ML19318D158

Annual Financial Rept 1979

ML19318D158
Person / Time
Site:	Seabrook
Issue date:	07/03/1980
From:	PUBLIC SERVICE CO. OF NEW HAMPSHIRE
To:
Shared Package
ML19318D157	List: ML19318D156 ML19318D158 ML19318D159 ML19318D163 ML19318D165 ML19318D167 ML19318D168 ML19318D169 ML19318D172 ML19318D173 ML19318D175 ML19318D177 ML19318D178 ML19318D180 ML19318D184 ML19318D188
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Text

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1979 AnnualReport 3

Public Service Company of New Hampshire l

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puBLIC SERVICE Corporate Offices C=wv N H="W=

Public Service Company of New Hampshire 1000 Elm Street, P.O. Box 330 Manchester, New Hampshire 03105 Telephone (603) 669-4000 GeneralInformation Annual Meeting of Shareowners last 10 years) will be availablein Dividend Reinvestment Plan Agent All shareowners are urged to attend early April. If you want a copy, or The First National Bank of Boston the Annual Meeting to be held on have questions about the Annual PSNH Dividend Reinvestment and Thursday, May 8,1980, at 9:30 a.m.,

Report or the Company, please wn.te Common Stock Purchase Plan Eastern Daylight Saving Time, at to Russell A. Winslow, Clerk and P.O. Box 1681 The Carousel Ballroom, Bedford, Secretary, Public Service Company Boston, MA 02105 New Hampshire (Route 3-Daniel f New Hampshire, P.O. Box 330, Webster Highway-1 mile North of Manchester, New Hampshire 03105.

Other Information theinterci ange of the Everett Shareownerinquiries regarding

'Ibmpike, Interstate 293, and New Stock Exchange Listmg change of address, dividends, stock Hampshire Route 101).During the Public Service Company of New transfer requirements, lost or stolen meetmg there will be opportunity to Hampshire common stock and S25 certificates or other account infor-discuss matters of interest pertam-par value preferred stock are listed mation should be directed to The ing to the Company, on the New York Stock Exchange.

First National Bank of Boston, The Company's symbol on the ex-Shareholder Services Division, P.O.

Description of Business change is PNH.

Box 644, Boston, Massachusetts Public Service Company of New 02102.

Hampshireis the Isrgest electric Dividend Reinvestment and

. utility in New Hampshire, supplying Common Stock Purchase Plan Transfer Agents electricity to cpproximately 83% of During 1978 the Companyinstituted The First National Bank of Boston the population of the Stat <:of New a Dividend Reinvestment and 100 Federal Street Hampshire. The Company distrib-Common Stock Purchase Plan for Boston, Massachusetts 02110 utes and sells electncity at retail in its Share Wners and emP1 YeeS-Manufacturers Hanover Trust 200 cities and towns in the State of Thmugh the Plan, shareowners can Company

- New Hampshire,6 border towns in purchase shares of the Company's 4 New York Plaza the State of Vermcr.t, and 13 border common stock without the payment New York, New York 10015 towns in the State of Maine. Pubh.c of any brokerage commission or ser-Service also sells electncity at vice charge. We hope shareowners Registrars wholesale to 6 other utihties.

will find the Plan a convenient way The First National Bank of Boston to increase their ownership in Public 100 Federal Street AIual Report and Statistical Service Company of New Hamp.

SIpplement shire. If you desire more information B ston, Massachusetts 02110 This 1979 Annual Report has been concerning the Plan, please com-Morgan Guaranty Trust Company approved by the Board of Directors.

plete and return the post card of New York The 1979 Statistical Supplement attached to the back page of this 30 West Broadway (with comparative statistics for the annual report.

New York, New York 10015

r Highlights cf 1979 Change Since Annual Growth Rate 1979 1978 1974-1979*

Gross Investment in Utility Plant

$ 1,043,295,390 22.2 %

17.8%

Total Operating Revenues

$ 292,813,891 12.3 %

12.9 %

Total Operating Expenses

$ 248,386,364 16.9 %

13.4 %

Earnings Per Share of Common Stock 2.56 (21.2)%

1.0%

Prime Peak Load (Net Kilowatts) 1,173,000 5.0 %

4.1%

Prime Kilowatt liours Sold (Thousands) 5,602,834 4.1 %

4.6%

Number of Customers (Year-End) 281,787 1.8 %

2.4%

Annual KW11 per Residential Customer 7,317 0.5 %

l.0%

Construction Expenditures

$ 192,566,458 11.0 %

41.3 %

• Least Squares Alethod.

Table of Contents President's Letter / 2 YearIn ReviewI4 Financing /4 Earning /4 Sales /4 Rate Case Progress 14 Seabrook Facility / 5 Energy Management & Conservation /6 Public Communications / 7 Efforts to improve Service and Efficiency / 8 Dividend and Stock Market Pricesi10 Statement of Earningsl11 Balance Sheets /12 Statements of Changes in Financial Position i 13 Statements of Other Paid-In Capitali13 Notes to Financial Statements /14 Management's Discussion and Analysis of Summary of Operationi 22 Directors and Officers / 24 Energy Management, Conservation and Renewable Resources / IBC 1

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i Letter to Shareowners The Company is also seeking a i

and EmP oyces

$4.3 milhon two-step increase in l

rates charged to customers served at wholesale. The Federal Energy l

During 1979, a major portion of j

senior management s time and Regulatory Commission allowed

$3.5 millio.1 of that increase to cffort was devoted to three areas become effective January 22,

- financing the ongoing con-j struction of the Seabrook nuclear 1980 subject to refund, with the balance to be effective April 1,

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project, restructuring participa-1980, also subject to refund.

tion in the project to reduce the i

U Company s ownership level, and In March 1979, the Board of Di-l L

taking steps to correct the ero-rectors announced its decision j

sion in earnings resulting from that the Company should move continuing and severe inflation-ahead to reduce its ownership i

I ary pressures.

participation in Seabrook Sta-l tion. This difficult decision was Earnings per share for 1979 were

$2.56, down 21% from 1978 reached when it appeared certain that Constrection work In Prog-earmngs of $3.25. This dech.ne j

emphasizes the need for the ress lCWIP) would be eliminated l

rate relief being sought by the from the rate base by a new state statute. At that time, it was de-Company.

cided to reduce the Company's i

Late in August, the Company ownership interest from 50 per-i filed for an 8.4 percent increase cent to 28 percent. Commit-in New Hampshire retail rates to ments have been received for a 1

produce an additional $18.5 mil-reduction to approximately 35 I

lion in revenues annually. Sky-percent, and necessary approvals rocketing interest rates in the fall from various regulatory bodies j

led to a supplemental filing seek-are presently being sought. The j

ing to place a part (nearly $12 New Hampshire approvals million) of the previously re-necessary for the reduction have quested increase into effect im-been received, but an appeal is mediately. The New Hampshire pending. Receiving approval by Public Utihties Commission the Massachusetts Department acted promptly on the emergency of Public Utilities for the in-l filing and allowed the $12 mil-crease in ownership by ' w;sa-lion increase requested to be-chusetts utilities is taking sig-I come effective on December 28 nificantly longer than expected.

subject to refund until perma-Approval by the U.S. Nuclear nent rate levels are determined.

Regulatory Commission is also needed before the adjustment of ownership can begin.

1

1 Because the Company is respon-On behalf of the management sible for financing 50 percent of and the Board of Directors of the the costs of Seabrook Station Company, I would like to express until all approvals are obtained, our sincere appreciation for the the delay in gaining those ap-understanding of shareowners provais has caused serious finan-during the recent difficult cial difficultic. During 1979 it months.

was necessary for the Company Through all of our difficulties, to raise about $169 milhon in we must salute our loyal em-long-term capital. In addition, the ployees who have faced personal Company's Revolving Credit -

criticism from ma.ny parties.

Agreement has been increased Those critics do not always ap-from $9a million to $130 million preciate the complexity of p;a-and the maturity of a $25 million y ding such a vital service as term bank loan has been ex-electric energy. Employees, too, tendei. to January 5,1981.

are ratepayers and taxpayers and The Seabrook Project is a major live with their families through-undertaking from both construc-out the state. They know the im-tion and financing points of view.

portance of reliable energy and The Company and the other par-are working in a most responsi-4 ticipants in the project remain ble fashion to ensure it, committed to completing the proicct as soon as possible since it represents a large part of the near term solution to New Hampshire's and New England's extreme and dangerous depen-dency on imported oil for much W.C. Tallman of their electricity and substan.

Presulent tial relief from the high cost of oil. Seabrook will displace about 60,000 barrels per day of oil, nearly 10% of the 700,000 barrels per day which the United States had been buying from Iran before such imports were embargoed.

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Year in Review g'1< 3 ;p 3j.4 i

.; 2 e._9m & -m During 1979 the Company raised a,

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$ 169 million in investor capital L:i H.

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d Vi *. M.,

j which has played a major role in

- t:j'H ! j i f i *4 continuing the constructmn of Sea-V-

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t i ; gJ [ j'M iei 4

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bmok Station and other proiccts.

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i Although revenues for 1979 in-l creased by 12 percent over those in i

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.n 1978, operating income declined by

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8 percent due to inflationary pres-g[Q[NQ, ;g'c

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%j%y. K sures on operating costs. While bal-4 ance for common stock increased 7 g

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g percent over 1978, earnings per share @y

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were $2.56 in 1979 compared to t

$3.25 for 1978. This is due in part to

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l the fact that there was an increase of 5lx If.Kg-

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36 percent in the average number of

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common shares outstanding be-i

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tween the two years, reflecting in C.

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part the financing program referred b.'

to above.

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.y To combat this deterioration in earn-

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ings, the Company filed for a perma-s

.l nent rate increase with the New x

Ilampshire Public Utilities Com-l mission on August 31,1979. The fil-

%g ing was designed to produce annual

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revenues approximately 8.4 percent

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g higher than past revenues. As ex-i l

pected, the filing was suspended by

\\Vith future electrical service nee is being planned Iorin advance, the Drafting l

the Commission pending a full m-Department " lays out" transmission line routes, showing the type of towers or poles.

l vestigation to ensure that the Com-the supporting foundations, natural barriers and a host of other important details.

pany's new permanent rates are pust Daniel perreault is worl<ing on a typical drawing.

and reasonable for the ratepayer and l

t'te Company.

Rate Case Progress I

Prime Energy Sales (Thousands of Megawatt - Hours)

On Novembcr 27,1979, the Com-allow the Company to retain its abil-pany requested part of the 8.4 per-ity to attract investor capital for con-Percent cent increase on an emergency basis struction of facilities needed to pro-i 1979 1978 Increase in an effort to avert a cash-flow crisis vide electric service.

e u! ting fmni delays in the reduc-Although the Company filed for new Ilesidential 1'804 1'766 12 ion of a ne ship in the Company,s rates in Maine, none were filed in l

Industrial l 846 l743 5.9 share of Seahmok Station.

Other_. _ _ _ _l '953t _ _1,8 75.-

The Commission granted the full pany's intention to sell its Vermont 4.2 Vermont as a result of the Com-l Total 5,603 5,384 4.1 cmergency request on December 21, distribution facilities in the first halt 1979, allowing it to take effect on of 1980. The Maine filings contained Although prime energy sales were December 28, subject to repay-the same features as the New Hamp-up 4.1 percent over the 1978 annual ment if any part of the increase was shire filings, and were designed to l

period, the increase was less than an-later denied. This action will pro-produce an increase in revenue of j

ticipated largely as a result of mild duce nearly $12 million in additional

$1 million on an annual basis. Hear-weather and moderation of growth annual revenues and together with im;s in Maine had not yet started at in the industrial sector.

other requested increases should year end.

4

I I he ( i>mpany alsi> filed. im 1)cccm lisipact of tlie Kerrieriy 4:

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ber.)!. l@), a t wo step rate increase Corittiiissioti Report

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priipiisal ti>r wholesale tiir resale cus At a press ci>nterence held inn the

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tsuners subject to the lurl.dit tiim of scabrook constructuin site, media

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the Federal Energy I;cxulatiirv representatives were told at the

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' I annual revenues anticipated tnim

( inmmissitin Repiirt would be help y A'k.-

l 'olu m ission I hc total increase in time of its release that the Kemenv

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4 both steps would amount to 54 4 f ul to the ( ompany m addmg f urther l'1 gE g.

nulhon in 11) I percent above the safety measures to the already sate q

l rates then in force Early in 19x1L the scabrook plant T he report had made

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( ompany was permitted to begm mqun v into the safetv procedures of 1

nuplementing those rates, also sub-the Ihree Mile Island plant and was y.:

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ic( t to repay ment, until m investiga mtical of the tr.nmng measures

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tion tould be cont luded takt n by the plant's owners J.

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Vastly ditterent f rom the TMI plant,

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.% b ;I Tlie Seabrook FacilitV scabrook station is of a newer design e

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('uoperat mx with law entorcement and many of the Reporti saf ety tec-Qi '. k 2 authorities f rom several New Enx~

ommendations were aheady incor-

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I l.md states, and with the aid of the porated In addition, operators +or the I

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New Hampshire National Guard, plant are already in trainmg and have z i nn lion +r a un rcr relcr in the the Company has been able to pr'-

had considerable experience in other l

tect your property at seabrook sta nuclear operanons Lach operator g.y,,r f,, m,,, py y s a,yc7c, tion f rom the lawless activities of will spend thirty months m prepara-vanous obstructiomst groups Over tion betore h.s hcensing will be the last several years these groups.

sought answerable to no one, have cost the citizens of New Hampshire over 51 InlllhHi

[

g In t he meantinic. cinist rtiction activ-1 ities 5iave pringressed We, essen-ti.lll\\ linattected bv such attempts I here are 4,4no construction em plovces on the site presentiv repre senting many ditterent crafts and / w> prof essions T.our management is yp

• 7pgp pleased to report that the entire pror

.h= ect is approximatelv 4 4 percent complete. based on total dollars ? g., y l l spent or committed to supphers. 1)uring mid-19V a newsletter gOM l designed to inform emplovces and seabrook area residents of the pror 4t cet \\ stattis Was launcheu It has re-Jetved wide acceptance and has aided in developing understanding about the StatbHi. Area residents re-ceive the pubhcation as an insert to their local newspaper. enstiring that W> most of the cornmunitv has avail-d .;y,d.T - able the latest information on its lho ronid 61 mw s w arod wnon h s Unn ( in. < oroimwnr hmidun-I x largest taxpayer In addition, the u,,74fy,7g,gysg,m.,y7y,g,,,ynmfg,y 7 j,y,orarourd she s the romWa r ioin l pubhcatmn is sent to other owners o, 7hc y,cri, u a rcr rurnrhou, < ror criict cru 1 n e, Un t he len Ihc rn"irh"nw for of the proiect and to other utihnes -tr!cince,,, ohne u.n< r on rhc rieln u in. m utu, un nno callor ' ; cr innnne and parties having an interest in the throneh the uanon or cnonch scan.nce to on m.n craec we su unnm)u r"" developments there. i a h vcond

i l i. i Nine months of specialized training Seabrook Education Center Energy Management will be focused on Seabrook Station, Adjacent to the construction area and Conservation during which a large amount of time at Seabrook Station is the project's Underscoring its interest in serving will be spent with an on-site control Education Center. Exhibits on the public, the Company is par-mom simulator. The computer-energy, displays and explanatory ticipating in the National Energy j driven duplicate control room will scenes on the environment and the Watch (NEWl voluntary program for provide " hands on" experience in process of generating electricity with energy conservation. Under the au-the form of simulated maior and nuclear fission and an experimental spices of this program, trained per-minor emergencies which challenge wind genen.cor are features of the sonnel from the Company perform the candidate's abilities as an opera-center designed to acquaint visitors energy audits for customers without tor. This training will continue as with the process of energy produc-charge, advising them how to build long as an employee works as an tion. During its recently concluded or modify homes to meet minimum operator. first year of operation, the Education conservation standards. Calcula-Instead of the customary five operat. Center hosted 152 school groups tions perfermed using data collected ing shifts, Seabrook Station will from New Hampshire and surround-at the customer's home demonstrate have six, ensuring that one shift will ing states. Dozens of special groups how energy consumption may be re-always be in training. Going beyond visited the exhibits in addition to the duced. The data will also provide an regulatory requirements, the Com. increasingly large numbers of resi-estimate of potential cost savings. pany will require operators to pass dents and tourists passing through stringent oral and written exam-the area. Its first full year saw 45,300 Since the establishment of this na-inations every year to continue visitors hosted through the Center. tional program developed with assis-operating the facility. tance from the Company's Director of Marketing, over 6196 requests for home audits have been received and i ,.j.Q: #f{ ?, has been one of the most successful ) 6080 home audits completed. This . g :- "( .-.,e [ programs ever implemented by the a 7 Company for energy-conscious cus-a E tomers. In addition to homes, the UM 6 .f 5-NEW program is also available to '*M c-i business and industrial customers. y I PJ' 6.., "ng[*h 3 Through this, or a similar " Energy -s 'k 0# t Management Action" program, all consumers may learn ways to cut -g g y- - 7 + /j 8 2 down on energy use. M 8 ,, 1 i OI, dh y' ,[' 7 To further broaden public con-i i 7g f ~ sciousness of the importance of 7 s' energy conservation, the Company r y#,,. ' W.-. has developed and offered to New Hampshire Elementary schools its , y ~.,- g " Junior Energy Conservation pro- . ~.. T ..~;,. r l @N Y ,- Nw..,, 3 Pq, t M4. t- }c -.m. 3 's y ? 8 ? g. ~'m _._ ;.:. 4.4

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a. .y ~.e. Top: Waters impounded by the Company's hydroelectric facilities are carefully con. ~F'_ Q. ~' ;, &.. y trolled to provide the maximum generation possible. Employees here at Amoskeag a Hydro in Alanchester. NH are performing maintenance on "flashboavls" which raise ,2: 2 y -., ' '.,!+ 1 L 3+. the water level above the height of Ihe dam. .' y .._ )1 Lef t: lobs in a large service industry hke energy production take on many different .. 7 facets such as Staria Stowell% in the Civd Engineering Department. From forest y 'I management to weldmg to complex mathematical equations.. all are necessary - sf s; m electrictly production process. l.. ;...... '.. tw . ev ;~L e v. .v.., / r{g ( ( *- ] Energy and Man's Environment Public Communications '.3 i .y. Sponsored by the State Education The Company has repeatedly ""..g ". ~ +J: Department, a'uew energy conserva-stressid conservation of energy to its s' g"

• 7 7 14 tion curriculum series, " Energy and 280,000 retail customers during the C

Man's Environment," was intro-past year. Of the nine bill inserts duced into the state's public schools. sent out, five derlt with conserva- -y ,$ * 'M '. : ;,s state east of Missouri to introduce a rate matter. New Hampshire became the first tion, three with safety and one with

$ j a. '

~' :.. (- 7Wf this excellent program. The Co pany was instrumental in providm.- Recognizing that energy sources and 1.. : : g their conversion to useful forms are 4,. - 7.,3 funding along with others to encour~ complex subjects to understand and ..g age energy education, generally lack-that such understanding are neces-mg m school curricula. sary if we are to solve our energy .,4, %[.* 1 At the program's first workshop se-problems, the Company took action. ['.a' A> Ad j~,,. ries in early 1980, virtually all school Early in 1979, the University of New v. " c. A( t districts in the state were repre-Hampshire's Lenter for Industrial = 1 sented, signaling the acceptance of and Institutional Development was f; I i ' i f, * ~_, " " e.y # ' this important approach to energy asked by the Company to assign ten management and conservation. prominent experts in ten fields of ' "~ l 7

1 energy to write an objective report to Public Information Statistical Report the people of New Hampshire on the current status of energy sources in theirarea of expertise. Although the Speakers Bureau Company funded the study, the au-No.of Speakers Appearances Total Estimated Audience thors were given total and absolute 1977 35 23 7 8,300 academic and editorial freedom. The 1978 40 337 12,000 result of their combined efforts 1979 65 555 19,000 called " Energy Sources: The Prom-ises and problems" was published by Radio Talk Shows the University of New Hampshire 1977 32 and has been made available to the 197g 41 public including distribution by the 1979 45 Company to all schoollibrariesin New Ilampshire. Youth Education Appearances Total Estimated Audience 1977 144 4,400 During the decade of the seventies 1978 180 6,400 the company attempted to improve 1979 350 18,000 communications with its publics. Particular emphasis on community Tours of Company Facilities (other than Seabrook) relations came in 1976 with the for-1977 145 4,900 matigm of six community affairs 1978 124 4,200 positions around the state. This 1979 133 4,000 function has grown both in scope and effectiveness as the accompany-Seabrook Information Van ing chart will indicate. May 1974 - December 1976: 327 appearances, reaching over 65,000 people. Activities in all areas of public in-Seabrook Education Center formation have been stepped up to From opening in Fall,1978 provide more understanding to over 50,000 visitors, including 10,000 construction site visits. ratepayers and shareowners alike. Many of the Company's efforts in News Releases Press Conferences this regard have been aimed at cras-1977-1979 102 11 ing the many misconceptions sur-rounding the supply and production of electrical energy and the increas-ingly negative attitudes toward introduction of a month. 30-min-record keeping and now permits, ly business that appear to have devel-ute video-taped news and feature ready access for updating of file in-opcd in recent years. P*E. ram dealing with the Company formation. Customers are able, and its employees. The use of video-through this system, to get an im-i As an aid to the Company, outside t pc equipment for training, safety, mediate answer from service per. consultants are involved in advising affirmative action and other pur-sonnel regarding the status of their on public information, advertising p ses has been operational since accounts. Conversien began late in programs and opinion research. With 1974. Communications with those 1978 and was concludedin the fall of this definitive assistance, the Com-utside the Company can be en-1979. In addition to improving ser-pany has sought to strengthen its hanced through betterinformed vices to customers, the system im-programs to solidify and build cus-employees. proves cash flow and information tomer understandingof the industry available to management. in these difficult economic times. Efforts to Improve Service In June,1979, the Company hired a and Efficiency nationally known consulting firm, Also a focus for Company public in-A project of major importance to to help develop and install a man-formation activities has been inter-the Company and its customers was agement control system in the nal communications - providing completed during 1979. The Cus-Operating Divisions to improve our employee audience with impor-tomer Information System, a com-Company efficiency. Throtmh spe-trat information. Noteworthy puter terminal operation, made pos. cialized techniques and ouensive emong that effort has been the June sible the modernization of customer management training, the Company 8 n

Wl}! achieve IHiire etticient p}anning. Inalttr changes have already been at I schedtiling and assignnient i>t wiir k tiiinplished with three tinal cinisidi-l and equipment. which will save daticins tii ta ke plate during 19m) i n)onev Jnd unprove ser vite tii t he cust(inier A titurier system alsil has been es- \\ tJblished bs the compans and now \\' Further striving tor internal im enables inter-ottice shipments of l provement. the company appointed mad and small packces on a next a task force to study the teasibihtv of da or M hourb w s ming an elaba i utihzing a computer t onstructi"" rare route system, the entire state management illfillnlalli!n systeIM f t1 c an k' M'Ivd wit h three vehic'n achieve a more ertitient use of ma" 9 The benetits to customers and man power, equipment and material, re agement have been substannal ducing those requirements where o possible ,-h) A compreht nsive management audit WJs C(inducted during l9'N and a re-I ht, (:iimpans is nearing the end tit a port Was released in Februar\\.19'V ,f ).inic / h,ier n < /, d Ihr (.cnc t 1/ ( iin sI r nt titteeli-year p}an f(1 CtmMdidJte its ,,n and \\f.nn ten m1 e 1)o me,n worl. ,n' ottices and divisions around the state mms h omer lhe< om pne has the where possible and where not det-l'"iHpany suengths identified re-rnDental to customer service Nine latd to fina d planmng, conuol , mihiin. a reonhishm e m,nr r; pc of statt levels, emplovec compensa-ojmrment c.purcJr,n ns transuu +, ni4/istrihnt o m s t stem tion, management of the scabrook project and sertice delivery gh$[ myy~~rmrveep ,n v.nym rw _*-~ n~xL n hk A N h -n> nn g}} g ()ne of the areas for improvement in (,g q,.7 i h.at'rM g the opmion of the auditors dealt "% ~ J y; AMA;M rA - < st w mw J e an : ga y w th the operations of the Nier- ~ ph N rimack coal fired Generating station yif ~ j ' il in ikw, N H some of the recom- ' cd, 'h mendations suggested by the audit 4 21 Q E* f were already in process by February, -9; ? 1979, and others have been im-plemented since that time. The net e result of these activities will be an improvement of the iiperation and g reliabihty of the station. jit = = = = - J The past vear has been a vear of i, change for the Company N1any new i systems, controls and procedures have been introduced N1any creatiw I approaches to problems have been used to make vour Company more efficient and ()f better service f()its customers Employees have made these changes possible. tor it is they who have been instrumental in tind-M Ing better Wavs to serve [o a n \\ Company, its greatest asset is a Inval. -r hardworking group of emptovces And N1anagement expre.scs appreci-l With rer ords at over w oon retail < us tomcis and a host < a other i, mds or mturma ation to all PNNH emplovces for non to Acer on tdc. the ( omnun has a ( omputer < cnter m \\ tant hester it is the their support through all the dif-rVc center r ut thc nen ( n s tc rinc ? Inf t prmat;r >n \\ \\ stctn licic t harlc~ \\l1llcr e ha n3, flCilities WhlCh bCset this Indu%rry i disk pAk t()d a y. 9

\\ Comnnn cnd PreErred Stock Market Prices and Dividends Common Stock

• Dividends Paid 1979 1978 Per Share High Low High Low 1979 1978 First Quarter

$21% $19% $20% $19% $.53 $.47 Second Quarter 19 % 17 % 20 % 18 % .53 $.47 Third Quarter 19 % 17% 22 % 19 % .53 .47 Fourth ouarter 18 % 15 22 % 19 % .53 .53 Pref rred Stock" Range of Bid Prices Range of Bid Prices 3.35% Series 1979 1978 4.50% Series 1979 1978 High Low High Low High Low High Low First Quarter $31 % $30% $35 $33% First Quarter $43 $40 $46% $45 Second Quarter 31 30 35 35 Second Quarter 42 % 39 47 45 Third Quarter 31 28 33 % 33 Third Quarter 40% 39 % 46 40 Fourth Quarter 28 25 34 30 % Fourth Quarty. 37% 33 47 43 Dividends of $0.84 per share were paid for the first three Dividends of $1.125 per share were paid for each quarter quarters of 1979 and 1978 and $0.83 per share for the of 1979 and 1978. fourth quarters of 1979 and 1978. Range of Hid Prices Range of Bid Prices 5.50% Series (Convertible) 1979 1978 7.92% Series 1979 1978 High Low High Low High Low High Low First Quarter $77 $76 $80% $76 First Quarter $72 $72 $81 $81 Second Quarter 77 77 Not Quoted Second Quarter 73 68 Not Quoted Third Quarter Not Quoted 81 81 Third Quarter 72 65 79 % 79 Fourth Quarter 60 60 77 77 Fourth Quarter 65 57 73 73 Dividends of $1.375 per share were paid for each quarter Dividends of $1.98 pe' ' ire were paid for each quarter of 1979 and 1978. of 1979 and 1978. Range of Prices Range of Prices 11.00% Series 1979 1978 11.24% Series 1979 High Low High Low High Low First Quarter $26% $2'i $30 $28 First Quarter Second Quarter 26 % 24 % 29 % 27% Second Quarter 27 25 % Third Quarter 26 % 24 % 28 % 26 % Tnird Quarter 27 % 24 % Fourth Quarter 25 % 20 28 % 25 Fourth Quarter 24 % 20 % Dividends of $0.6875 per share were paid for each quar-This series of preferred stock was issued in May,1979, ter of 1979 and 1978. Dividends of $0.654 per share determined on a pro rata basis were paid in the third quarter of 1979. Dividends of $0.7025 were paid in the fourth quarter of 1979. 7.64% Series: 9.00% Series: This series of preferred stock was privately placed with This series of preferred stock was privately placed with two institutional investors and consequently there has several insurance companies and consequently there has been no trading of thic stock. Dividends of $1.91 per been no trading of this stock. Dividends of $2.'25 per share were paid for each quarter of 1979 and 1978. share were paid fur cach quarter of 1979 and 1978. Lt;: Information on the range of bid prices on the "Over the Counter" market for the 3.35%,4.50%,5.50%, and 7.92% dividend series of preferred stock was supplied by the National Quotation Bureau, Inc. Trading of the 11.00% and 11.24% dividend series is on the New York Stock Exchange. 'Ptsces of Common Stock on New York Stock Exchange

• *Allpreferred stock series have a par value of $100.00, except the 11.00% and i1.24% series which have a par value of $25.00 10

/ Statements of Earnings and Retained Earnings For the Year Ended December 31, 1979 1978 (Thousands of Dollars) Operating Rtvenues (Note 2) $292,814 $ 260,751 Operating Expenses Operation Fuel 111,411 71,996 Purchased and Interchanged Power 36,091 43,422 Other Operating Expenses 36,409 31,490 Maintenance 19,271 17,502 Depreciation 15,487 14,752 Federal and State Taxes on Income (Note 3) 15,066 19,666 Other Taxes, Principally Property Taxes 14,651 13,585 Total Operating Expenses 248,386 212,413 Operating Income 44,428 48,338 Other Income and Deductions Allowance for Equity Funds Used During Construction (Note 4) 15,188 7,828 Equity in Earnings of Affiliated Companies 770 870 Other-Net 1,279 983 Total Other Income and Deductions 17,237 9,641 income Before Interest Charges 61,665 58,019 interest Charges Interest on Long-Term Debt 28,247 21,073 Other Interest 14,465 8,201 Allowance for Borrowed Funds Used During Construction (Note 4) (21,766) (7,762) Net Interest Charges 20,946 21,512 Net income 40,719 36,507 Retained Earnings at Beginnir.g of Year 71,140 58,725 111,859 95,232 Dividends Paid - Cash Preferred Stock, at Required Annual Rates 7,966 6,394 Common Stock, $2.12 Per Share I (1978 -$1.94 Per Share) 27,244 17,698 Total Dividends Paid 35,210 24,092 Retained Earnings at End of Year $ 76,649 $ 71,140 Weighted Average Shares Outstanding 12,642,928 9,275,220 Earnings Per Share of Common Stock $2.56 $3.25 See accompanying Notes to Financial Statements. 11

r Balanc] Sheets December 31, Assets 1979 1978 (Thousands of Dollars) Ut'!:ty Plant at Original Cost Electric Plant $ 524,415 5507,711 Less Accumulated Provision for Depreciation 147,398 134,373 377,017 373,338 Unfinished Construction (Principally Nuciaar Generating Projects)(Note 10) 518,880 346,382 Net Utility Plant 895,897 719,720 Inves nents Nuclear Generating Companies 9.627 9,529 Real Estate Subsidiary 3,506 4,472 Other, at Cost 184 184 Total Investments 13,317 14,185 Current Assets Cash 2,137 1,879 Accounts Receivable 28,097 27,588 Unbilled Revenue, Estimated 21,977 18,057 Refundable FederalIncome Tax 5,197 Fuel, Materials and Supplies, at Cost 32,002 20,743 Prepayments 3,576 3,330 Total Current Assets 92,956 71,597 Other Assets Miscellaneous Properties 245 314 Deferred Debits 7,203 5,359 Unamortized Debt Expense 1,139 926 Total Other Assets 8,587 6,599 $ 1,010,787 5812,101 Cr pitalization and Liabilities Capitalization Common Stock Equity Common Stock - $5 Par Value Authorized: 18,000,000 Shares Outstanding: 13,969,133 Shares (1978 - 9,786,969 Shares) S 69,846 S 48,935 Other Paid-In Capital 166,265 10s,232 Retained Earnings (Note 5) 76,649 71,140 Total Common Stock Equity 312,760 228,307 Preferred Stock (Note 6) 52,514 53,562 Preferred Stock - Redeemable (Note 7) 60,000 30,000 Long-Term Debt - Net (Note 8) 344,829 287,252 Total Capitalization 770,103 599,121 Current Liabilities Notes Payable - 13anks (Note 9) 114,100 85,325 Long-Term Debt to be Retired within One Year (Note 8) 555 5,231 Accounts Payable 50,244 68,035 Accrued Taxes 3,093 12,349 Accrued Interest i1,249 6,215 Other 1,788 1,145 Total Current Liabilities 181,029 178,300 Deferred Credits Accumulated Deferred Investment Tax Credits 29,717 12,488 Accumulated Deferred Taxes on Income 29,48) 11,716 Other 456 476 Total Deferred Credits 59,655 34,680 Commitments and Contingencies (Note 10) $ 1,010,787 S812,101 See accompanying Notes to Financial Statements.

f Statements of Changes in Financial Positi:n For the Year Ended December 31, 1979 1978 (Thousands of Dollars) Sourceof Funds From Operations Net income $ 40,719 5 36,507 Principal Non-Cash Charges (Credits) to income Depreciation 15,487 14,752 Allowance for Equity Funds Used During Construction (15,188) (7,828) Deferred Taxes and Investment Credit Adjustments 24,996 7,024 Total from Operations 66,014 50,455 From Outside Sources Sale of Long-Term Debt 60,000 60,000 Sale of Preferred Stock 30,000 Sale of Common Stock 79,716 24,309 Increase in Short-Term Borrowing 28,775 30,212 Advance Payments from Joint Project Participants 10,628 Total from outside Sources 209,119 114,521 Decreasein Working Capital 33,510 Total $275,133 S198,486 Application of Funds Property Additions $192,566 5173,539 Allowance for Equity Funds Used During Construction (15,188) (7,828) Dividends Paid 35,210 24,092 Reduction of Long-Term Debt 1,214 5,947 Increasein Working Capital 58,064 Other Applications - Net 3,267 2,736 Total $275,133 $198,486 Increase (I cc e c)in Working Capital Cash and Cash investments 258 $ (3,050) Other than Short-Term Debt and Receivables 509 5,596 Advances from Participants inventories 11,259 3,707 Long-Term Debt to be Retired Within One Year 4,676 3,397 Accounts Payable 28,419 (33,125) Accrued Taxes 9,256 (l1,470) Other 3,687 1,435 j $ 58,064 S(33,5101 Total l Statements of Other Paid-In Capital For the Year Ended December 31, 1979 1978 (Thousands of Dollars) Other Paid-In Capital Balance at Beginning of Year $108,232 5 90,409 Excess of Proceeds Over the Par Value on theissuance of Common Stock Sold 4,136,376 Shares in 1979 and 1,321,284 Shares in 1978 58,649 17,461 Conversions-5.50% Convertible Preferred Stock 45,788 Shares in 1979; 21,171 in 1978 819 407 Preferred StockIssuance Expenses (1,435) (45) Balance at End of Year $166,265 $108,232 See accompanying Notes to Fina1cial Statements. 13 1

\\ Notes ta Financial Stat;m:nts

1. Summary of Accounting Policies Regulations and Operations charged to utility plant. At the time properties are retired, The Company is subject, as to rates, accounting and other the cost of property retired plus costs of removalless matters, to the regulatory authority of the New Hamp-salvage are charged to the accumulated provision for shire public Utilities Commission (NHpUC), the Federal depreciation.

Energy Regulatory Commission (FERC) and, to a lesser extent, the public utilities commissions in other New Operatmg Revenues Engl:nd states where the Company does business. Rev-nues are based on billing rates authorized by applica-ble federal and state regulatory commissions which are Investments applied to customers' consumption of electricity. The The Company follows the equity method of accounting Company records estimated unbilled revenue, including for its investments in nuclear generating companies and amounts to be bille;l under a retail fuel adjustment clause, in its wholly-owned real estate subsidiary. The Com-at the end of accounting periods. pany's investment in this subsidiary is principally in the form of advances. The Company's investments in nuclear Income Taxes generating companies are: The tax effect of differences between pretax income in the financial statements and income subject to tax, which are Ownership the result of timing differenees, are accounted for as pre-Company Percent 1979 i978 scnbed by and m accordance with the ratemaking pohcies [Ihousands of Dollars) of the NHpUC. Accordingly, provisions for deferred in-Yankee Atomic Electric come taxes are recognized only for specified timing dif-Company 7% $1,439 $1,443 ferences. Tax reductions attributable to other timing Connecticut Yankee Atomic differences are flowed through to net income as reduc-Power Company 5% 2,446 2,335 tions of income tax expense. See Note 3. Man ankee Atomic Power Investment tax credits earned are de erred and amcr-f 5% 3N8 3M7 Vermont Yankee Nuclear tized to income over the lives of the related properties. Power Corporation 4% 2,3l4 2,324 Allowance for Funds Used During Construction 59,627 $9,529 Allowance for funds used during construction is the es-timated cost, during the period of construction, of equity in the case of each of the nuclear generating companies, funds and borrowed funds used for construction purposes pursuant to provisions of purchased power contracts which are not recovered from customers through reve-which are regulated by the FERC, the Company is entitled nues. See Note 4 to its ownership percent of total plant output and is obli-gated to pay a similar share of each company's operating Pension Plan expcnses and retum on invested capital. Approximately The Company has a non-contributory pension plan cover-9.3% and 10.9% of the Company's total energy require. ing all full time employees who have met a minimum ments were furnished by these companies in 1979 and service requirement. The Company's policy is to fund 1978, respectively. current pension costs accrued. Costs were $2,800,000 in 1979 and $2,400,000 in 1978. At December 31,1979, Utihty Plant vested benefits under the plan exceeded the market value provision for depreciation of utility plant is computed on of the plan's assets by approximately $5,060,000. At that a straight line method at rates based on estimated service ,1 e e, the total unfunded past service liability was approx-lives and salvage values of the several classes of property. wately $5,121,000. The depreciation provisions were equivalent to overall effective rates of 3.23% and 3.19% of depreciable property Earnings Per Share for 1979 and 1978, respectively. Earnings per share are based on the average number of Maintenance and repairs of property are charged to common shares outstanding, after recognition of pre-maintenance expense. Replacements and betterments are ferred dividend requirements. 14

l

2. Operating Revenues For the period December 3,1977 through May 6,1979 the on July 29,1978 the Company began billing new Company's New Hampshire retail rates were based in rates to its wholesale-for resale customers designed to part upon the inclusion in the Company's rate base of a increase annual revenues by approximately $2,400,000 portion of the costs of construction wc,rk in piogress (about 7.7%) based on a 1978 test year. In January 1980, (CWIP) associated with major generating projects. The in.

the Company reached agreement with these customers clusion of CWIP in rate base increased revenues from cus-pursuant to which, in part, the Company's revenues tomers to cover the costs of fmancing such CWIP. On would be reduced by approximately $450,000 on an an-May 7,1979 a New flampshire statute prohibiting the nual basis and rate refunds would be made retroactive to inclusion of CWIP in the Company's rate base became July 29,1978. The agreement, which is subject to FERC effective. Ily order dated August 29,1979 the NHPUC approval, provides that payment of the refunds will be excluded CWIP from the Company's rate base as of May deferred until the beginning of the Adiustment Period 7,1979, but determined that the Company's rates would for reduction in the Company's ownership interest in remain unchanged pending an investigation to determine the Seabrook plant (see Note 10) or January 1,1981, the Company's revenue requirements and to establish whichever is earlier. At December 31,1979, no pro-fair and reasonable rates. The NHPUC has stated that the visions for rate refunds have been made $n the Com-rights to possible customer rebates have been preserved pany's financial statements. covering the period from May 7 to December 28,1979. On December 21,1979, the Company filed with FERC In August 1979, the Company filed a new tariff with new rates for its wholesale-for-re3 ale customers that the NHPUC designed to increase annual revenues by would increase revenues from such customers by ap-approximately $18,500,000 labout 8.4%) based on a test proximately $4,294,000, or 10.1 %, on an annual basis. year ended May 31,1979. The Company's rate filing On February 8,1980 the FERC allowed a first step emer-gives effect to the climination of CWIP from rate base, gency increase of approximately $3,567,000, or 8.4%, to an increase in the depreciation rate for distribution become effective on January 22,1980, subject to refund. plant, normalization of additional tax effects of liberal-In October 1977, the Company refunded to customers i:cd depreciation and an 18% return on common equity. approximately $1,622,000 of wholesale fuel adrastment The new tariff has been suspended for investigation and clause revenues applicable to 1975 and prior years. The evidentiary hearings have begun. However, in December refund was charged to deferred detits pending the out-1979, the NHpUC granted the Company's request for an come of the Company's court appeals of the FERC re-emergency rate increase (surcharge) designed to increase fund order. The decision and order of FERC was affirmed annual revenues by approximately $11,970,000 or about by the United States Court of Appeals for the District of 65% of the totalincrease requestedin August.The Columbia Circuit, and the Company's request for Su-Company began billing the emergency surcharge on preme Court review has been denied. The Company in-December 28,1979 subject to possible refund based on tends to amortize the after-tax cost of this refund over a final determination to be made by the NHpUC. the twelve-month period ending December 31,1980.

3. Income Taxes

• During 1979, the Company made elections under cer-The components of income tax expense are as follows:

tain provisior.s of the Internal Revenue Code which re-sulted in the availability of approximately $9,500,000 1979 1978 of additionalinvestment tax credits for 1978 and prior (Theusands of Dollars) years. Approximately $1,046,000 of such amount relates Federal to a recently formed stock ownership plan for Company Operating Income $(13,952)* $10,166 employees which does not affect net income but does Other Income and Deductions 324 (46) result in additional funds for the Company from issu-(13,628) 10,120 ance of additional shares of the Company's common State, included in Operating stock. The remaining $8,400,000 does not affect net in-Income 2,983 2,468 come but has reduced the amount of income taxes paid Total Current Income by the Company for 1978 by approximately $6,900,000 Taxes (10,645) 12,5g3 and resulted in a claim for refund of taxes paid in years Deferred Federal prior to 1978 of approximately $1,500,000. Operating Income 7,634 5,527 Investment tax credits of approximately $18,500,000 Other Income and Deductions 7 (8) were generated for 1979. There are limitations on the 7,641 5,519 amounts of such credits which can be used, however, Deferred State and based on these limitations approximately Operating income 126 93 $9,300,000 of the credits have been recognized for Total Dc!rrred income financial statement purposes with the balance of Taxes 7,767 5,612 $9,200,000 available for use in determining financial investment Tax Credit statement provisions for income taxes through 1986. Only $4,900,000 of the available investment tax credits Ad ustment 18,275

• 1,412 i

of $18,500,000 will be used on the Company's income _ Totalincome Taxes $ 15,397 $19,612 tax return for 1979 with the balance of $13,600,000 available for use on subsequent years' returns through 1986. 15

\\ In rccordance with the requirements of thMIPUC, The principal reasons for the difference between the provisions for deferred income taxes are recognized only total tax expense and the amount calculated by applying for the following timing differences: the Federal income tax rate to income before tax are as follows: 1979 1978 1979 1978 (Thousands of Dollars) (Thousands of Dollars) A portion of Depreciation and Income llefore Income Tax $56,116 $56,119 Amortization of plant Facilities * $ 834 5 858 Federal Statutory Rate 46% 48% Accrued and Unbilled Fuel Expected Tax Expense 25,813 26,937 Adiustment Charges 1,322 1,m9 Increases (Reductions) in Taxes The Interest Component of Allowance Reselting from: for Funds Used During Construction 9,987 3,713 Overheads Charged to investment Tax Credit Used to Reduce Constraction and Expensed Deferred Taxes (4,3H31 for Tax purposes (8,334) (4,544) Other 7 (8) Excess of Tax Over liook "7 767 $5,612 Depreciation L 1,976) (2,265) State Taxes Net of Federal

• Current income tax reductions attributable to ll) the tax de.

Income Tax flenefits 1,679 1,332 preciation permitted under the Class Life ADR System of the Unbilled Revenues (54 9) (629) 1971 Revenue Act in excess of the tax depreciation permitted Other Deductions, each less under the Guideline Lives provisions of the 1969 Revenue Act than 5% of Expected and (2) the amortization of certain pollution mntral facilitier Tax _ Expense _ (1,236) (1,219) over five year periods. __ Total _ Income Taxes _ _ $ 15,397__ $ i_9,612_ _

4. Allowance for Funds Used During Construction (AFUDC)

AFUDC is the estimated cost, during the period of con-and AFUDC is added to the cost of the plant being con-struction, of funds invested in the construction program structed with offsetting credits in the ctatement of earn-I which are not recovered from customers through current ings. Since the credits are not cash items, cash for inter-revenues. Such allowance is not realized in cash cur-est and dividends may need to be provided in whole or in r(ntly but under the rate-making process the amount of part by additional financing during the construction the allowance will be recovered in cash over the service period. As described in Note 2 above, as of May 7,1979, life of the plant in the form of increased revenue col-the Company was precluded from basing its rates upon lected as a result of higher plant costs. The NilPUC, for CWIP in the rate base. Therefore, as of May 7,1979, the period December 3,1977 through May 6,1979 per-consistent with the August 29,1979 rcte order, the mitted the Company to include in rate base a portion of Cnmpany began recording AFUDC for CWIP previously the costs of CWIP associated with major generating proj-included in the Company's rate base, thereby increasing ects. Therefore, AFUDC for this period did not include AFUDC by approximately $5,500,000 for 1979. the cost of funds invested in the construction program The equity funds component of AFUDC equalled which were provided by revenues of the Company. 37.3% of net income for 1979. The Company capitalized To the extent CWIP is not included in the Company's AFUDC at annual rates of 9%% for 1978 and 10% rate base, the cost of funds invested in CWIP (interest on for 1979. debt and return on equity)is not provided by revenues \\

5. Dividend Restriction Pursuant to terms of the General and Refunding Mort-dends paid or declared on the preferred stock of the gage Indenture, dividends may not be paid on the com-Company during such period plus $32,000,000. At mon stock in excess cf net income accumulated after December 31,1979, retained earnings of $49,924,000 January 1,1978 less the aggregate amount of all divi-were not subject to dividend restriction.

16

f

6. Preferred Stock The Articles of Agreement authorize the Company to General redemption ;> rices of preferred stocks are:

issue 1,350,(XX) shares of Preferred Stock, $100 Par Value 3.35% Series $100.00,4.50% Series $ 102.00,5.50% and 5,(XX),(X)0 shares of Preferred Stock, $25 Par Value. Series $100.00,7.92% Series $105.94 and 11% Series The divi < lends of all series outstanding are cumulative. $27.75. Preferred Stock outstanding is as follows: At December 31,1979 there were 213,301 shares of Common Stock reserved for conversion of the 5 50% shares Dividend Series Convertible Preferred Stock based upon Dividend Par value outstandmg 1919 1978 a conversion price of $22.57 per share. (Thousandsof Dollarsl The sale on February 27,1980 of 1,500,(XX) shares of 3 15 %. Sl(X) 102,(XX) $10,200 $10,200 comrnon stock resulted in adjustment of the conversion price and the number of shares reserved to $21.66 and Il ) 48 142 4 1 2 221,108, respectively. (1978 - 58,622) 7.92 % $1(X) 150,(XX) 15,(XX) 15,000 l l.W% $ 25 600,00() 15,(XX) 15,(XX) Total Preferred Stock $52,514 $51,562

=.=2

=_==_ _ _ = = _ _ _

7. Preferred Stock - Redeemable Redeemable Pderred Stock outstanding is as follows:

Sinking Fund provisions require the Company to re-Shares deem all shares at par on the basis of 4,800 shares annu-Dividend Par Value Outstandmg 1979 1978 ally beginning in 1984 for the 7.64% series,10,800 shares annually beginning in 1982 for the 9% serics and 60,000 shares annually beginning in 1985 for the 11.24% 7.64 % $100 120,mo $12,XX) 1,(X ) series. Subject to certain refunding limitations, Redeem-9.00 % $100 180,000 18,000 18,(X X) 11.24 % $ 25 1,2(X),(XX) 30,(XX) able Prefarred Stocks are redeemable for other than Sink-(1978 - None) ing Funds at redemption prices of $106.12, $109/X) and $27.81 for the 7.64%,9.00% and i1.24% series, Total Preferred Wk - Redeemable $60,000 $30,(XX) respectively.

_====;-===========

8. Long Term Debt 1979 1978 General and Refunding Mortgage Bonds:

(Thousands of Dollars) Series A - 10%%, Due 1993 60,000 60,(XX) er es - ,, ue 0 Ser e E %, Due 1979 $ 3,356 Series Ii-3%%, Due 1984 10,483 10,483 Promiss ry Note, Due January 5, Series I-3%%, Due 1986 6,972 7,(M 7 1981, with interest at i16% of a Series M - 4%%, Due 1992 21,952 22,149 specific bank's prime rate plus 0.25% 25,000 25,(XX) Series N - 6% %, Due 1996 15,847 15,910 Pollution Control Revenue Bonds: Series O - 6%%, Due 1997 14,076 14,173 8 %%, Due December 1979 1,500 Series P-

• i'4, Due 1998 14,237 14,277 9

%, Due December 1984 5,800 5,800 Series Q - V "a, Due 2(XX) 19,162 19,206 Total Long-Term Debt 347,244 2W,134 Series R - NL, Due 2(X)2 19,398 19,455 Less - Long Term Debt To Be Series S - 9 %, Due 2(XM 19,628 19,778 Retired Within One Year 555 5,231 1 Series T-12 %%, Due 1981 24,719 25,000 Unamortized Premium and Senes U - 10%%, Due 1985 14,970 15,000 Discount 1'860 651 Series V-9%%, Due 2006 15,(XX) ?5,000 Ser-s W-10%%, Due 1993 10,000* 10,(XX). 2,415 5,882 Long-Term Debt - Net $344,829 $287,252 Series X - 12 %, Due 1999 9,302* 215,746 210,834 Lc.,- First Mortgage lionds (*) Due to certain restrictions in the Company's First deposited with Trustee of Mortgage Indenture, no significant amount of First the General and Refunding Mortgage Bonds may be issued thereunder until an Mortgage !ndenture as operating license is obtained for Seabrook Unit #1, now additional security for anticipated in late 1982. General and Refundmg On January 29,1980 the Company sold $30,000,000 of 11onds 19,302 10,000 General and Refunding Mortgage Bonds, Series C 14%% Total First Mortgage Bonds 196,444 200,834 duc 2000. See Note 10. j 17

\\ /

9. Compensating Balances and Short-Term Borrowings The Company uses borrowings from banks as an interim respectively. During 1979, maximum short-term bor-method of financing construction of new facilities. At rowings were $114,100,000 ($88,112,500 for 1978); the December 31,1979, the Company had line of credit aserage amount outstanding (based on month-end bal-agreements with New Hampshire banks aggregating ances) was $87,056,250 ($66,911,458 for 1978); and the

$5,350,000 and a revolving credit agreement with other weighted average interest rate was 15.15% (11.36% for commercial banks which permits the Company to bor-1978) computed with commitment fees included in row up to $115,000,000 (increased to $130,000,000 in interest expense. January,1980) through June 30,1980 subject to periodic At December 31,1979, accounts payable included ad-review by the banks; amounts outstanding under the vance payments (received in July,1979 and secured by agrcement mature on July 1,1980. The Company pays the Company's interest in nuclear fuel for the Seabrook commitment fees on the revolving credit agreement and project) aggregating $10,600,000 from other Seabrook maintains compensating balances for certain line of participants which were to be repaid, with interest, in credit agreements. The effective cost of borrowing under January,1980. In January,1980 tne advance of one partic-the revolving credit agreement, including fees and as-ipant in the amount of $3,000,000 was repaid and the suming the available credit is fully utilized,is 116% of remaining participants extended the date for their re-the prime interest rate of a specified bank. Compensat-payment to July 1,1980. ing balances amounted to $305,000 at December 31, At December 31,1978, accounts payable included de-1979 and 1978, respectively. ferred payments to vendors of approximately $7,500,000. The average interest rate on short-term borrowings Such deferrals, with interest, were paid in January,1979. at December 31,1979 and 1978 was 16.43% and 12.64%,

10. Commitments and Contingencies The Company is experiencing serious difficulties in ob-the ownership interest in Seabrook originally offered. In taining external financing for its construction program mid-October 1979 the Company re-offered the remain-and in maintaining cash flow adequate to fund this pro-ing 10% ownership interest in the Seabrook plant to gram and the cost of current business operations. If the other participants and to the Company's New Hamp-Company's construction program is not reduced as de-shire wholesale customers (the " October offer"); com-scribed below, construction program expenditures are mitments for ownership interests aggregating approxi-forecast to be $231,000,000 for 1980 and $713,500,000 for mately 3% of the plant were received. No expressions of 1981 through 1985 (excluding AFUDC). These estimates interest have been received by the Company with re-include $187,50r,000 and $417,000,000, respectively, for spect to its offer of its interest in Pilgrim #2. The Com-the Company's interest in a nuclear generating station pany has contracted for the sale of approximately two-under construction in Seabrook, New Hampshire, and thirds of its interest in Millstone #3, subject to receipt

$5,700,000 arid $62,700,000, respectively, for the Om-of necessary regulatory approvals. pany's interests in other nuclear generating units owned Each utility acquiring an ownership interest in the on a tenancy-in-common basis with other New England Seabrook plant under either the March or October offers utilities. The Company's ownership ir.terests and its will acquire its interest gradually over an Adjustment share of total expenditures included in Unfinished Con-Period. During the Adjustment Period, the accepting struction for the jointly-owned nuclear facilities in utilities will share pro rata the costs otherwise attribut-which it is participating are as follows: able to the Company's ownership interest until their Ownership aggregate investment in the Seabrook plant has been in-Percent 1979 1978 creased by approximately 15% and the Company's in-(Thousands of Dollars) vestment decreased to approximately35% of the total Seabrook #1 and #2 50.0000% $470,300 $307,800 investment of all participants. Until the Adjustment pilgrim #2 3.4700 11,900 9,600 Periods begin, the Company must continue to finance Millstone #3 3.8910 27,000 21,200 its construction program at its present 50% ownership $509,200 $338,600 interest in Seabrook. If the necessary approvals for commencement of the On March 3,1979,in anticipation of legislation Adjustment Periods are not obtained until January,1981, adopted in New Hampshire eliminating CWIP from rate the Company estimates that it must raise approximately base (see Note 2) and the resultant difficulty of financing $214,000,000 in permanent financing during 1980 af ter a 50% interest in the Seabrook plant, the Company's the sale of the Series C Bonds (see Note 8), assuming full 1 Board of Directors directed management to proceed to utilization of the Company's short-term bank credit by sell til of the Company's Pilgrim #2 and Millstone #3 the end of 1980 and without giving effect to the emer-ownership interests and to reduce its ownership interest gency rate increases granted to the Company by the in the Seabrook plant by offering 22% to other Seabrook NHpUC cffective December 28,1979 and the FERC ef-paticipants (the " March offer"). The March offer re-fective January 22,1980; or to any other requested rate sulted in commitments for about 12% out of the 22% of increase which may be granted the Company during the 18

period. If all such regulatory approvals are received be-holders of 75% of the ownership interests would be re-fore January,1981, these financing requirements will quired for a deferral. A four year deferral of Unit #2 be reduced. would reduce the Company's requirements for external The Company's aggregate construction program financing in 1980 and 1981 by approximately for the six-year period 1980 through 1985, which is sub- $27,000,000 and $33,000,000, respectively, assuming ject to continuing review and adjustment, is currently 50% ownership in both years. However, the Company estimated to be about $618,000,000(excluding AFUDC) estimates that the deferral would increase the total cost if its ow nership interest in Seabrook is reduced to 35% of the project by approximately $880,000,000 and the with the Adjustment Periods commencingin January, Company believes that the cost of replacement power 1981. would greatly exceed the cost of the power which would There can be no assurance that the required approvals have been produced by the Unit. Another possibility for the proposed reduction in the Company's interest in being considered by the Company as a means of reduc-the Seabrook proicct to 35% will be obtained or that the ing its immediate cash needs is a reduction in the overall Company or other Seabrook participants can obtain level of Seabrook construction. Such an action could re-financing in the necessary amounts or in a timely duce the Company's immediate cash needs, but it would manner. The Company's ability to obtain necessary result in deferral of the completion dates of both Units financing may be adversely affected if it does not obtain and would result in cost increases similar to those adequate rates ia its pending rate proceedings or if regu-which would follow from deferral only of Unit #2. latory and other approvals for significantly less than the Construction of the Scabrook project has required 15% of the Seabrook plant committed for by other numerous approvals and permits from various state and utilities should be obtained. At December 31,1979, after Federal regulatory agencies. The process of obtaining giving effcct to the sale of the Series C 11onds in January, these approvals and permits has been long and complex, 1980, based on carnings and capitalization tests of vari-has been consistently opposed by a number of interven-ous agreements and indentures, the Company could ins groups, has included demonstrations at the Scabrook have issued approximately $74,800,000 of preferred site and has been plagued by lengthy delays which have stock (assuming a dividend rate of 14% ), approximately resulted in greatly increased costs for the project. One $69,100,000 of additional short-term unsecured indebt-court appeal from Federal regulatory approvals is pend-edness and could not have issued any General and Re-ing and further appeals are possible. The Company is funding Mortgage Bonds. unable to predict what effect financing problems or The Company has been considering the possibility further administrative or court decisions relating to Nu-of a deferral for up to four years of the completion date of clear Regulatory Commission or Environmental Protec-Unit #2 of the Seabrook plant as a means of reducing the tion Agency actions may have on the Company's ability Company's immediate cash needs; under the Joint Own-to complete the project or en the cost of the project. ership Agreement relating to Seabrook, the agreement of

11. Unaudited Quarterly Information The following quarterly information is unaudited, and,

$1,000,000 which reduced earnings per share of common in the opinion of management,is a fair::ummary of re-stock by $0.04. Other variations between quarters reflect suits of operations for such periods. The fourth quarter the seasonal nature of the Company's business. of 1979 includes a rate refund of approximately Three Months Ended December 31, September 30, June 30, March 31, 1979 1978 1979 1978 1979 1978 1979 1978 (Thousands except per Share Amounts) Operating Revenues $73,957 $69,346 $72,919 $62,387 $65,866 $57,038 $80,072 $71,980 Operating income 10,077 12,324 10,291 11,700 9,302 10,i19 14,758 14,195 Net income 9,118 9,359 11,049 8,872 8,335 7,192 12,217 11,084 preferred Dividend Requirements 2,422 1,594 2,420 1,598 1,952 1,599 1,586 1,600 Earnings Available for Comman Stcck 6,696 7,765 8,629 7,274 6,383 5,593 10,M1 9,484 Average Shares of Common Stock Outstanding 13,931 9,770 13,460 9,755 11,823 9,100 11,319 8,447 Earnings per Share of Common Stock $ 0.48 $ 0.79 $ 0.64 $ 0.75 $ 0.54 5 0.61 $ 0.94 $ 1.12 19 I

1

12. Unaudited Information on the Effects of Statement of Earnings Adjusted for Changing rices p

Changing Prices f r the Year Ended December 31,1979 (Thousands of Dollars) In September,1979 the Financial Accounting Standards Constant Current Board issued Statement of Accounting Standards No. 33, Conventional Dollar Cost " Financial Reporting and Changing Prices" which Historical Average Average e pplies to certain large publicly held enterprises and Cost 1979 Dollars 1979 Dollars establishes standards for reporting some of the effects of 0;erating revenues $292,814 $292,814 $292,814 infli tion and general price increases on business enter-Operation and main-prises. The following supplementary information is tenance expense 2ni,182 203,182 203,182 supplied in accordance with the statement and should be Depreciation viewed as an estimate of the effects of changing prices, expense 15,487 29,265 35,361 rather than as a precise measure. Federal and state taxes on income 15,066 15,066 15,066 Other taxes 14,651 14,651 14,651 Interest expense - net 20,946 20,946 20,946 Other income and deductions - net (17,237) (17,237) (17,237) 252,095 265,873 271,969 Income from con-tinuing operations (excluding reduc-tion to net recover-able cost) $ 40,719 $ 26,941 * $ 20,845 *

• Including the reduction to net recoverable cost, the income (loss) from continuing operations on a constant dollar and cut-rent cost basis would have been $(58,319) and $4,589, respec-tively.

( Five-Year Comparison of Selected Supplementary Financial Data Adjustedfor Effectsof Changing rices p (In Thousands of Average 1979 Dollars) Year Ended December 31, 1975 1976 1977 1978 1979 Operrting revenues $251,370 $250,779 $257,272 $290,112 $ 292,814 Ili;torical cost information adjusted for general inflation

• Income from continuing operations (excluding reduction to net recoverable cost)

$ 26,941 Income per average common share (af ter dividend requirements on preferred stock and excluding reduction to net recoverable cust) 1.47 Net assets at year-end at net recoverable cost $345,865 C rrent cost information* Income from continuing operations (excluding reduction to net recoverable cost) $ 20,845 Income per average common share (af ter dividend requirements on preferred stock and excluding reduction to net recoverable cost) 0.99 Excess of increase in general price level over increase in specific prices $ 62,908 Net essets at year-end at net recoverable cost $ 345,865 Generalinformation Cain from decline in purchasing power of net amounts owed * $ 61,243 Cash dividends declared per common share 2.32 $ 2.37 $ 2.25 $ 2.16 $ 2.12 Market price per common share at year-end $ 25.45 $ 27.41 $ 24.55 $ 21.70 $ 15.75 Average consumer price index 161.2 170.5 181.5 195.4 217.4

• Information not required for years prior to 1979.

20

( c Constant dollar amounts shown represent historical As prescribed in Statement of Financial Accounting cost stated in terms of dollars of equal purchasing power, Standards No. 33 income taxes were not adjusted. Only as measured by the Consumer Price Index for all Urban historical costs are deductible for income tax purposes Consumers (cpi U). The current cost of plant was de-so any restatement of income taxes would have little termined by indexing surviving plant by the Handy-meaning. Whitman Index of public Utility Construction Costs. Under the rate-making prescribed by the regulatory Since the utility plant is not expected to be replaced commissions to which the Company is subject, only the precisely in kind, current cost does not necessarily rep-historical cost of utility property is included in the rate resent the replacement cost of the Company's productive base upon which the Company is allowed to earn a fair capacity. The current year's provisions for depreciation return. Therefore, the cost of plant stated in terms of on the constant dollar and current cost amounts of util-constant dollars or current cost that exceeds the histori-ity plant were determined by applying the Company's cal cost of plant is not presently recoverable in rates, and depreciation rates to the indexed plant amounts. Current is reflected as a reduction to net recoverable costs. While cost amounts reflect the changes in specific prices of the rate-making process gives no recognition to the cur-utility plant from the date acquired to the present, and rent cost of replacing property, plant, and equipment, differ from constant dollar amounts to the extent that based on past practices the Company believes it will be the general rate of inflation has increased less rapidly allowed to earn on the increased cost of its net invest-than specific prices. At December 31,1979, current cost ment when replacement of facilities actually occurs. of property, plant and equipment, net of accumulated To properly reflect the economics cf rate regulation in depreciation, was $1,464,233,000, while historical net the Statement of Earnings Adjusted For Changing Prices, cost was $895,897,000. For 1979 a comparison of the the reduction of utility plant to net recoverable cost specific price increases of net utility plant with the in-should be offset by the gain from the decline in purchas-crease that would have resulted if specific prices had ing power of net amounts owed as shown below. During increased at the same rate as the cpi-U is as follows: a period of inflation, holders of monetary assets suffer a I ss f gener 1 purchasing power while holders of mone-(Thousandsof Dollars) tary liabilities experience a gain. The gain from the de-Effect of increase in general cline in purchasing power of net amounts owed is price level $164,045 Increase in specific prices primarily attributable to the substantial amount of debt (current cost) of property, plant, which has been used to finance property, plant, and and equipment held during equipment. Since the depreciation on utility plant is lim-the year 101,137 ited to amounts based on historical costs, the Company Excess of increase in general does not have the opportunity to realize a holding gain price level over increase in on debt and is limited to recovery only of the embedded _ sp.ecific prices $ 62,908 cost of debt capital. Constant Current Dollar Cost Fuel inventories, the cost of fuel used in generation, ^ and the energy component of purchased power costs ^VC dlars 1979 D 9D Im have not been restated from their historical cost in nom-inal dollars. Regulation limits the recovery of fuel and (Thousands of Dollars) Reduction to net recoverable cost $l85,260) $(16,256) purchased power costs through the operation of cdjust-ment clauses to actual cost incurred during the period. C*'"jf ! net hasjng " " P" e 61,243 61,243 p er un s ( For this reason fuel inventories are effectively monetary Net $(24,017) $ 44,987 assets. Report of Independent Certified Public Accountants The Board of Directors public Service Company of New Hampshire: We have examined the balance sheets of Public Service In our opinion, the aforementioned financial state-Company of New Hampshire as of December 31,1979 ments present fairly the financial position of Public and 1978 and the related statements of earnings and re-Service Company of New Hampshire at December 31, tained earnings, changes in financial position and other 1979 and 1978 and the results of its operations and the paid-in capital for the years then ended. Our exam-changes in its financial position for the years then L.s!cd, inations were made in accordance with generally ac-in conformity with generally accepted accounting prin-cepted auditing standards, and accordingly included ciples applied on a consistent basis. such tests of the accounting records and such other auditing procedures as we considered necessary in the Boston, Massachusetts circumstances. February 15,1980 PEAT, MARWICK, MITCHEL1A CO. 21

) Management's Discussi::n and Analysis cf Sununary cf Operations " Operating Revenues" increased $32,063,000 in 1979 due to the effect of inflation on wages and materials and principally due to the operation of a fuel adjustment additionally in 1978 due to increased cost of mainte-clause ($21,623,000), an increase in unit power sales nance at Merrimack Station. ($3,735,000) and an increase in prime energy sales. " Federal and State Taxes on Income" decreased in " Operating Revenues" increased $45,964,000 in 1978 1979 primarily because of a reduction in the federal in-principally due to a rate increase to New Hampshire come tax rate ($1,124,000) and an increase in the tax retail customers on December 3,1977 ($27,000,000 on effect of overheads charged to construction and ex-o an annual basis), increased to $30,000,000 on an annual pensed for tax purposes ($3,790,000). " Federal and State b.6 sis on June 1,1978, a rate increase to wholesale cus-Taxes on Income" increased $11,267,000 in 1978 princi-tomers on July 29,1978 (approximately $2,400,000 on an pally due to an increase in current taxable income due to l annual basis); increased revenue associated with the op-increased operating revenues, and an increase m deferred cration of a fuel adjustment clause ($10,000,000), and an taxable income. increase in prime energy sales. "Other Taxes, Principally Property Taxes" increased " Fuel Expense" increased $39,415,000 in 1979 due to in 1978 due primarily to higher real estate property as-increases in the unit costs of coal and oil and because a sessments and tax rates. larger percentage of total power supply was generated by " Allowance for Equity Funds Used During Construc-Company-owned fossil fuel plants. tion" and " Allowance for Borrowed Funds Used During " Purchased and Interchanged Power" decreased Construction" increased in 1979 and 1978 due to an in- $7,331,000 in 1979 because a smaller percentage of total crea:e in the Company's construction program, primar-power supply was purchased. The relatively higher in-ily the Seabrook nuclear plant and additionally in 1979 crease in fuel expense as compared with the reduction in because AFUDC has been accrued from May 7,1979 purchased and interchanged power is explained largely through December 31,1979 on the amount of construc-by the fact that both the power purchased and inter-tion work in progress (CWIP) included in New Hamp-changed and the power generated by the Company had shire rate base during 1978 and through May 6,1979. significantly higher unit costs in 1979 than in 1978, "Other Income and Deductions-Other-Net" increased creating a smaller reduction in purchased and inter-in 1978 primarily as a result of increased interest income changed power and a larger increase in fuel expense than from short-term investments. would otherwise be expected. " Purchased and Inter- " Interest Charges" increased in 1979 and 1978 princi-changed Power" increased $5,612,000 in 1978 principally pally due to (1) additional long-term debt outstanding due to increases. in capacity and energy purchases neces-and (2) an increase in the rates and level of short-term sary to meet the Company's increased KWH sales and borrowings from banks as an interim method of financ-replacement power as required during the shutdown of ing construction of new facilities. Merrimack Station. " Earnings Per Share" decreased $0.69 in 1979 primar- "Other Operating Expenses" increased in both 1979 ily due to the increase in the average number of shares of and 1978 principally because of the effect of inflation on common stock outstanding and the increase in preferred wages, supplies and services and employee benefits. stock dividend requirements. " Maintenance Expenses" increased in 1979 and 1978 1 o 22

Ten Year Ccmparative Summary Summary of Operations

• 1979 1978 1977 1976 1975 1969 (Thousandsof Dollars)

Operating Revenues $292,814 $260,751 $214,787 $196,674 $186,393 $ 67,212 Operating Expenses Operation Fuel 111,411 71,996 70,500 54,881 58,511 12,538 Purchased and Interchanged Power 36,091 43,422 37,810 36,468 27,153 1,898 Other Operating Expenses 36,409 31,490 27,641 25,058 22,N8 11,779 Maintenance 19,271 17,502 14,550 12,930 10,727 5,134 Depreciation 15,487 14,752 14,117 13,791 13,522 8,015 Federal and State Taxes on income 15,066 19,666 8,399 9,733 9,916 6,358 Other Taxes, Principally Property Taxes 14,651 13,585 12,596 11,860 10,018 6,227 Total Operating Expenses '248,386 212,413 185,613 164,721 151,895 51,949 Operating Income 44,428 48,338 29,174 31,953 34,498 15,263 Other Income and Deauctions Allowance for Equity Funds Used During Construction 15,188 7,828 6,093 3,205 1,573 578 Other - Net 2,049 1,853 1,293 1,398 1,319 497 Income Before Interest Charges 61,665 58,019 36,560 36,556 37,390 16,338 Interest Charges 42,712 29,274 21,009 18,222 17,889 6,456 Allowance for Borrowed Funds Used During Construction (21,766) (7,762) (6,171) (2,661) {1,307) (213) Net Interest Charges 20,946 21,512 14,838 15,561 16,582 6,243 Net Income 40,719 36,507 21,722 20,995 20,808 10,095 Preferred Dividend Requirement 8,380 6,391 5,120 4,848 3,604 1,339 Balance for Common Stock $ 32,339 $ 30,116 $ 16,602 $ 16,147 $ 17,2N $ 8,756 Shares of Common Stock Outstanding-Average (000) 12,643 9,275 7,680 6,372 6,124 3,550 Earnings Per Average Share of Common Stock $2.56 $3.25 $2.16 $2.53 $2.81 $2.47 Dividends Paid Per Share of Common Stock $2.12 $ 1.94 $ 1.88 $1.86 $1.72 $1.50 Non-Taxable Portion of Common Stock Dividends 68% 0% 17 % 0% 0% 0% B:l'nce Sheet Data Utility Plant $ 1,043,295 $854,093 $683,893 $572,866 $505,699 $281,870 Accumulated Provision for Depreciation 147,398 134,373 122,364 110,459 100,410 57,772 Net Utility Plant 895,897 719,720 561,529 462,407 405,289 224,098 I.ung-Term Debt 344,829 287,252 233,110 217,298 231,900 123,261 Preferred Stock 112,514 83,562 84,075 67,012 67,9 3 29,700 Common Stock Equity 312,760 228,307 191,357 162,942 137,2O> ' t4_ Total Capitalization $ 770,1G3 $599,121 $508,542 $447,252 $437,m5 5219,705 Cust: mer Data Total Customers ( Average) 279,581 274,959 268,217 261,346 255,218 210,752 Average KWH Per Residential Customer 7,317 7,283 7,230 7,279 6,902 5,136 Average Rate - Cents Per KWii-Residential 5.78 5.57 4.77 4.60 4.65 2.71 Prim: Sales Data (Thousands of MWII) Residential Sales 1,804 1,766 1,710 1,677 1,552 951 Industrial Sales 1,846 1,743 1,568 1,539 1,397 1,127 Commercial and Other Sales 1,953 1,875 1,763 1,698 1,582 1,028 Total Prime Sales 5,603 5,384 5,041 4,914 4,531 3,106 Cc pability of Generat ng Stations - KW i Fuel Plants 1,229,600 1,221,700 1,210,300 1,210,300 1,201,000 797,000 Hydro Plants 48,200 48,200 48,200 48,200 48,200 50,000 Nuclear Plants (Yankees) 97.500 97,200 94,400 94,400 94,000 40,800 Pcf.L Load-Net KW 1,173,000 1,117,000 1,124,900 1,1I2,600 999,200 639,200 A:nual Prime Load Factor 58.6 % 59.5 % 55.2% 54.4 % 56.2 % 60.1 % Regular Employees 1,796 1,661 1,521 1,521 1,527 1,443 C1stomers Per Employee 156 166 176 172 167 146 Total Operating Taxes Per Dollar of 0perating Revenue

10. lc 12.8c 9.8c II.0c 10.7c 18.7c Per Customer

$106.29 $120.93 $78.28 $82.62 $78.11 $59.72

• See Page 22 for Management's Discussion and Analysis.

t

Directors Richard E. West H:n:rary Direct rs Retired William A. Adams, Jr. Formerly President and General Afanager Thomas H. Buckley Executive Vice President 1.F. A1cElwain Co., Shoe Afanufacturer Retired Afanchester, N.H. Nashua, N.H. Formerly Director. Vice President and Comptroller Robert J. Bottoms David S. Williams Distributor President, International Packings Corp. Burton W. Delaney Lindal Cedar Homes Afanufacturer of Packings and Seals Retired Lancaster, N.H. Bristol, N.H. Formerly Director, Executive Vice

1. 1. 5' George A. Dorr, Jr.

President Marston Heard ' Dort Woolen Company Textile Executnve Offn.eers Retired Afanufacturer, Newport N.H. William C. Tallman,59(33). F rmerly Chairman, Amoskeag Priscilla K. Frechette President NationalBank, Afanchester N.H. Kingsbury Afachine ToolCorp., William A. Adams, Jr.,54(30) William S. Moore Executive Vice President Retired Keene,N.H-Formerly Director, Financial Vice Harlan L. Goodwin David N. Merrill,55(30) President Executive Vice President Chairman of the Board The First National Bank of Portsmouth Robert J. Harrison,48(22) Portsmouth N.H. Financial Vice President Executnve Changes Albert W. Hamel Ralph H. Wood,49/22) Elroy L. Littlefield General Afanager Vice President and General Counsel Vice President Hamel Auto Body, Inc. Effective 12l6179 Afotor Vehicle Bodies o' Repairs Raymond E. Classon,59(32) Afanchester, N.H. Vice President William T. Fram., Jr. Robert J. Harrison J hn C. Duffett,52(25) Ptrollef6/79 Eff ; c,p Financial Vice President Vice President A1anchester, N.H. H nr J. llis,59(33) , ;, j Co n jler Franklin Hollis Effective 12/6/79 Alember of Firm of Sulloway, Warrer A. Harvey,53(32) Hollis a) Soden Vice President Arto ncy at Law, Concord, N.H. Elroy L. Littlefield,61(32) Davii N. Merrill Vice President %cutive Vice President A1anchester, N.H. James L. Nevins,45(11) y,(,p,g,;g,g, Y William T. Frain, Jr.,38(15) ic I siI Edgcomb Steelof New England, Inc. " # E" AfetalService Center, Nashua, N.H. John J. Lampton,35(8)

1. 1. 1. S"###

William M. Scranton President Russell A. Winslow,45(18) Beede ElectricalInstrument Clerk and Secretary Company, Inc. In Mennoriam Penacook, N.H' Christina D. Campbell,57(29) Assistant Secretary Donald W. Kingsbury, William C. Tallman Assistant Treasurer and

1. 1. "I#"'

Peter B. O'Donnell,32(8) Chief Financial Accountant Assistant Treasurer Afanchester, N.H. unexpectedly passed away on Hugh C.'Ibttle. Robert G.Ouellette,48/27) December 17,1979. He joined A i tant Comptroller the Company in 1953 and Treasurer, Tuttle Afarket Gardens, Inc. Farm Operator Dober, N.H. served as an officer since 1971. His breadth of experience, ded-

• Figures denote age and (years of ication and quality of judgment service) as of December 31,1979 were of great value to the Company.

1 '24-1 L

Energy Management, Conservation and Renewable Resources During the decade of the seventies, the Company has been cooperatively involved in the studv and develop-ment of many energy management and conservation efforts such as 3 ya y thermal storage, heat pump applica-g .j r tions, deep heat storage heating, and solar and wind experiments in J 7,,,f '. homes, offices and other buildings. In addition to plants using non-r. renewable fossil fuels, PSNH oper- ~1 Y [ ates nine hydroelectric generating ~ stations. Three other sites are cur- .j rently under consideration as poten- ,,' ig!:/ tial locations for additional hydro-electric generating capacity. As the G

e g '-

cost of fossil fuels continues to esca-late, more hydroelectric sites are 18l ~. becoming feasible from a cost and e maintenance standpoint. ~ f y-s J '; This map locates the Company's I i u ~ ~j sources of renewable energy as well as those experimental projects de-f' l - I 2 signed to test the ways to utilize pre-sent facilities more effectively. c.n g. m. +. g; n .4 > n.s. T i p a. .,...t O @4i ~ s w ae s s ,.E' f 2' i, C; + 0 .^ 32. :J+ w c w ~, Wind Power f + u.- .y. Water Power i g. i fgg ;.- e l SolarIIcating g. ^' g y. Eggg .~ Energy Management G- ? and Conservation IG) ; gg;.G( O g l; g g. ( o l ."g a is .g; j l PUBLIC SERVICE

)~ t PUBLIC SEAVICE Bulk Rate ) + U.S. Postage 1000 Elm Street, Manchester, New Hampshire G3105 PAID Boston, Mass. Permit No. 27 'I i -l l l l 1 l l l 1 1}}