the account definition. If a particular class includes an amount in excess of $3,000 applicable to a single payee, show separately the name of the payee and the aggregate amount applicable thereto.

DESCRIPTION NAME OF PAYEE AMOUNT (Thousands of Dollars)

Science & Nature Center New England Aquarim Services Stone Signs & Designs 11 13 TOTAL 2i 2 $

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 MISCELLANEOUS GENERAL EXPENSES ACCOUNT 930.2 INSTRUCTIONS:

Provide a listing of the amount included in Account 930.2, "Miscellaneous General Expenses," classifying such expenses according to their nature. Payments and expenses permitted by Sections 321(b) (2) of the Federal Election Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C.

• 441(b)(2))

shall be separately classified.

DESCRIPTION AMOUNT (Thousands of Dollars)

Research and Development 36 Employee Services 8

Service Awards 8

Brochures 2

TOTAL 54 ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 RENTS INSTRUCTIONS:

Provide a listing of the amount included in "Rents,"

classifying such expenses by major groupings of property, as defined in the account definition of the Uniform System of Accounts.

TYPE OF PROPERTY AMOUNT (Thousands of Dollars)

Computers/Data processing equipment Communications equipment Vehicles Buildings Equipment and other 1,334 169 74 85 250 756 TOTAL ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 TAXES OTHER THAN INCOME TAXES ACCOUNT 408 INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than Income Taxes." Separate the analysis into two groups:

(1)Other than U.S. Government taxes, and (2)

U.S.

Government taxes. Specify each of the various kinds of taxes and show the amounts thereof. Provide a subtotal for each class of tax.

KIND OF TAX AMOUNT (Thousands of Dollars)

(1) Other Than U.S. Government Taxes:

Insurance Premium Excise Tax 17 Property Tax 42 State Unemployment Tax 5

State Business Tax 343 Sub-Total 407 (2)

U.S. Government Taxes:

Federal Unemployment Tax 47 Federal Insurance Contribution Act 4,367 Sub-Total 4,414 TOTAL 4,821 ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 DONATIONS ACCOUNT 426.1 INSTRUCTIONS:

Provide a listing of the amount included in Account 426.1, "Donations,"

classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details.

NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT (Thousands of Dollars)

New Hampshire Seacoast United Way Seacoast Repertory Theater Miscellaneous (9 items)

Charitable contribution Charitable contribution Charitable contributions 84

$ 73 5

6 TOTAL $

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION For the Year Ended December 31, 2001 OTHER DEDUCTIONS ACCOUNT 426.5 INSTRUCTIONS:

Provide a listing of the amount included in Account 426.5, "Other Deductions," classifying such expenses according to their nature.

DESCRIPTION NAME OF PAYEE AMOUNT Political activities S&H/Murphy, Inc Employees Executive Incentive Compensation Various TOTAL 645 667 $

18 4

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION

.For the Year Ended December 31, 2001' SCHEDULE XVIII NOTES TO STATEMENTS OF INCOME INSTRUCTIONS:

The space below is provided for important notes regarding the financial statements of income or any account thereof.

Furnish particulars as to any significant increases in services rendered or expenses incurred during the year.

Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.

See Notes to Financial Statements on pages 19A through 19G..1 -

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION ORGANIZATION CHART AS OF DECEMBER 31,2001 E.V.P. & Chief Nuclear Officer Seabrook

)irector, Station

Director, igineenng Director Support Services nager, H R

Manager, Manager, Envrn rganization Nuclear Government & In velopment Oversight Relations NORTH ATLANTIC ENERGY SERVICE CORPORATION METHODS OF ALLOCATION For the year ended December 31, 2001 METHODS OF ALLOCATION All costs are specific to Seabrook Station and are direct charges.

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED For the Year Ended December 31, 2001 Expenses of Seabrook Station are funded in advance.

Therefore, there are no charges for use of capital.

ANNUAL REPORT OF NORTH ATLANTIC ENERGY SERVICE CORPORATION SIGNATURE CLAUSE Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned office thereunto duly authorized.

NORTH ATLANTIC ENERGY SERVICE CORPORATION (Name of Reporting Company)

By: Is/ John P. Stack (Signature of Signing Officer)

John P. Stack - Vice President and Controller (Printed Name and Title of Signing Officer)

Date: April 19, 2002