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Ui 1991 Annual Rept. W/Securities & Exchange Commission 1991 Form 10-K Annual Rept for Eastern Utils Assoc
	ML20101M013
Person / Time
Site:	Seabrook
Issue date:	12/31/1991
From:	Grossi R; UNITED ILLUMINATING CO.
To:	;
Shared Package
ML20101M003	List: ML20101M000; ML20101M013; ML20101M026; ML20101M029; ML20101M048;
References
	NUDOCS 9207080028
	Download: ML20101M013 (125)
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ENYO i s recession strair.ed the economy of New Endand for the wcond 3trast year. El and :ts emph y-l - ees cominued to adapt to chal!cngmg conomic condmons Holding the hne on expenws, managmg to do more with less t 1 again pertonned strongly We exceeded production ef haency and sersice relubthty gaals, and w e met our tinancul performance urgets sales. res enues cammes and cash flow al! increased Book talue conunued to nse.as did the cc,mmon <tock capitah:a-t:cn ratio Our everall customer approval ranng sunds at OB We camed, even shghtly eweeded. our allowed retum on wmmon stock equity Aided by our strong cash pesition. we were able to rehnance some debt at ten advanugeous rates The pnce of Ul comrnon stock rose 25% dunng 1001, wnh a tool retum, meludmc dmdend( of 33 L in Februan 1002, the Board of D: rectors approved a 4 0% mcre.de m the dmdena to an indicated annual rate cf $2.56 per share, fallewmg bst year's mcreas of 5 21: nght m hne with our goal. estabhshed in 1900. of recummg regubt. pred:ctable mereases Os er the long run. we are strning to achieve 5% annual growth m camings and book value together wnh a daidend payout of about 70% We may do better in some years than othen. but we view the 5% as a challenging but atuinable goal Behmd this positive perfonnance were operatmg efhaencies, the expanded generation of low-cost nuclear energv and growth in wholesale sales Reuul margins improved due to a 23% rate increase at the beginning of 1901 the second year of a three year rate agreement Cost con-trol programs continued to produce savings, with overall operanen and mamtenance expenses held well below the rate of infbnon. Everi Ul department came m under budect for 1001 In reviewing the resu!ts cJ a very sanstring year, we alsa face the future with strengths not shared by many in our business We do net face capacity shonages or the need to raise capiui for major new generating construction Our abundance of fud dtverse, high quahty capacny presides continued opponunity fo; wholesale sa!es Because our power phnts already meet some of the nanon's toughest emironmenul bws, we can look to the implemenution of the I 1900 Clean Air Act as a net plas, with sales of emissions " allowances" hkely to far surpass expenses required by the new bw. We can face this future with pbns in place that have carned us beyond the challenges of corstructing and licensing the Seabrook nudcar pbnt pbns that have produced two solid years of performance in our post.5cabrook mode. We do face hard tasks. but we do so with a ? track record of achievement. We will continue to achieve good results by continumg to demand excdlence m perfor-mance and operatinns, and the kmd of customer-focused pursuits you'll see m the pages that follow {

j-ule-We are now m the Enal year of a three year rate agreement desgncJ j to allow us to recover, over nme, frc m the fman. cul hardships of the 1Ws,which many of you weathered with us Ihis apecment has worked out ven weil for all tsames it prendes a:h: eve-( ment mcenta es allowmg higher retumuf we perfann wellenough to cam them lhe predict-i abihty itself of a muhaycar pbn has offered tre-mendous advanuge> to local busmew and mdu+ trv in their budgenn c. to us for our own ~ pbnning, and to cu stomers and mvestors who are spared impleasant surpn<cs The Company and r the DPUC have been able to focus effms on hnd. ing wars to help out Connecucut's troubled econ. 4 omy with creauve rate paclages and programs. rather than bemg in' hed in tradmonal confron-l M+ unonal rate proceedmgs from year to year In looking ahead to a rate plan to succeed this apeement, we must consider the burdened economy in Connecticut. We see room for accommodating the needs of all parties witht at jeoparddmg our rebuildmg proce<s. The fact that 1991 was a good year for UI, that u e met our urgets and the needs of both { customers and sharcowners, does not bimd us to senous concerns about the economic heahh j of our communines and our sute. On the contrary, we focused sharply upon these concems i during 1001 and elevated our commitment to economic development. t in this year's annual report you will read much about a commitment that goes far bey ond being a " good neighbor ~ or a good corporate cinzen ~ We have ahrays been convmced that UI must play a leadership role in reviulizing busines in out area We have the experuse, we ceruinly have the montation to maintain and broaden our base of business and industral customers and thejobs they suppon and create. So matter how well-managed. Urs long-term prosperity depends upen the health of our semce temtory We cannot rekate: power pbats and transmission lmes can't be packed up and carted away: we are here for the long haul Since 1087, we've been promenng producnve relationships between bu3 mess and govem-l ment to improve the economic acs elopment chmate m each dy and town we sen e We run i semmars for manufacturers, covering such topics as energy management and uking advanage of flexible energy rates: we even assist them in getting their voices heard by legisbtors m j l Hartford to promote legislation in their interest. Finally, we have esublished a whcle new set l l of advantageous rates to help preserve companies in trouble and attract new busir. css. f These and many other economic development programs are pavmg off m the retennon and l l expansion of key customer groups.. a base of suble and growing ennues in the medical j i f h

t 9 commun ty: world ebss hosp:uk rewatch and manufactunne faal:t:eruch a; %!cs Lhra-l tones and U 5 Surgical and stable defense contramr4 hke skor3kv Aircraft j ) T here are further cauws fer opnmsm Els wmte ternterv has actually b:cd bcner than most of New Entbnd Not to mmimi:e the hs we kne uken jobs and kdonatt hauts koe + been lost and two nujer cmes here. Bndgepan and New Haien are suffenn; real pam. But w e are wemg a resthency here strength m the commacul wctor, perfomaing bettet than the rest of.?cw England,and residennal usage remain sohd thus producme a net kdouan hour des s increax fer iW1 If you add up w h< m annual repen has to v3. hvk at me numbers. comp, e os with other wmpan;es. we i i thmk you w'll see in Ul a company that he I I soh'eJ some sic.ificam probkms: a company i f thats emerged str. nan ever and is esub. hshmg a gomi track..rd m h.ud economic j tunes a company wnh good sohd pbns m pbse to posinon it well for the future The message cla<htevmg ene!!ence m perfomunce and senice r ~h to our customers, and nanagmg that excenense d ~ (, I to achies e knancul reward, for our stxkholJ-

r. n ers, is not just s message dehvered to you herc

" W i by your pres: dent and your CEO. It is a me< sage shared by UI's ennte management and work mu. n force. It has become ingrained in our corporate culmre We re reahsts, prepared to produce results in rough economic times, and we're workmg toward the day when econormc recoverv .i wiH allow us to produce even better results. i in clsmg. we would hke to express our grantude to George W Edwardx Jr who resigned as Ul chairman and CEO in May 1991, aher six years of outsundmg leadership and contnbu. nons to the success of our Company, to become chief executive of the Kansas City seuthem l Psailway Cornpany. We contmue to enjoy working with h:m as a member of UI's Board of Directors l l And thanks, again, to UI employees for the hgh level of perfonnance they achieve day after day. in good times and bad That is the bedreck upon which these grauf>ing tirancul results are based. i 74 / . / )r // Q,-y l /w# /Lo.w - n" i t/v/ \\ i Richard J. Groni Robert L Fiscus 3 RE

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Eueejed Company urgct 4"J ~~t soc - 2x - 100q o _a 1967 1988 1989 1990 1991 . ~ -.- ., ~,, Fuel Mit With one of the Enest fuel mixes m the countiv, U1 has been a leader in bnnng e i,ntoughout the lh,,s and N, i.1 made s about the corrpennve, pnee-suble f aci targe mvestmunts to implement ia plan for nurket w e enpv today, and m strengthen. do elop:ng a d:vene, flext.ie and secure mg our repon and our nanons ressur&e y energy mtx Diverse to ma. at never to foreign !uei tynnny agam would U1 cusicmers be dependent ~ on a sm;ie f ael source,or the wh:m of 2 Fud Mx 1972 smg!c suppher Flexile to empower Ul to choose among fuels for the most economi-al Secure: to protect UI customers from shorages, embarpes or other geo-pohtical threats Step by step cui plans have reached

n. today our Company and our customers are strenzthened by the achine-I r ents With nuclear froni %!!storie 111 and g

1991 1 Seabiock added in Connecucut Yankee, w:th Endgeport Harbor Umt #3 able to burn either coal or cd and New Haven 3% Marbor enhet oil or natural gas, with hydro, from Quebec and purchsed energy from the tra3h to-crergy plant in Bndgeport. U1 ts m a posinon to make the fuelnurket esnun Cor!'pete for ot I bustness 5

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. - -.. ~. - .C M ~i l " & f r th 3 type et a t w ege era ien He o O M c In southwestern Connecticut's shopping basket of con-a sumer products and senices, pdces for most 1W1 anct %heucJ r s sg ouac, but F# itects have increased in real terms since the earty n:n at unua'h hm 3 cf pn, tme m bte Wrs5 19%s, with an important exception - e4ectricity. 1CD The price for UI electricity has actually declined, taking into account the effect of inflation. At the scrw tine pc mname Ju:mg 1*1 same time, the quality d what Ul derrver: for that c+,.ated tne bum,r.g cf 11 m, < : breb i N mat price,like customer service and system renability, wmJ has e pu,.cu, cun w u,1 e.< c, e m u, -, W te vi d0- andb m:u.rnta-d(0 inocmo; l m 4 has increased. Any business, to be successful over time, must produce macum; censem but aad um nd Ma: u arrc products that the custnmer wants and can afford. UIs demn w ms est rd penew, %bi in an era of increasing competition and energy appers mercas:rp ta be a:Ated alternatives, a utility unpany is no exception. Ul L 1 rnu o nam,an a, 3 t us. _,,c r,..- t =... s is committed to ensuring that its pricing is com-b puchume c!c u.cn item a tr.un-t; cncta punt m 3 ~ 4 petitive while we enhance the value of the service Endeepen n.s rc>u's :n a fun.nerc cret.ed c.uc.i ma. dI' the creauen of p+s m it b:a rea and Jsp%d of vme et the rgen~s tush m an eccnemt.auv c:d enu-ranmemah wund manner Tha s espem!!y impertant gn en ic lack et badf2 apaaty m Cenwwat ey to the value U1 proudes us custamers rc exedem opeatmg efEaency, a babnced and secure fuel mix. p0w rr phiit ped 0rmance. (Uni-macon and dembunon system rehabary and est contamment pmgnms Plant Performance: In 1091. Ul-epeated geneutng faahnes n.4.e a 4. rn eHA M 4 Amer exceeded both their umt ava bbdny and heat ate gaals a w.v.s s m, 4 ,.w 4 4 ,,,m Heat rate measures the amourt of e!ccment we ne able to ex:nct from a pven amount of fuel A hgh pbnt avadabary pres the Cempany and the New Engbnd Power Pool NEPOOD Gex:bity ta select the least ] expensive means of supp!png power UI avade hty a exceeded NEP00Ls projectens and resuhed in a s 5250.@ decrease m expenxs that Oowed to the ber-tam hne

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Famcubriy j;ran!png fer El have been the ~ gMA opeutJ:;les els achieved by the Sabrook nuc! car pbnt, m m which Cl ha.; a 17 5% imerest Sabroek hu eveh ed ~ from a corporate headache into a tap performmg cerpo-rate asset Seabroek operated at en of us geneutmg capabsty for its first full year of operron endmc m m:d ~ 1991, one of the best Erst operatmg cvdes ever rewrded r , -, -, - - -. - - - ~

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-4*w 4' A J4+a.4-m.ai. &R 4 s si g.,4 Many ciectne wmpame> are ryhs wor-Cost Reductiort Controh: ned ab u the impaa ef the 19a0 Cican A:r Act en the:r in lea 1. t I wcccuf4 nun.yed t< m . faml f aci pbnt epentens But UI ha ab ass run s tts expeny to les ci, m hne w nh reud sales w thout tow er pbns m ccmplan.e u n..h teth the sp:ra and Ict-co;r prmme pd cemenente.md value ter of tic law Combmed w uh our exce! ent fuci ma and Impkmenunen ef our stategt Rewur c l custanct-enented cenicn ancn and load management O, pton Plan resuael for cumple, m ihe demon ;0 put pregums. th.s ah,aw3 l,I ta a htesc a ven law proper-t nelish Stanen en deacnvated sundby and cui num*c-I [ ~ l uen d pcdu:ams ta encrev produted 10:nample, car tuse expen,c esproah.y at EnJgpen HarNr sanan ime

bns alreal cant leu 50; than the sutate eper-t.m.s I and 2 1.,i reduced the cet ci overhau!5 at thcx 8

l manent cap 1m1t far tne 3rar 2000 50 whde there m;! uns b elmnatmc memme and h w cmhmes ph:- ~ be w:c adanana! cxperdrures relaung ta ether pram 3osophv imm nutnurn; the uns f.or nuumum a.a. was chhc Clean A:r A,.t.we're et gxc ta hase to amn to numumme them for nuunum etem l i retraf t eur pbnu w nh md! ens d do!'.ars w enh of tru.g, n and eperanena! sde:y ,y s; scrubbers and eher 50. cican up rechnc!cgv tn bct. El D'"25 1991' tcui opennon and numte-Jj may reah:c subsurnu! cash bence s as we are able ta self c!icxceWaDowanc6' we are a' located under the name expew iedme d nundawd expennbed to the Canalan tuns =wn hae m'erconneenon' was -l aad n.n provmons ef the Cican Air Act, he:d to wchin a 1% mcreae a er IW Cl tmends., i Sptem Reliabdity: wnu.n exxnses sm.br,:v dunnc luc 2 n L ~ Ma;nuinmg rehaHe ebeinc semce to cus-l l temers is a tep Cl pnenry In 1901.the Company man-aged to perform a ncrtch hgher than the excencnt year 1900 and. Once agam. beyend the nananal averap and the Cempany's ewn demandmg target Even more s:cnif-l icantly the avenge du anon of outages that d:d occur I washr=ed to only M mmutes f l Wholesale Power Market t Ul also has an abundance of hgh-quahty. relam d) lew-cut electncal capaaty aradaWe for the whelesale market And.should adamonal maer whole-r sale cpponunmes nat nutenah:c, we have the flexibthry to cu: back wsts whde mamummg flembdry by dearn-l t I vanng geneuting umts We did sa m lanuary of this year mth Engish Sunen. an older. smauer 4mt m New I r i Haven Other New Engbnd ut:hnes are impicmennng l l similar methba! Lng programs and. because ofits supe-not apaaty m x. LTs long-term wholesale prospects may actuauy #tacaw Ulis commated to th:s market for i the long tenn i l l J ( l &q 4n I

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_____m__._.. RGr;3EE.;;;;as 9 ube load into m-te etfot. t c:r-When Hurdcane Bob veered past the Connecticut coast in quated w ue and August, it turned out the lights on 49,413 Ul cus-m so crat te ubh, impresement pm;cm w crt I toners. Company line and tree crews, worting wmp!ncJ m A!c,rd and :mprmemena wtre aka around the clock over a tweday period, res.ortd ac#mphshed m dew ntm New Haen where the O power safely and quickly. At UI's Custorner Service mi on Grand Gofie sukua 3n pn,ca w d! enhaw Centers, k+sa.,u in technology and prve- 'ense ta tvth rewJents and buunesses m the area m.. u_ nnecutut st=ng Qunal appmm, l dures allowed Customer Se:vice operators to tn respond to sorne 15,600 callers during the storm. ,.t t. met,. m,cc01. t.I c3 peas ensuuan i > bcpn Lu, faster and more efficiently than befors. m 1%, cn ane6.r,to3 w,e rm;ca a lu.. rn 11hW Wt u es+n bre fem Ne wah mm Bndppt The 523 mhn pmt prop t uith the Gn-l neewut lyht and Power Qmpany wd! ensute adepre syphewf bn powa ter the area The 1:nc wd! nm l^s number or.e operacena,, va! is to en e the cus. alenpn emnnt nchnof wa mta Lls Pqucnne,. _.~ tomer be crinan on. am day Tlutrol sa:suaan L I "x con et me pmject w ul cost arMaE i has br,c aore.uvi me e imporunt as nweh$1 i muon. and w e a,sa p'ar. a Se mr.uon nuer l cus:omer needs and crecuaens have everhaul of the Pequonnack sub.cr, changed b a f2 stet more prssered wedd, Measurement Mesuk the Company undersundsthat is cuy UI empicyees' ur.thc.cn; de.hcanon ta temers, busmess and residentu! ahke cannot afford the mam anJ cpm.e customer sansfunan a reDeeted costs of extended penvn ouuges.vo!ag reducnons or in se Custcmcr Samfacten index tCitt a tunev mew buhngdarepancies urtn ent based on fxters of pnnurv concem ta Ul ett A.ssistance: omers C1's ratmg m the most rednt survey cf Dur-ng IWl, El tmpicmented sacral cusmmers cuecd both ranonal ana, N.ew Encland techn: cal a-d procedural improvements in customer nc;rms. mth resuks shewm; be ter than nme out of 10 semce to md e it more convenient far them to access residental customers commue to new l.I m a famrable mfamunan aoout theiraccouns We c also egen. mennnp.uth expanded evenmg customer semce hours 3 hnt===, m w w informat.un: w%% j

- - =" =**ad in addinon. Ul began repiaang its 1969

~ i Car 6formanen computer sptem to speed pme-ess ng of scrice uders, meter semces. bahngs and s I rece:vabks The new on-hne system, w hich bec. ns -r-anng in 1992, wdl aho put more mfomutien more e,se 9 qwcidy into the hands of Ul repnsenumet er.hancmg ion r thett abity to serve custamers more ef'ecnvely 6 *; 'f A Delivery: i UI efkirts to improve the quahry of semce to custemers are often qwie visib;e For example-dunng e - 1991 we completed upgradmg a Eve mne-long d.stnbu- ~ q tion circuit in the Green 6 eld Hdl area of Fair 6cid tlut had been mstalled in the mid 1950s We replaced ann-P m i s + ee--s ~-w. ,s,w-.--m,, g em e wm ww r ma, v m

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~.. ~. -.,. - - -.. - . ~ _..~ -. ~.. ~. E l'] 7 F AT ""1 Q. ATM he@ mmiunm(WpW e"e for a supermark't, good l@th means good sah And Appliance Removat: nMt e WMcier'f lighting means Imver costs. That4 Th:.ch the l'w c m ne !u<m er n why Hrst NationalSupcMets (nnaw W g,,,. g ac7s cu nc(7ce cm ya m n ncm a nt in 1991 to bdghten ar.d upgrade the ligh*Jng in three c( Ics stores located la ul ttfTRory. Thm@ refngenter, hee: rwr rxm mardamer 6 m UI's Energy Opportun#ies prg-ram, naast co* snN cpeanng the arjeans nml eNo b b p verted mort than 1600 axt:ues in the three stores sb red hm aende >cd bnh a texel and l to new highw4ficierg e4ectronic-ballast lighting, ic reingemt rd ethe enmanmenu'h bwh i k with an ex;sted anrmal reduction in electric ce thema8 are wich 6px od f O!do 3TI m# 'dn sumplic.n of more than one million kilswatt-hours. c,s ty,,, mmh 'a opea:e as modem erar * 'Nt* The three sto6es at.o instehed new equipment to

7. mado Tha ptrc'am ua* e w ' :

l improve the energy emclency of their heating, .g. d cd unhn the En.t htce m< uhs and ventila:Ing, air conditbning and ref rigeration sw recewed macawd furJmg twnnnue H l tems, as reconmaentled by 'Jl. As a result, they received a $54,000 incentive payment (mn, the L1 bcpn a neu bk3+_m~..;m m, nc. k,- Company and they also expect to cut another %' fcw n thii. Ud.to en, mage w. emo, $94,000 f rom their unue! electric bill. buv energ emctnt reingeuntm;,sreecm,h. R I tbn 30 kwa! apphance Jea;ers rbced UI up :Jere I mg encrcueffurr.: appbnces in 1N2. we h.ne taxd bbdni sandard3 and we are h e&nrg wh en the periaw cf sger-c!hatnt apphances 1has s*ron;1y en. braced cenwrunon and k..d nun-l agement (Cbli as a way of asasang c cus-I I tomes busmess and'esider.nal, o m energy usage and b9 er tneir enercy bil,e t.1 estmates that.dunng l@l s IKbt fra grams saved customers 44 N0 megrwan-m 'a*d "" *'*M

uw.ri - ww.w rem heues or about 53 75 rdhon inemthes:

castly brvwns the emeMy g,,,,, %, PicEt mcenmes r cently ada,cd by govem-t rnental acnon are encouragmg El to pursue these pro-i gr.trs even more agpssively rewgncmg the:r vabe m concrete terms The Carepany is currendy a!! awed to 6 4 cam ar. additwnal 3% premium ate of retum on up to 535 cDon of appreved senserva* ion programs over the _,ji j three years ef Im0 1991 UI has net annual progra ga!s and expects to eam the ennte premium a!!cwed over the 10 par mvesunent amorteanon pened in 1991. Conne:tcut enaded a bw reward- = eg unhty compames acuve m econemic develcpment

g and C131 As a icadenn both areas. Ul eyecu many of 4

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%:h EfN en _ m Ms. tgtmm op Ihrnch cdctmc 2 unety d u 1ce l To hdp crexe denund far the umpxt. apaen pncmg pmeran s (~1 hc!p, h <nxv urd l energ3 wng b6.1,I stepped up t mt pwmenen m hm War ency dCus are p i 1001 weh new pracrams ta su%i:e the cost of bulb. Textron Lyteming in Strattoni exwcts to { sdd by bans Cluh and to citer ca3h rares ta resden. save $127,000 on its annual e+ectric bill in 1992 by f tud cust0mers Beth procrarns wena in 1332 substantially increasing participation in UI's intempti-l t4e rate program, which prov6 des Teatron Lycomhg with I~ 1h:s program a a'med x manne hean a $4.20 monthly credit for each idtowatt of electrical demand that can be curtailed at Ut request. Working mr car & mn; Lud10 off peak hauts by refr;;cranng with Ul, Textron Lycoming further reduced electric i 1 a u water e meat and then circu.annc t..at water dunnc tae demand by designing and installing a i;nique automated l ~ i day ta c00: budu, ngs demand management system that is connected to 143 air conditioning units located throughout the Strathwd Ul presented a $26,000 incentive check to l P ant. the City of SheRon for its partichation in the CooIStor-age program. In addnion, by takkig advantage of UI's Agemw, gryty n. conservation programs, the cry will reduce annual Housinc l g; 4 jg,;,encqym37g..ncrapm energy consumption at its renovated CommunRy Center 3 by 22*i lnoreover, the cry stands to eve a total of cram. m nannersh:p u :th hxal banas and puh I about 30% on its e4ectric bill eince the Community Cen-kraups d'emenstrres thraugh made! mnrueen pr< ter incorporates wious energy-saving measures, ects heu buddcr5 an improve the sa'ahtitiv and Mctd.e ll includhg above-standard levels of wall and roof insula-b6 af then hem b, snt enern-dkem dxem tion, energy efficient windows, lights and motors. By and $cenals th.c leaer the home$vtes operx:Eg meeting UI's energyee criteria in rehabilitating the expenses buikling,the city can expect to receive a totalincer:the El has camed a nammal rept.unan fe - of $87,000. d6cem effor s The NanonEcmcr far Appropnxe Tedneko honored the Company with is leal Dam-cu:shed Appropnate Techn&c) Awrd br sparhead-mg the Hamden Cmi Cents llausmg Pannesp Enngmg to but the number,4 avads th:s Pannenh p has recen~cd I 7 h S m n l /b l I .e

? a Companies that recognite their responsibility to contribute Not for Prcirt: to the human needs of their communities reap the I tis Lcti Tu bd msn bnncs ca, tamers benefits in higher customer satisfaction, more moe, eutwn aw hrde etent noprent producthre relationships with public officials and mnumns and ammuny,enxe pregum, m eut community leaders, public support and, ulti-area. sush a; the Mar h et i+mes MLAmen a and the mately, lower operating costs. Further, as respon- % cd &mer Wunteer Nem a free scnuc that sible membea of their communities, companies ma,br dder pc. pic oth u eful and rewatdmc dun. have an ob#gation to contribute in ways extending beyond their business purpose. s wc k !m Tal ase den aduse en <a

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arJ - anj te w w a-te-Ul has pn nj Jes cn ni pubi a n m-kmd sen:ves fN N ei 9 L 2n pr. * ! cri Up,14 .. E g empg c:c+ety w nn ixu et. ua ana wmmune 'he Amen an Cam r kcts ne Edi r 4 cal Echa%u. 1 i s rm.-.. pg. non Cern r anJ Junar Ash exemcm orpm.anan t 1 i.,m L%r p ~ -m through the ajm:mstra an cf brge,ca:e touth Traking: maneurv gunts but b; cendua tv e Els Hmcw4 pogram m iWecpon and Jrra' Of handvdn pr0gn'i's LtdJi Nc% I!a\\ en Oilers 30h ITinmg br OrTr t + Wnan # y 4 Safety Education: emnimed o muu a number d cleanca! enetcpuvmg i l., t.crs free,ceruh and cenduten u mesures f*ce. en a dxt !a-Jaor tw m !cwer acne 7 a reachen m is semcc area. such as the perabr ant $ neghterhoods Crew s ha'.e e,ncJ.md mstai.cJ enerp awarc-wenm; Eccmcm, -,en A N,:p precum,e mmp devses m mer IMN hau cholds smcc th.: pr use m teacnmg abeut cice'nm and prccennn; clem 'com twan m miJ lW cal mjunes i: younpten Environmental: In 1091. Ul ce!d uted Arber and Eanh 1 } Days fer the seccnd strxght year w :th tree pla=re cere-men: s and pragums m each of the r'unapimes m our semeurca The pregam camed thc Ccmpany a Thue Gbre~aurd from Mdford Fride inc. a coner-t:um of the %1 ford Chamber of Commerce. mdMduals and anmunay semce organuatens g 2 In ajdman. UI commued its underxtmne af bcai commumtye erest teles mon proc..rammme... danng 1001 The Companppenwred en %TNH 9 (Channel 8 - an ABC aff hate) a year-krane< of pnme-nme specials on the emarenment. Tepts . f induded sehd wasic dispmal. air pollunan. user pdla-e ). tbn and land prescreation in add:non to spenwrsh:p. Ul sen ed as an adnscr to the ser.es and prouded Com- =- y pany facanes as shxtmg k, canons br scenes m some of f '~ j the procrams Ul aimponscred a smdar wncs on WYliiChannel 30 - an NBC af%are) durmg 10H a }$ M

I' Campaign Against Drug in add:t on Elemp!avees are rep:evmed %buse: not enh m the genetj membenhip but aM on the uv. In IM U assumed an m'ene e leaJer hp ernmg boards of unualiv esen sense dub m eut tene l ro!c m addressmg the drug abum problem m Connecr> ran Dunn;IN1.nearly 2% of L t empi yees ett As pan of th:s enpng effon_ Ul hated a sem.nr paroupated m wiuntret work and were temnaed for m October 1Wl for 80 local busmeses dunn; w hwh ths senxe j seserahrpul corporate sukunce abum pobacs were g cx,mmed so these capames codd leam new Urs GMeqc procam trams empbges j [ approaches to the probkm Reseurces wc:e prended to !1e me er readen and metcr scrac perennd w ho encourage these busmeses to. m tum. held their ewn u,JVC comJct with the C,iutrS dGrinf lwfit wCIk d3'. tJ o ~ local seminars and thas snmulate creanen of a drug-free watch out far thov wno m:ght need he.:p ikgun u a netw ork called I%g Fice Cowam UI w d! aset c:cht pdat picject m 19N. the pregum waampkmented i I of these cer pan es to run vmm;.rs m IW1 companpwide Junng 1o91 Rc!ct als are nuje to 1 The Attst appropna:e sacul semcc agenaes 1 i Us Lxus is on supportmg fledgimg and local arts groups dut rmght not recen e help from aajor instrunons In 1o91 to hdp popularce Canbbean an and artuts, U1 sen ed as corporate sponsor of a fesuval and exh6tt of comemporary Canbbean art at the Crea-f me Arts Workshcp m New Hawn Featurmg the work of more th.m 60 amsts. the eventhmught peepic from throughnut Connecticut together with pamte s and % r m i,,w sculptors from theIslands

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Volunteer Efforts: . twi I U1 empk ees are encouaged to parapan for inneedty yeastas, which 14 5 6,w.,

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mumt:es Their wcrk has been re;cpued by the Sute. rr. which h.t presented U1 with the vor; r.ct s Liut e! n% Award fer Responsbie SoculInmhen n* IW acnvd ties range frem knittmg caps and colleaing tc)s as hoh. day presents for chddren. to helpmg out at CPTV aucrians from organcmg schaung sponsors for and marchmg m Wa!k-a-thens, to scrnng as tutors m UIs - dopted~ schools-a A-9 5 s i w y e 18 e m l

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' Once the fourth largest banking cemer in New England, the City of Bridgeport has seen its population of bank headquarten dwindle. With Chase Manhattan Bank's acquisition in 1991 of both Cit) trust and Mechanics Marmers, it appeared likely that two of the few remaining bank headquarters might soon close, eliminating hund.wis of jobs and fur. ther eraling local banking support for the strug-gling Connedeut economy. Ul participated with E the City of Bridgeport, the Connecticut Depart-n oui.t-e ment of Economic Development, Chase and other ,,.,,,,,,,,n,,,,,, p.erties to develop an overall plan to encourage "'= ** * ". =cs '." w=.d t w. on Chase to remain in Bridgeport. UI offered an eco- .,, m, %,,.,,. nomic deu*+r.est electric rate that reduced p a power costs for a five-year period. The substantial savings helped gie Chase a simng incenthe to retain the two acquired headquarters operations T ~ In Connecticut's most populous city. 4r ".n A hen southw estem Connes:ut snec:es. El nsk3 A cat;hmg cold Thats why weie mad: major efia:T310 a556t m Impr0Ving the ChmJte f0r economic devdepment here and w hy these efforts wdl miensify 1 The Case for Connecticut: Key to our endeaver a persuadmpompa. mes here and e!scw here that Connecucut, and espeaalk southw estern Cannect:cutas an cutsundmg place m w h:ch to de busmess we want them ta be aware. for s example. that among the Ehy sutes. Connecncut ranks Erst in such factors as

scentus and engneers per 100 000 pcpulauen e madune tao!s per capu o small busmess imestment Enancmg per capiu o industnal rnearch laborateries per capiu o the pacenuce of cmhan jobs generated by export markets Connecucut also is Erst m the nanen m teacher pupii raucs and it sunda m the top five in reuil sales per captu. the percenage of college graduates, physicuns per capita. and educanon expend:tures per

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If I pupt t he stre n trcreme'. m the im m th rJ nam. fd ;.cJ g;wt ta hm 5 aJ ! at : s d' aHy m indndua'. stre and iaal taxes Idwnmanen ,cp. a3 g.g;u gun g,7, u,.J n n,.uw 3 as and ca crnment w cL me buune-w meh cmt r.: anj are 3 mejg 3,3 $ n.m e gng; ,3 rwy gr gg.h ac aacssde on the tuucs ppc g ga g w nc m g ;.ac NrW bt m al the tecent tun, ni sur. mA'u up the an a$ % L n e ec heh A n h M toundmg(c-nrkstu as tas anJ N.Jget singg'.c 3 the d>Jm d d eitd m M w'd aM " P 4 d t-o ceme s c -kant us rinn bu nee bwnew dew 1 Pd 9 a'd C ' e{m n!Jnj opar<en.u p rn m. x usran, base 3 ;t s. s.m a t.4;m (' a: %a kcn r;Juced k N ; and he s is us u:c b 5 - og+ qua; n. d J,c. t, < ! W A rn nc h 3 C M # d J"' M' h*n d a d aa mcwe o these mprac, ak I P1"Niu' c" N'd EJ A h itb * ** sncm the 2JunuccWkred by Connesn.a co n. 'cd '"'k"3'd W "* 'a!d d '" " ' N 3' i pared w ch rutbv Scw kno New kn G, and \\cw te:he heaa of Icne ida d W f ad M and mus Yern \\\\cstJe'a Lcur'v Cennee as u!cs us mhc 'V" Hun Cune hac d am of p A anJ p' low e-t ehhc (cur ren anJ unM e New Yak C ay. Cen-Aoum Mt h e amJ nunn. an ' necucut has nc. cuupmq rent in A ccncut ui. s cu. N'nnh pah ',1w Haun k ha to rWe @ j no. mdudmg dedu tens prepared by a IN M CM'O#dIW Wh"IIhr* ^Mth M l*"* acwunt+ni; tam thaw 3 the carrbmed fedcut sute anJ td IcmToumament for uccicnj eeuwx,s thr kal m;erre uses !rt Connectuut reudents with rea wn as creuy to the LathfaIJ hms 6c betk-mar s of WW to be sccend leuce among the but em the Green munums of Verm. nt and he Wh4 s arcas. and L' ant fcr thase w ch s cry hgh mtemes of New Hrrpshnem u cil as I ene i bnj 50uM If Canectot of!cn many aJvantaces. bea hes. Naprt 1J u.pe ( d The mmerhun m southwestem Connect cut oHets them p naScna ur aura; tens of reswn im o hxtu and New w, t ;ty The sea a sintega!!y pamoned near LaGaardu. Ken-thout and a h.u; are a,w,.c at Fanu, r ncJy and Budley miem.mc nal anpom rJ Jawr srJ1 to Ke+pir** Bwnew cuch.ent regenal a tperts m rraderd., st Ha en. Dan-c Competitne: bury and West;hester it prende3 busmess access to ana. Wh?e alanuaxsiamm N4 hm mustment banis, and runenal and mtcrnrional tmhmas sd nudnunchen.ng Ul marbcads leaders cf bramg. govemment, commerte anJ til-s to encounce heaa of mJustrul compamo to g7y pastpre pertanally not just through kebbpts n the The 1Ltm area sen cd b) U1 Fas tuo el !ceslantt prxcv ta bnq about imprm cmcras L.1 a the brgest cep water pom m the northeast s/nued also ma,n,cm; compames tmm o,nc midde manacen 5utes and unusual!c ocd rail anJ hg.hu av mporu-m leestante m.mcrs l l non The many compames that hm e loemed headqua. ~ U 5 "*3 E"""d " ^"" h "*d '" J i ters and dnasions here mdude Crneal Elean: mbntur aJmpfway w nh maapal Mat pm Hubbe!L Wnky Arcraft. Textrnn4ycemmg and l' tt "C'any m Endgepert and New Ham n. to he!p the:t Er Wh mey The wide range of nupt busecs has d e ha!p,& rm l aumeted hu:h c,hber En.mcul. mvestment and support semees to the, in Bndgeport. Hamden and New 7Ag Cme of Buen In tha prxram. Haven. enteti

anes pronic mcenm e, to hdp instauted m IN. u e txus mtenselv en one un e l

I n o reneurs g:.m the!r bus nesses fereign trade anes nettmg that an's busmesses wah the senxcund in Ondgeport and New Hmen and the Connecucut re'.ourtes they need ta sumve and prosper We nuke Wotid Inde s,0cunc n Md snmulus to the vea's mutuapal govemmens aw are of the speahe needs of exporting amty Incubror tenters. mdudmg the Bndgeror' Inncouan Center anJ New Haveni scunce gP L M9

e thcu ha!" m ed dein anJ tt c : rp ru: 4c cf wbric crew at a te'ct pu J huhh) bu h.'ts i m t!.Mk N 10 thc hej th g {the(cin-([ , A p,p ,4 mun'n ta A L 1 braudt m LMc Or J N. < re t 4 ew' wnl rn kancse N L i n pmgum ta Mccp n in Nal anJ pW to wetL w nh iblp iinr 4p' cd n t$c x 4 i t hec Wtn-b c utc n Pa2 be d s ; wpm

ne ma that u nl tan f&k a bnjn p,n n unJ to atht ww om P"' 10 k"U N ' b F"" "
d f " M" 3' I hJp laal F nca la esped ib pr am a o prw me sua (1 app: cs,o N ru fr m uc to h ul e,Jc, cah w armne, f,i em me bwn3s pub 3unss,ch po sgdbs rc e P.o a9th thn hA( ' (( -

s 't d! d thc arca ct .b t c r pr n s i e nCJctme !d W m cd sc1he,p nermes the i p or i num a." th s s qct.enune J ttst Mcs u nh um :As th n. ,.w p,, a -g hy e 3 u,. 3 m un 4 3 ac s ct pui scmses During 1991, the first apphcation d Ul's T g W.c W m tIo!en wi O on h er-assiness Arrmery rate helped keep a long+stabikhed h <nc bus and beh nd ih wenes w ah mamapu manufacturer in business end saved some 150 jobs. tn uhcr uhes anJ sute accnacs t ? bc:p tr4 WeJ When this autonettre afterinariet equhwnent supplier started r.periencing firsancial losses, R sought and wmpan:es e,ciame thc;r ananaald ff. cult:es and ta recebd tax concessions fran Rs munnelpallty arid the team maiar banc ses wnvJerng idumn eumJe er,te, as well as concessions f rom its unions. Despite eut area A ccnctM rulc n that M of the emwth m an hWtorh, the mandactwwAR000 per year Ul atu tesu!M (mm expmp >n cf nu.vd bus nee. wel customer, was still orsable to turn a profit, nea buync+upphre the rema;r.J<r l1 mt3 m a flecognidng that steps had been taken to numla ef uan inadmnpeucl sem<c3 and spcal improve effkiency and profte potential, and expecting rates that the market for the company's products na# revive, UI negotiated a SusJness knewy rsie with the A small manufactudng company targeting canpany, ena ng say Rs e ectrk international construction trade markets found its w a War pwlod. assembly costs getting out of hand Ul helped the com-pany relocate from outside Ul's service imRory into Ul also conductsd a full-scale energy audit Bridgeport's foreign trade zone, where R receives tai of the company's operations te ndentify potential ways advantages. Ul also helped the company obtain third. of improving ks energy effk6ency. The audit showed party financing to gear up 61 the new site. energy could be saved with modefncations to lighting, air conditioning, raotors and electric f urnaces. The manu-N...m q dief.ura.o.aa, Petauscl.,1rew e-facturer decided to implement the '+ a.wf.s. m:c< cletmary as no lenger just a pradxt ta be trade Today, workees continue to punch in and out, and the and dehvered. w e seck to rnect the w hm,e m' ettrum of marrdacturw continues as a contributing member of our custamcrs un ng energy needs the Southwestern Connectkvt business community. A maior manufacturw tegan actively con. Our Gyune f nry rate un be oficad sidning a move out of Connecticut, partfy because of immpandad @w er m en m 4.cr ces power supply disrupilws that sometimes shut down its CI"IICF"CJIO"C# "#!'#'I#" C"""#h'" *#k# assemt,ly lines. Ut nut only upgraded Rs pm @ O# #*P"*"" W" U ^" " cables but also identified an inadequate customer f"' " ' " " # # # hackup power system as part of the problem. Ul engi-i neers installed switching to automate the backup sys-A difh<u!r ctonomy req.res winattw and f cuNo UI ha thme quahnes and w e te demanstut-i tem. To ensure that the customer's operations remained up and running with the least possible down time during mg them now but wmpeten n nat a wmenne thme the six months it took to manufacture the custom and the tred far the pmgrams and tres a c hn e dn ci-l switching m' af,, Ul also equipped its swvice per. oped w ul nct ca acay onte retemn er.ds liuuness ) sonnel for ge'ck off eour response capabiuty. means pbs ;ob< mem opponurun, and oppanung reaunes encrey m order to be peped 6 l'1 wdl con-1 l A hule k noun fast is that L.i.w, etall c!ct t;nue to work 23 a pannet u nh buunew and govemment tnc um have been impranne byumpanen w nh rates ta mamum and enhantc ConnetucutWmpetmve of other u: dines uns impras ement n eyected ta wn-rdec, and cnsure that the adunuces a<hics ed for the rmue. JS M e mJmtJm f ate Sublhh w hde Utes CI4e-Company and for c,ur wmmunmes never end p _4 i

p hhard 1. Crosal hhard L Cresol(19881 ~ r . y. !m n Robert L F)eevs lohn F.Croweak i1987) Roland W. Comsta h bphen F.Golduhmidt ? t L HQ Deden (19891 James F. Crowe thrt Haran George W. Edouds, fr. (1985) 4 Lees L Morgan Ahrt N. Henrk kses L I ? I*h" Ik I * ***ti l l'III Dadd W. Hoskentoa ,t. .c. Rotert H. Hyde Norwkk R. Goodssmed (1974) r.. ~ . s, t% Iter L Eartet a r, L len MsAowskJ L Robert Cuather (198J) .r-e 4 04 t ~. 1 o.. r -. - 4 4 t D ~ ~ ~ ' '

Whad M. Bornemann lames L Benjemia s:en.

Detsy leenley Cohn 11989) s v,1 e. William A.Dder d , : v, ' * ' ' ~ ~~ Mary 06en Manthc! m,. F. Petrk h McFadden,it. IIS87) r, etc 5., 2 i n" hn. Leland W. Miles (19781 t tf Frsak R. O'Keefe, Jr. (19891 hw4. ' # ' \\ T- 't Wimm 5. Warner (16861 q 1p 4 J E g A E 7 24 3

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_ \\ g ? s' p Mannelellissuhs of Opwation ($0004) kks dekctridty-Reuil Pddental i 2> "1 1 211f91 $ 205.163 $ 2N 170 $ I M 740 Commercul C 234304 219.852 206 N1 195.972 inkstrul N 95 44.526 92f55 96 665 IN.354 '] h iM 10.5 % 9.043 91L 9.4to i Toultteud s' W $51157 52L833 51536et 414.546 \\Whic{l) H 2-85.657 77.9h 63.2t 3 54308 j ' Caher cperatmg rntnues H21 3332 3 149 3.5 70 3077 Toulegratmg tncnues t' .1 f40146 N9106 562201 M2331 1 [ fuelandimerchage crqy - r.et 1 Retail-own bad H 1" 144,415 153,919 340,973 333,,73 Widsale t! ^ 20.117 62 M1 53 F37 51311 Capadry purth8ed - re R J3 17fG7 23.054 13 gp 37 3 f Deptetwen '2H M.526 35.618 24 m 37 nc Ckher cperatmg rJpenn exddr.g tu expense W 2' 1R592 155,282 133f 2; 333 3g5 Gross conungs tn "U 25,% 5 24N6 2394 2M7 i i Cher non inco nc taxes , e{ 24f'48 20.274 21195 17 W v-49150] 477354 42429 43.294 l ~ Toul eperaur:g ex;rnscs, esddog mcorne tnes Defened retum Scabrtok Unit i 1Y 21N3 0 0 0 AfUDC 'N 3 443 c5 443 75 6 % Pl419 I

Cist ron-operating in: ome (kss) 7'+

18Ab (6.3% 22807 22120 ./ Before ta effect d5FAS No 40 W 4F9 (213.374) te.l k ) (120306) Interest expux 04,056 91.126 WO22 M7N img term dch tF 15 4M 22f49 12.0f 9 9.228 Other _j lotal D in IN.524 113 975 102 091 97.928 a inconetu expere 1 4 Optratmgincorn tas c'i 43493 37,963 +4.043 50133 E!Iecid5FA5 No 90 in IJ45 161227) 0 3,262) 03J79) e Nonqrratingincome ta DV 09154) (UAV) (12f6 (3142) 4 Teul 2' ;. 26.064 (63.172) 24.497 13.193 t t Income (loss)bebre cumubmt dint of. 1 . cxcounungchange 32B $4NS (73.350) 78 6D 86:9

Cumuhmt effect of change in accounting fa proprny taxes - net of tu

'W 0 0 0 0 Netincome(W) M"' 54N8 (73,350) 7869 8.649 Prefened and preference stock MJends M 4151 8.233 11.34 S 11353 . letsome (W) appbable to common statk 5 M $ 49.297 $ 181.5SM $ 67,291 $ 0 304) i 1a:a $ 98,% 3 $ 93J89 $ 113f95 $ 85 M

Operats mcome;

.m. RnencialCondiuon ($000's) 1. . liant in tervwe - net il 2m?I $1,2N.173 $ 562.473 $ 560.930 $ 563.210 1 - Construcuan work in pregress % ~71 50,257 675f31 812.246 737,169 l Piani rebted regubtory aut 0 81JM M.39 Mf03 ' W propeny and imutmen:s Ls.' 00,006 91h43 83.660 76.032 l* 1 Cu: Tat assets 19 O 161,004 170,823 1M.270 122.075 Ceferred debits H7t3 741.924 605f% 653,418 610.913 M"* { TotdAuts 5' 9 M $2.252.426 12.1S81N $2365.003 $ 2.178.002

camn w ee

. Cornrn005td ectuity 3 Q ~71 $ 379,812 $ 362,534 $ 473.6Tr $ 438,$tr4 as ccutmg d enacr4 i ! Prefenedad prc!crence stod \\ Not subytt to mandgory redempuon e2 R 00J00 70.0N ' 70.N0 70 E 0 Subyct to mandatory tedempion 0 0 0 34.000 40 000 i '"8* "" 8 "# ' l - Long-term debt excludmg current porwn Wd 899,993 868M4 662287 767,559 ZNh" Noncurrent hal&ies e ~73 97,433 107 Jet 111,c71 c5.070 ! ' Current portion dieng-ter n debt. 3N 41.667 18f67 3f47 28.f47 M ira M rs j G m enwa * '! Notesyeyable IW 15.000 45N0 0 0 i &cunentisbstrs 127 D 149,000 142 878 122.237 117.0 @ -h nh id % P"O I ' Drferred credits M t +.1 597.231 572.445 687,227 621,133 "*I I*'Oh i cemen Tot.d Capiuh!.ation andliabkies - 52 N M $2.252.426 $2.188.230 $2.365.063 $2,178,002 r w ernena r 26 J im ome tatwrr.c cr.m a ...~. .k_.,

-,,t-e gl } '.g ?4, ' f W v 5tock Data C ,, nurnter of ho miaa dmg li m % 11.M 7,748 13fe7,749 13 M 7,743 13,M7fA4 ) g.

nber cWo cyterdeg at 3 rat <rd 11M2 349 13 M 7,7,8 13fa7,743 13p7,743 1397,74e j

Vf cimirgs (k%) gr hr (mup) $3 t bl) $3 55 ($ $ stj $4 es (50 24) ] ILd vabegrdwr 124 '4 $27 M $26 l1 $1411 g31 9 I Aversp ttturn en equiy i Total 13 ?! t 133 1 - 18 88 n. 14755 _0 7yg Othy 11 b t 1397) 20211 32 91 % is 341 IMien35 dederd per dme $2 44 12 32 $2 ;.2 $2 32 $2 3y 1 WLet lh e. [ lld $ 9 125 $ 34125 $ 3423 $27 s0 su te l in DW $26 P75 $24 M $ 10125 $2125 i y Year <rd $P aV $ 31115 $H 25 $ 2f. P 75 $ 2t,8 n i Net radi pnmded t y (peravp azim.ku i dnkrds ($ Ws) $n" sulu $ 31.4 37 $40cc7 $37 p C> rial c.verduts, tulair g ARTC $M 157 $t.4 019 $77p41 Sq7n $ n.2n _ anwar - .r Other Nancialand StathticalData Lb by cles (Mwm) Krsderad 1 M1_447 lKe7x lyn v1 If 70,31g 1,7g31; Com:netdal 2 347 757 2.254343 2.254PN 2.1742x 2p6Ea irdus:rul W 71 Inc,751 1.lW.119 1.1%3 b 1.2 %.151 1 d Other Wil' 9 013 (0.427

f. l.G 62.2 %

/ Tou! 5 M4.M 5.2N N4 5P7DN $ 292157 5 125.01 Numler of rcud custemen by du (a,tragr) Th a ntei 2704 275A17 27t} 5 274 & 4 2 7lN2 CunmenW

21. N 27N6 20,$ M

??f3 13,101 [ 1rdustml p 319 97 337 ya Other i VI 1352 1316 1.267 1,141 v. -n L loul .U5 451 W.11t 30 7,s74 30sj44 wgs ~ g Syvem regremems (MWlf) 5s4147' SN1.405 S ea3N2 5,541 g s 433,s p luk kud - kbn 1 14s P20 1.054fa] 1Wy 1,132,j y 1 pf, p GeneraungcapaW) - gak 0 he 1.470 6 1.449.f00 1,28 afx 1.271se jywap i helperaten tra grtenuges 4 Cul M 41 N 37 42 Oil 21 24 37 4) 37 Nuclear 2; 20 Il ll 10 Gyrncrmn 4 o 9 7 1 i Cm 4 3 3 0 5

11)

3 3

1 1 4 5 Revenues - rtud sah ($MJ s) l' t

l' '? V

$M93e $ 577.f,ll $574 422 $wpc ICA (U.4 m PM (44.77e) (50,0s4; p3 5l4; 5FA 14314 8 211 0 o y Tcul l'0 314 $551M7 $527f13 $ 515,3M $ 4;4,545 hvenues - reuil 9h pr IXH ber.tv j! IW 11 62 11 32 10fa 1085 10 p ICA p 72i fa Mj (043) il 11) (1 24) 5PA 0.N 0:6 0 0 0 ) l Total 11 is lato

5 9 74 g ga: 0) hMa the avulauve c'Jec d Furl and crtfly (tr.t per )MiI (ser:tQ 2ti 2 63 2 7tt 2 53 2 54

,t accountmg change kw html 3 11 2 87 2 g3 2 74 238 ff .maoPal "1m Nudear 1f2 1 55 0N O87 0 94 LI P t mm.ta mercawd enmrp by p 53 p NwJcr of emrkycs 1371 1,587 1f27 1y20 1yc4 dwe ~ Toulpayw>11($Ms) $ 7131F $ 00)37 5 65.175 5 62 3 7 $ $7,207 1 3 l h 4, 9 Twa Uwirinlit uwatisc Giutw, .. -s - - - - - - - - - - - - ' ^ ~ ~ ~ ~

Management's Mscussion and Anahsis og 1R Financial Condition and itesults of Operations. 1< h i Ma)oe lofluences on de ratenal mg ucatn.ctud the reu.s traMc an our.u l financialCondition the Con pans investnn,t M Scht+k Ut at 1, as wt'J as t icaboon of the lov b et the rer n hef patcJ by ihe u 1he compny's faanaal cenluon % DE m Mau y 1W den lawd on daupt c-improved chiefly n a rcsut of the ad.ievement of commer- ,,, pgg.ngs t rancuh onJwn 36 icDnu the 9 cial operatun status ly 5cabtrek Unit 1, which ouuned IMdd<m - wmkm WAMM o onJune M IW licu event las pennated hdl tchtun putadaw AwJ E dw m4+ 3 of the taefits of the 1987 apectncnt among the ( empny 3,,pg

p,g 7 ud Connecucut eh ah irpresenung the pubbe rep tJ.ng n

Uguklity and '[ b Capital Resources 1he conyp capahrge n,cntut pcsendy popcj as th ,i >~t 1 bbh M N ww ' f; construcnon hogum $vw 5 sn a $um s a3n 5nm long term DMiatunxs wu) Up VnbiorprJen'pnorMrpnuenu e 7W ww l0 w ly m _r^' 0;mulhdempoonsa) wm i Rs TotalCJpt:al Regtmtments iWo $1(# M $My M $NJn $ pa4s ( .==w

==.- 3 0)lreing redcm;wn pmmes .1, 6th >rg 4, l he Company pevndy estrutes that in kbnte.IL cmla 31.I W i 16 9 1}' toul amount of cash on hrd ard tem;orary inusmera ut N1 c.ch p: ended by opr.mtx a.mmes 1IU b ef the begir.ning cd 1992,iu net cah p onded by cperaung M M pny!cJ th (u <d dfcaner amunes d acthi6cs,less dnidad paymens, dunng 1992 arJ the ret _7w ,y,( g3,,jf g yg gy pnueds from the sale c'l $100 m&n pnncip! amount of - Dad po (b c6 debt secunnes en Jmua y 15, lW2.wt1 cured tu taul C&h imested E pbnun L h ;nuJr.o Lel ea h "i I projected capiul requirements for 1992 by appremately q Nm bom ,,f4 g $10 2 mdhon 1he Com;uny ctnendy anticipecs dat its pmjected toul capaal requirements fonhe yea,, lW3, Lbnm tw endo 31. lWl 5 25 ) 1994 and 1995 w21 exceed its net cmh pronJcd by opem-4 ing acthines. lcss dnidend pymems, dunny thmcas,in

&"l""ib "'Od""I""U#E""

amoums w hich cannot now t c pedicted accurady, but nent wah a pu.cp of turls. whxh cuno.th conds ta h; which may be suhuntul m.the np' egre depenanpn k,uary 25. lW3 The tenowmg hms of dus bahty is $ 75 e the levch of the Company.s saks,'who. leuk a11 rc u:1 ran, "F"F'N""" - o t

E 7 PC*""'

operatmg and maintenance caso and uxes #1 of d.e com """*#M U#P"*d" ' panyt cIptal requhemenu that exceed armbble net ca sh

b"#N**M and aho penats the cmpny to 7

i' wdl'have to be prmided by extenal fmancir.g and the m"e nud et in hov. I" "' 5f#" N """ " ""F Compny has no commimrni to pt mide sui h f manang Gepany at fa rd imetr~t rms detenraned by the Fmo-f from any source of funds other than the rnvMrg acd t a agreemem dcwnbed lebw The Company exp cu ta u-dolLr inu rbank m, ket in 1 onJon, by the ccmbte of isfy its extenu! feuncing needs t y issumg addotu! shun-dg" mdo in nw Y,4 m h Wng anb cng. r:) s ten l! a m: tuul dverse dange m the busmess, g tendht, addaionallong-tenn debt and equsy secunne i m m aenodnon bunM m otha-4 ahhough the commued avaibbity of these meth<ds of we ep a pe ddompany arJ its sdmJancs, on 4 fmancing cannot be assured 3 % a co% bted tuns, should car,the lunh may dedme At Decemln 31, lW1, the Compn > lud ta lend a31noral money ia the Cornpny unda this Q ;- 3y $25 3 milhon of cash and temporny ush invevmond, an rn ohn aedit spennent, ahhough bonowmp outsund. inacase of $8 4 mdhon fram the babne at Decem!c 31, ingat the tmr of such an c(cunena would not then M" 1990 Thecomrmmsof th:sinaraw,whuharedeuded to one due and rayAlc. As o! Decend o 31, lW1, the in the Cormhdated Sutement of Cash Hm are sumnu. Cmpany bJ Si 3 mi' hon of shen icnn h >nowirgs out. M n:ed as foliaws sun &npnder a revoMng uelt agterna,t, wah a poup z{ of turb,that exphed on#nury 31,1992 .n-1 s s k ..i i N, i I V 1: - U L 2ib m

7-g ;,, s , m,y g pys <4 7 7 1 '"Q 1 ne Capany has sak and leavhadt perdent pmr produnits ard cogerrraram facihirs ( anangenrnts with a funml msututon pnwhng for 1.Wird berg Intmwonal. Inc. has been kened to faub. nudes. fuel fmanang up to $70 nu! bon for bbroch but tate prtupaton m a popowd )nmt venture relanng to 1 and up to $10 mdhon for Mdhtore Urnt 3 LYder these purr prothxton piants abaud thted Remurces,Inc. arrangetnents the Company pn rent for the f ad dunng WRlhrnes as the prent o'rpntxm lor th unrrgulated the tme w hen it is bcmg uvd m the nudcar reaaor of the buweva cah d wtx h is mcorporated separately to pr. I gerwratmg umt in amounu that are cAubted to retm-tupate m busmess ventures that wd ueplarent and b burw the lewt for the irect costut has mcuned m pur-enharxe th clettnc unhty twress aid wnr the intnests N dusmg the fud pha its fmanary awts wah a percentage d the Capny ard rtWweholden a d araonrn b re: urn therevn bud on c fluctuanng et of thirth y im whchatrJ subdunn d LT,tl comnrraal pper tortmnes The Company is eN pted to msure the fud and to mdernmfy the le.wr apnst all hasem mwtiorated 5mwestum Pnpenn W n par. tupung as a M panwr m the mmbp of a nedwal habthry. t.nes ard other expenws incuned as a iesult d a hotel baldmg on pnpeny adiacent tM execumr offxe ownershp of the fud fxh be a tennmable on tw buldag m New llav:n A ward wholly.owtrd wb. duty 3rari notKe by e ther pny. but it is termmable by de d URI a hennaRoerpednc, shsh is paniapang in 3-lemt. and the Cornpny mW punhase the fud inun the the ontk nrnt d detria heanng and cuohng uter fach. j i leswr. upon the ocamtrx e of any one of sntral nrnts, nesiti de dammt kw Ham aronchadmg de Act or the teau d the insurance polnes on the fuel that is etog cema kr a new dhce tmer ard pamapnon as a (g uv luing any adstne change m the federal Atanuc Ertrgy not sausfxtory to the lemt, the lewd becturung subW 37% pnner in de energy cerua for a trw city ha!! and g dfre tower cumplex A tidrd LTd su'tsduty. Precinon (3 to the Puble Utary Itoldmg Compny Aa of 1935, or any Pmtdric, pnh ppesclated qwpnm ard som y other statute regulating pubhc wmce comparues, as a to de oms dannual buudmp and hdanal fadh. L: resuh of Se be, a fadure to obtam or rnaintam any ties. A i urth l'PJ s.4m&uy, Anerkan Payrnent Systerm, required governmental approwl of the lease anangement, IAC+ N6m qurpnm for elemmic das pWngd and a nudear acadent at the gercraung facdity gmng nse M pensems mad @ cwomen d unboes. indudmg UI. h to liabaty or damage in entss d $ 10 m@ ort At Decern-i at Wbeinema that sent as M nh p-bn 31,1991, approumatdy $65.5 mdhon d nudear fud " a apngh WNactsdde Compnyimaudor. was being fmanced urder these agtenrnts f ( ; r. taed the investment of a maximum d $ 10 tram, in the s heCompnyabahasaResilPadSp sagyteme, of the Compnfi asses in all of these subu&- [ syAy m+af, maim -npned.w m. dun e F 'C 'u fmancmg up to $30 millkm in fast fud purchmes. thshr ) : '~ f tha agtervrnt, the fmanangentiryaapres ard asores ant-Q l,.

j g ural gas, coal and fuel ou for sak to the Company,and dw y " f.

IMHO ", 4 Compnypurchaacsthesekasilluckfromthefumsusag% / K,4 n Me ennty at a prxe for cadt type of fud that nimbasse dmM J

1 fmanangentityforthedirectcostsitheguurreshpursk d edismlii$3.67persewall,7mikoner$.12per. %

7 I chasmg and stonngthe fuel,pluse au W p ' ' 1980.IncensedIsamenoencymedagand J R p i

5

$19per Ann,pdiendlyonMM6Q Q l aninvemoryd6e fueldeimmlweid tM sehsempim6eapplanc? ryh j ide.d..wsp v w^QQc Ductuating tmerest ratc ondity ~ ^ .euug4 r-maaappain awrork.ne Jesssidayslar5quhseekWp QEP insure the fuelinntcnes and to $senseitydn. enury apunst all habary, taxes and adur; /idabuluned. appen,eestasTMfMT ' jg ,p . M ygg3 gg"syvgp 4[ we+ WAm ' as a resuh of as ownenhip, secage and suit d ee Compny Th8apeemencculmaily N*N I'"Wul8W+ % f ary 1993. At Decemba 31,1991q. i,s y 'M889 E, ' sK m'mondIssilfudpurchasesweebelns I t yhNh" " - 3 } f l h* *C'"""- ^ un.s f., w ' g} 9 _ 1 Bndgeport SecnieCosupay,s. i ]%j 9

tre,om aiallenus to LAe thrborsmenn.na=4 Camer,tn 9

t , '3 pan!dpaiein dedadopommtof g v Hy ,Q; @h.pomprodmaanwsmses, ^jk u . t sioninwenngamensindu l u nme ; a ~ wwwsn mmmmw.kww y

] 77 ,s Q L ad itng $3 9 mdhon m tornue. Wiesale capary rne-inarati by 5 31 per shut due to che refurd of ammnts nues stre up $5 9 mdhon, to $22 4 muert prnvusly advanced by the Cepnv m furd the $caba ~ Income for 1991 abo imprmrd tCll 2 milen ce l a6 gr share. mrt lo# as a resuh of inara<d Cycatmg rnrnues Le 1W0 :naravd gnenten oflow-cest m.dcar enerp pnmanly frem sea-from their 1#9 kvtl. due pnnardy to the IW0 rate bmok. w huh began eperatmg mdwsy through 190 ard mcren ard an accmal of the enure torf,t a!Lwate lot operated in INI at 6Tt of capat) onJudmg a pbnrrd 1+N urder the $rA retad lukwan hour sales kir IN0 10-wcek rduchng ouug) Connutn.t Yankee sen.h. were 19 L bekw Im.due to mJder urather arJ a wrab candy m7mved its capary factar to 72 t Lir the year, enmg repmal ecorumy ethet by extended outap at Mdistore 1 wLnencrami at onh' 29% of capaty Chrrau nudcar gerrration oper. b 'N '*P** t" # ated at t% el capay dunng 1Wl. Lv thystem pu*pe E '#d ^"

P'"d* # I""""E

"# "I higher nuckar generacon resulung imm the adtbdev of Ohmng imprarnas m sales rnargm scabrook (Vut 1, stuch trwre tlun oftet the cilett of the for 1Wl were mar 2ses m oper2 tag expates, exdusnt of rnbced avathhhry of other nudear uruts m IW0.

non.remmng itens. of $28 9 mdlen on lWO leth, c5 Reduced authhbry due to idedukd cutage be mutuul $ 1 18 per sharc Cyera: ens. mamtaunce, ard capary d the Companyi tso most effnent kel-futd generarmg i expatses inaeud by $6 6 mdhon in ! 991, refkcung $41 units abo contributed to higher energy cans in 1989. mdlen for the induson of flydocetcc p) rrns. Capacy purdused expmse decreased in 1990 Inun the CXher cperatng expemes inatavd $ 11. 7 tralbon ice 1999 Inri, dae to the tenninaam d a large espcity pur-deprecuren, refkeurg a fuu ) tar d Seabroek charps, dwe speenent sith amther utihty $3 6 mJ1on for other"(nusdy property) taxes, ard $7 0 mdhon in unrecmtred fuel expeme, about one4mlf d AbPW * *" ehh was due to the hkik East war Stre runup. expe es tracasca m WM1%due pMpah m

y' the recorde.;; 4 Mrnok Urdt I cpastim ard mainte-Non oper.ang income after tat. exdusot name expaues beginningJantwy 1,1M Deprecaton of non recurnng nems, dedmed a net $ 16 milhon ke expense incs.med in 1990 cwer 1989, due primanly w the 1991 from 1990, or $ 11 per share Expeced dechnes (due cumruncement d Seabmok Unit I d'pedatim, sitich to rate inarases) in deferred revenue asvcuted with

~ beganinmid 1990 Mincreasemortthanofbetthe accounang br scabrtok, a!!cwaroe for funis used during r* ~ ~ absence d additbnal MGhme Urdt 3 d recatim durges T construenon ard inteest income were pruJ1y oHxt tri. ' ' raxeded in 19tN pursuant to a DPUC order o redace Urs. o $4 5 mdlen m after-tax interest savmp achieved durmgh ' pojeard 1909 canunp m the level authan:ed in ks 1984 y hrge-scak refmananp. rate (kmlon by tneans d non< ash darges. t .m: N f $ 27 per share below 1990 resuhed Inxn a dechne ta one. - the precedag year, ddpimardy to the discondrraance d 1 4 l nme gams fmm $104 per share m 1990 to $.77 pr sham ' 'AIUDC ce Salwook Urs I coMdent wah the com- , 7 mnmemmt d de plusuWe d de unk into rose baw., eBec. J's l in 1991 (pnmanly, 5 53 for a propaty tax aaountag 2'

cdjustmeni and $ 23 for tu audit adjustments)H lthejnmany 1, leaOiamournsuk du Compny bepn

+,7 % recombag a nuu>cah ddened agersys 6e Poetion d the i lf g w*. aecausehis sedmook Unk I trgummum met irsided in - in 1990y,ggg9 k. . m [seehaecderIng1900 Odurimanneanddeducaprah V dy taming ier the year 1990 = He Ndes Arupcesi en delsmed an=n ansebed 4 1p nuthon or $3.55 per share. compared to a ks d 58 t h Q Unk t,taceass4 h 194suerdat989 paned,durtothe: f nuthon, or $5 B7 per share, for 1M9. This d6arnce was (E ', s blinwingforessiibe monukgddeC naj t due pnnapaDy to the nmka$ write-oflin August 1989 15embhak13si _ "" V hreemary6nneW j required by Scaranent diinancul A counting sratards t ? jdestjehqtam $ guayseshigsmalsocm)vne h r f 1 M g% (srAS) Na 90, to seduce the recoverable amoutu of the 1 y 199epedin des 4msQstsen?; f;dproperty % %)f CompanytimestmentinSeabrookUnit1,pumanttothe,(.Wpveney(Itteneauhm 1999handeedbrasithe,, M 7'%;MR Seabrook Satlement Agteemme, and to orher pnmsloas ok

tdge$sNuultants aduses4 ? 1 'W thatagreement.Funhennete,emmingsperslwe br }990? E ' jtiw~

astugdueeny %q$. indde $.29 per share as a resuh d recordm6 n the seemd "qgspuntIn ~ tutII6QIs ; y i - : qusrter the Companyt share of the Seabrook Unh 1 museM d gi1% % k,, 'MN, " tial and supphes imentory comcident sich dse wu6 aumM f" 9J 'mercialoperanon inaddition,1990estninywiseUQ; ? Q > k g7 jly % g,y, fM, M* gQ 5Q > y ,,, mj = ' h ;', i,, .+. D 4; if; 'e n. C

e fy

[ /g;

i

, 3; .v y, p -q p p; ?qyg v .w - wA-.wowhMwh b . %sts y 30 \\

i p

mp -

[ '( l tend redempton premrums recorded in the fitu quaner of mdudmg the cost of mmplance wath irw nsmpy smn-1980 pursuant to the DiUCs order to reduce LTs pr> gent emartemenallegtsbten ard trgubtions jeded 1984 cammo by mears of non-cash charges The inflation abwnce of these darges us pnully o!het m im by As a result of mfhton and increud en+ hgher mterest experu on shon-term tenowmp runmental ard regubtory requurnents, the estmuted cat 1 DmJends on pre!ened stock dectend of rqhng the Compne productne apaty taby ,j m 1m tw $ 3 5 mJhon as a resuh of redempnens wuuki sutuantuPy exceed the htstorul cost of such bcdv t es reponed m the f.nantul strenrnts Smcc the cerry np rues for sernce to its custamcrs h.ne ken tused m the ihor ta 10M the Compny's cammp pst on (Le co t of prendmg suth wine and hnt been mideJ a brge xnount of nonwh AIUDC As a result rn xd from *t'ne to tme to tefra mereud aus of wrv. of the knuar)P.1W DIUC rate dea 90n.bepmm4 ice, the Compn > beheves that any h3gher repb ement .bnuary 1. lW AFUDC rebted to % brook Urut I us cms it tray expeneme m the future w dl N recmered dxonnnued mept for mmer amounts rebted to new thiuih the normal regubtory pre constnman Concunendy, the Compny's cammp began to refect a cash terum on its recoverable investment in Seabrmk Urut I that ts bemg phud into rate law, through the increud customer raies alkutd by the DEUC, and a non-cash dderred return on the pomon of the recoverable I mvestment that is exduded fem rate twe dunng the penod when the investment ts bnng phard into rate bar Chtr the wheduled ine year phu tn perud crdmg December 31,1994, cash terums wall improst as the nce. cash dderred return dimmtshes-F Aduntment of wessaaloperanon natus by Seabrook Urut I h.a pim,ded and is expened to f' contmue to prm,de imponant benef.ts to the Company. Among these bene!!ts are cammp from (1) decreased inter- [ est cats resuhmg from the teurement d high<ost debt f w,th funds pim,ded by the salcheback d a poman d L the Compny) imtstment in the umt, (ii) lower fuel cats ) assocuted w,th openann of the umt, piticubrly ifit G connnues to operate at a high avaihbibry faaoe, and Oli) mcreawd wholesale powtr ules contracts that became : effectnt upon comrrertal operatum d sie unit'The Comi y ,, [, f. N pany has commitments, at this timeAr wholaale powet = ^ ' Ul t g M ules of approumately $18.4 n@onin 1992.However, f - "t' ~ P, subsequent to 1992,the Compgshabushipomer senes, t u, commitments amountio $3.3 ,$4.isc4 - 1..

f"pgi i

nullon,54.8 taillion and $4 9 traan teye'es1973p; 4 y _ Lj t (9 1994,1995 and 1W6, respecovely, and she Cauquay ouy, W

(&

ydp j ra le able to market any sigmkant adrhaanalamouse cQ" ' Q gl;f [ O; - <, a 'b wholesale postr for the pe iod 19921996c1 F . ~, " g' . M &$}] 4 w 's p.. g ;,, y AhhoughtheComp$ybebevesdetas 3 a A p CMin 'l- %Q? fmanangoutlookandplansareunlikelytobeadvenely'%j " ) O m " f M q 1 yp d(( l ~[ h / [g' f ; #1,. j-3 Ji N, afIctied by further dettlopmentl With $ $0 the M ingard openton dseatzuokthde 1,ibi Congsmyt. y ' y 'q~tmar,aatuatusar J (" 7 y yWCgg I 4yy t l3~ sensitive to any such 14.u.ts and to masy e6er imi{ l 7 ja ' NlQ Q _ r A' i- ; h M@M @6 +, l ~ g7 .V XO MS x4 l toes,indudmgcondmonsinthesometsandum,ecoE JeEMV " Mg@O N 4 nomic condicians, the lent d the CompeyW== sul ", iE e F EfG m %~%2 r 4 wnggp l cashi w anai w w.od n us.or p - _ Q,. 4;. > sws s ~ g' #q.-;(w g ys Qe + y 2: g.' a, s u. . 3 9*, M,-[#$ [,l,c,.y$sa W$ jg *

2,,

' 9,fi ' ip"N .i% [ ^ "' t ,,l[fi, 3 i . 11 Q *! \\ .lgsQ.~. '"'Q ~ M ;g,(( % .uwme^w "*+s

ao 4

s n p- +;

k

,,-l 4; jSQL D . G.W ~ u :9s l s 3)

s y
'e sv

y 9+ n g: r y Conso5 dated Statement of laceme tw the tw. t urnverc 11 m m ni im 7%wnh tury ps +m anm - s 19th 1998 19W Operethis Reveeses* v3n $s0 96 $wo lit qvmtr.g Eqvre Qcawn 21153:

le w Fxi md ev'n - net 07m puuxJ - net N's 17 N7 25 vs4 Sher

C 115 ID M 105.44I Wmterav 4 D,4 40.4 v.

W 4 t. '7 D recun M 161 M,$26 l$ *,ld T Anm.mun of car"rd nuncar prera 10 415 10.415 10 415 Awan d Mmed Lwl f.cl com A242) 1mome tam 47231 4),m 37m1 4 Gher :am SIAM 50.241 44 IO0 Icul '570 171 M2N3 515.117 4 Opersthighacesse 103.2 @ 98.%) GUW Wher income and (Tedatxans) ADc *anct lot equiry fersh u',cd dunng conewn 1,259 133 38 % 8 ( Drimed murn - sobr,ok Orat i 17,970 21.$0) Other - ret (7%)

18.605-(25.972)

Nenqcrmg ramt um 20.787 19.134 WAW I hl M 260' '(0.347 - $2.904 3 AppEcollesdSFASNo to i -(217,503)

't N! Lwd plant cmts

," ~ )351 4,049 4.129 <a Aarenon d Scabrwk Urut 2 da'kwed return 04AR71 (1.745) , 61.227 Agloblc ruome sses ,7 4 i (152.147) y

lao 2,M4

( Net E6co d5FA5 No 90 i s incense Rasal.dere lunarest therums 144,425 1 -. 161.214 I (5.4 54) d TW i-

$'./

A f* s {(g q$ 4 ,, V ' 90,286 ::,,,94,056 < ' 91,126 mo. Intertsa on kytg tenn debt ,47' , ". i o 3 Other mrerest -h 00 AlLwaar kgbortawed funkuseddurqconstrwfut t* y e [] Q U. ;h f 9A47a 7 < Jc. f l5.440 ' -22A49 4 ?Y &h63t (26,475) ,j [' trame as benebantable e se aamsfarbassa.d bud, i Q; H,S,y D %.. 2.A ,,,,D ; .Ji ' ? (19/ct) 4 . e,, q y m- , E h l<,n h-I. I N.M. 'N W IM _f. M IUIfME d o <ns.

i

- n.s.i.e ci d m e w g#.e w s Cumuhtrve eficct ke yran pror e 1991 damannigciasgrin plupeuremas$nsief Wpy,, % $x' Q o, mn, ~. 4 4 - - a 4

..e. y * ";o;'c.* W' 3[ %

' M h (7),)W) ?, U ~us 4,,n M q W C.+ tncome taxes d 15.559) y c-- causes "a >6u 6 ~7 i([. sa 4 ,a... n - vu a ' ',.e : ( Nd b Sam) d?$ !o 3_ m,y ...ugpse 4 .uv f, ,4-i y P 3,23)]"' emakke +, {3 Diddeeds as Pygderved hast ,s $[- 4..[g% 1.ha k k.8.S.tRT ((*"8' fh nuessee gasul Appeedde to tenussa Stask rarnissa tassi per shase d comunes ese teemo essmasamesme W; j %;33Wf-Amerses Mumbar d emummun 5 ues tdshmueg. WN KM 4,W@M!!n TT e Q w' k,Di,,i q, a % h daessuutus shauss ' ..efn 'd 7WDe ' 6' cu=*= c5= ke fegru m 1Md==== mis daisc hr i t s-.hisis ir ee _me+ m n 3; e, 4 U y[ CushaldeandstestendreEdukatenmestnNrh@h[5W S3th 5"" I I .i. ,A .WM A gy; l u w . ww a wW u, w,y m di m v u, mW a. bnhh v,v*! k; [ k ) -Nh k l f+ I. .d,A m_4-%u., g ~, y .J, t g4 3 ,n. , w? m,,l p% lllf. k. 'I' lm O -- ~- p+g J --g_._, an ~ ; }; k& (ECf ' %j nf 4 e A shR }j,, '. yi f b+ + s.w; yW w m, % < hy mm 4; ., wh, 3 sgg;3 ,%g A;h 3;P l l

- -.. _ - _. - -. - - ~ - _ - 3., a- - - 'y Q >p1 m Cott90Hdated BalattCe Sheet 4 i w *,u miiw.wix l.1h%tefdl M t4$8T Litiuty Plant at OrtstnalCost { 1WI 414 11341.3 2 i &+.310 f in me 3 1 '.44 312.5 9 323.837 trw ascr.uked prmn Isr Jqmn.n Ul4 Vi 12 M i71 V2,4 71 F l S "I Y 257 675 811 Drrran uon m pnpts V4% 7TMO H2 027 %dca fvel runt trWed ren/An am 81 N 1 W N2 1 +02 W9 Net (W) Phat _1317.2N Other Property and investseents 13 9 12.1% 0e21 Cimat Assets Cash a d te:rptary coh memre M,28 16,918 38 707 Auunts recenNe I Cuaarnm.Es abaance k r dakful acwun:s of $3.200.$31mnd 12,130 58 256 57,343 54,1N Other 31312 U.20) 24346 Amued ututy revenues D 200 22.026 24312 1 vel. rnatenah and suppbrs. at omge m.t 12.021 R768 24.7W 4,63) 1,681 3,780 j Prqsvitents Oher current aus 142 121. Toral 164A)9 161,066 : 170.BD I Dehmd Debas thfunded dderred encome tam 4R998 437,606 334.292 [ Defmed income taxes 161,431 177,480 176A21 33.461 tharnort=ed cancelled rnacbr prtyrts

40f00 47,110

. ~. 31.524 g thamortued redernitxe ants

1 10,716,

37,999 J)9AD J 21.50) - Defmed retum c<ahr*k Drat 1 3p41 4 Defmed kullud ants I ' ~* [71 Sales ad ustment trvernes ', 14,514 I 8.211 'i f 4 inw: son, 4.3 m._ aser xA { s >l } 737p ; < 74gy)4 g ancwww Run. gi + w w n, I,)g})g,,,*j sarem m .m $2 ral pns d the p F *W %; Ji '.$27% $ , $2,232,4)$ = ,d apuutager # 4 seassues * :* ' enmusume g SQ ni acamenu ,b u i' h,, M ,,.o pp e

W yyy WL g.

i , ej,. g -, .l [k( N k h-N7R 'A' s ,+, . ; wy.- p pgm,.,, wm, m ,; {# _[ ' 1, *[, bs s + ^e w... m as u;- a wa ^ .r. ,, m. n. .... *y e F** 'J '1 t % ;; pp,_'*A PardwienftfadedDucashstil,19H I9WaldM I.(M ;pr: gy/c' ' I 'O "b' *k '*bW. ' l [4' < c ) ' M ' 'k 5 l_. 'I +. '-. ', M' ' E l'aMr(W p[ N< M ,7.L y -a e. o s

, s,,.

g, 4yaqw n. l . (Tbnsadsaf fouaig, + 2 yin} 'd $$ %w 9 i(, h..j[;g $ 3 7g

7

,}"% p hf y i {p y q( ggg; jgg VG[.jt MidQR g g $% g. , y. DmuniapphbleerepunhaQciemdsuch(; aOM %g R, W + l Ne:hunc(im) j yg gpg fM % gM . x x, s, m. y %ymy...s i w q ~ di'Nh fd Wh7 Yi { m# um~[ah}.- w pu.. DodsetCh6 M W i a;;m -.s.,, ,,,, m .- ; - %. -f p r agag wawa a ueman. u . g gy,g.i " is.1 .. i a .g;p 'f Ccumnon smrk ^ 4 .od m=. -p sy; T j u,j y p g. p uae tg & wp -,,. . a ,7 (s.nnvam m 36 9.; $ M Nd;w{;W. G,7W W SQ gg wit pmer6e me nmer31 u, p.m< y3-Qp,p.~. sp~- yn. y zw u, +n.y, - ., s - w au e,a m., y - 4m a; 4

n v sp~,

e. w, > -n ,; e <w ,? y y.. w(t{} m a c.f g g,,g. .[" ha f ; " q_c y kQy j t R.y e ) m y, ;o u $v,;p w, m, a a)gg,, m .s wnw sw ~,;ep%wnymy4Que m,yayapp. = m 7 g g 4 ;43 g >~ ,n ~ h 1 -~ . - ~

n - w. s n r e, <=u. wmn g .:A'- +,, V' s3 CenteEdeted Belance Sheet wwt. twt. lwo ad ieen Capteensten and Webmies (Tw.na of M m 1 8981 1998 - 1900 Captatio6es cerm, exk equey Comrucuak 1 : ^ :s,: 1 277 % 12nM i Paid in ord at Capal axk exFme 3 M3 J202) t 3 204) Retared umg 1 M 't 105 M M 20

Jl 771 379 812 M2 5A4 htferred exi Ct<

69 700 ?0 WO 1mg term delt &M BW.991 fM M4 Tctal 1.374 W 1,149.505 1RIN hemmat iIdauM== C% pens undet apallraws 95.575 98,183 10e 831 C6er 154 1.SN 950 Total 06.973 M.933 107.781 ~ Camat Ilamm8== Cumnt portxe dbr4terrn delt USC 41M7 = 18M7 kwunts pydde StJ00 66,113 60.077 Notes pyable 11000 15.000 45400 thndends pydile 9f02 9,107 9.243 TR) 18,121 12,592 Taxes acesd Pmes acaued c 12,971 10,917 . 9.419 - 29,302 27.715 'd Interea acaued 31.321, ', 4 . i 2,4 72 " 11015 C%paans undercupualicases 2,174: '11.94) g 12.858 10.817 Cuer scaued tubducs Total 14N4, JV

205,757; 206.545 Beferred Crees

'1 Cumnrrs ennas km construcum ,(- 3 S 64; b : 3.247i '.3.114 g Arumulated delerted investment tax credt:s . 30,957 l S,, J411#12%

1

, 9 21,773 - -sQ Jo yl45:. 9 %, M 8tMog / temdland ludamis P a4plF y-

$1,3F l m ;g T $1,902 a &. in..

Unfundeddekmd umne taxes .c - g 413)?% N. 4kN3 hkid[ J 4 Y , %$,Mj > M~All ^ 332f)6 ) Dr*M thcotDe tRXtS I"' M i ' + tumdpmmsaledun'aphnt, - 1 %g *gg, + a [, C 4.$7y M ' 10.4M A,e 1, '* p +;g u .a 'D7,234;( 4, A$12.449 7 Total 4 ~/ D Y IT2I L \\ = h;' *,,, *n, J / m,600 ? M' Jp n m4eu+. ym Caussduceeds andCe6 ',N$:MNI N;% N I 4%+' M '4 %' " M 4% 4 jQj7;mgWM M : y y.12m s.8,.12.,252d 2ltsla.s.s.aeY f - 1 w ", cgJapuhw e _ < $ W , g .t .%.p,y ,,r

ptt;g; 5 - g, 3 +p44

+ s = q 8 _ f, e < % 4,, 9 ; t s - 9 o pf > + >+ , y' w(y '. 5. ; 'r' * $$7N

Y 'Q t[. 5 )l_; fl f f. y'4 p }I:n

, S &.'? ?!.N i.

?:

$X;f ff q yy "*;-& 7,.,; <-' ',' gw n, ;) a, Q. _; w. .9 s 'G Q.Q, y ~, ,9 3 Q,g}w wp, mg$g;, y 3, 4y, k a s -w. e w.+ .c o y:n. %gg p g + + - C u ;u; n; p;y + ?

y+ya w <-

w: J

n. 5, a

- ~,

v,, w u +, s 4 G D f ;; %m l

PP y,?*q.f/,"g m? %>./w; M W

,., y., ;h { ( ": - ther y 3 'g? \\ 4 - ' ss I

,g S g*: 7Q 'k[b *"l ( ' j g, {

,u .. j, r:c-p m ng4 , + Ng &f?;(g?'jh,,}O Ime '{ ' _ ? ], . j ?T. L a -ih b.*) Z ach

QQQ,up' ke' d /, WWlq,.

a . ', $1/dDYf: m s gggg@ p Ag And p g, q;%,g;-; r./, _ e ( >@g.D3pf, ; > mm egggg a J ,0 ., ~ 3 ~f g l mwv.w nw Q w q ygw % w%Q 9 ;5,3rg + a%w.;)y;. ", e[,t n; ',w%N v f (g?q#. J ggNy y > 7wMd4 W%g 6

b. 4g py;m

% x;. ,n I " t9: yy gggg a y,n ( xp ym. m 2"/ th t .M., 76 D : 4 [, fitN, m

, i.% p l.

..h

3?;,

l-l,.:; ,}}Q fNy f

y ' f ff

_ f t,* fff .s v 3t

_____.__.._______.__m,___. I l 1 { consolidated statement of cash Flows i 4 1 u untu4x,nwu m wr.ew l l i h,s r tw w 1 1981 1990 1909 Cash Flows From Opersths ActMtles Net bicoes (toes) i 1 _s4 044

i 3 t'0 i

D ER.' ta %'hl t Ifi lei nf IJ TI sad, [r.%Md h. j fr3*.'T $ A.13E4*i J

ill; v +7' Deprecx>x arJ amenc.nn

-+- 12 m +iS4- %ened nume um Nrrtej ; rec.t unrebs et 'N '2 "e vry % < ece-a - vt s< D 4-152 147 bhxi prudeme r.vs 21217 CH:ac eb fa,un prk r e 141 o! a.: awn M a L4 pqm. nes - ret ,A.3.4MC U fgBO a sed dZng lif.fTJi'Un

4 "

13 4431 P ' 4+4 ! Nernd re.m - WM Urut i .I'/ (21.M 'sa6cs 3Jger.ent revenue '*7h 18 2111 Chr ges t brums recrwaNe A ClO (1.tN )' Ob e TseL :recruS and suppirs ! 7,'4 7 (l5.0$91 < 4 4^ h l Axxnts pe 14.%3) 6.l M 17 ):4 Cect auts and h5krs ILLA 8I47 2 V: Tra! Adytmen's 4 272 22.247 146t=il Net Ceh Prended h Opnnng Aanws ]g 76 295 '. 253 p Cash Rows frime Financhg Acthelee 9abrmk dr.htrtai prwreds 250.000 i Canmon stak 1,319 tag term dett 53JX10 M.0tU 2$ftU Netes papWe Q.000) (30DX') 45,000 l Secunnes returd and redretyd, trxiadeg pre:raums q [ l Prtiened stak (7,LW) 0 03) 07A10) g tag-term des (4 7.6'0) G33.977) (3,667) F.xpenses ofissues 3.165 (3.752) (1.440) } g Lc u chlganons 0.106) (8,991) (3h40) s i (Werds hefened stak (4.612) = (4.887) (9,597)' s Common stak = 0045) - 02,219) 02.219)- .{ p m i uma fW rw-Not Cash Prodded by (seed hal Hnesolug Assumes (40.310) 04.126) (17._363) - $~ , o me canew h,a 71.512 42.169 55h90 I e aWrd*. Net Coh Fim from Operanng and Financing Acmns, ^ ikf nem =re - Cmh Insested in Plant. indudmg nudcar fuel (63.157): (6G18) (77441) I,7[ Cash sad Temporary Cash N [] a.,e a,mt se1csar,eiorisepenoa ~ a.355 . ai.s49)- ai.isi) ,u

1. 91.

m e7 ,9.91..o Ba:ance at md of period .$ 25.273 $ 16.918 5 38.767 > .g . - pomg I , umem s wm. ^ f G- ~ g N4ames and Nna Cod peId W the parted $dC ,., f $ 79,519. ' $ 50.471 a jj1 caahred rm.a-imenst(netof amountcapitah:ed) $ 71.641j a w men,nm iI 7.9II [_' I 16.13I, - $ 21.Ilb, 7 y*,. e s== menu re ireusse ammuuse i vrai sem d it' Incorne tales - ammmaus a . sammmme > 4 ammmum, , E [ ',)- s +

l l.,: f. [

1, .n ' f.. g, i f n 33,, y +t .x ,g. .y A 1 .[, (W .t

[

.44 t + 1,e. 4 m \\e

.t x

44 %? J. v ..;+'-

pf) x...

y ")..; r- ^' ~.,; [ g;[ 9 y g 4 E$ lt e

,I [ h., mg m, on ,.u )), 4 Accounting Records Agreement. In 1989 the Compmy aho rtterded an sh The acemnnng records ate mainumed in txmal recasn une off d appetuumately $4 6 milla accorthnce mth the urubrm systems d accounts pre. ( $1 e mdhon. net d rtbred income taxes) to remgwe ik scnbed by the Federal Energy Regulatory Comnussen probable dulkmace of a retum on addnwl cre.ts ase iTERO ard the Connectnt Depanment of Pulk t't try mted mth Seabnek Unn 2 br whxh renwery has twt }rt l Contml(DPUG b en appraed Ser Nac (1),"Unamortued CanceDed sm e,- Principles of Corisolidation Pluwh Man The conclwbted fuuncubutements in order to e2w the imp,xt m rues 6: my rtwir f om the addam to rate base d the cost of incbde th accounts of the Company and its wholl)- r ened subsdancs. Bndgepon Deanc Comp.my MO, nupt new beihnes, such addens rnay be added to rate Umted Resounts Inc, Umred Energy intematonal, Inc. taw by regub! city authmte gradually na a phase in plan and Reserch Center. Inc. Intercompany accounts and The).nu'v 24. lW densa d the DPUC tmpkmennng a transacnons hm been ehmmated m comobdatxn the Seabrmk Set'detnent Agreement irxiudes a phaw rn phn for reccwery of the Company's investrrent in %bnek UtMy Mant l' rut I that complws with SFAS No 92 SFAS No 02 Reg-The cost d additros to unbry phnt ard ulated Enterpnses - Acmuntmg h the in plans", the cost of renewals and betterments are capitalued Cu:t estabbshes cnma for a phase in plan ard serptrts, among corusts of bhyr, nutenals, semces and censin inducct other thing, that cats defened ke future r town under a mnstrucuan costs. mdudmg an allowance for furds used ' phaw-in phn can be capitalced h fmancial trporung + l dunng construenon (AFUDQ The cost dcurrcnt repur5 purposes only if the rate regulators alkw rectnery of these + l and rumor repbcements is charged to apprnpnate operat-defemd cmo within a un par period d tune, and that the 4 ing expense accounts The ongmal cost of utihty phnt percemage increase in rates scheduled unda the plan can A rented or otherwise aspud of nd the cmt of remcr<al, be no gresta than the prrtege increase in rates sdwd-A less sah age, are charged to the actumubred provtsinn br uled underthe pha km eachpreceding g depreciacon. insciardance W.a the.bnuary 24,lm0 A rate decison d the DFUC; APUDC teinted to the Compel i Abendeamenkand Di*aliseenoesof PlantCash ; f b nyttowsenentinSeabrookUnit1atthatdaeewasdecon-4 in 1968,the Company adopted $ ate-j " anued and the comperr{.pn to troord a dderred return ment of Fmancul Acmunnng Standards (5FAS) Na 90,! u, J on the portert d the retomable invearnent in the unit ; k

Frguhted Enterpnses - Accounang for Akvinamrate - % 3at b presendy eaciuded from tale bane due to the phasing

' nao tue 'tuse d the Company's trn=nmt in the unit over :

iQ, ard Dtsallowances of Phnt Ccsts*, and elected to itstsee W: o i

pnor pencds 5FAS Na 90 requires that, br ceanpimed 4. a s a 6ee-)est pened, efitaneJanusry 1,19900,(# *, y Na p! ant f,chnec,all o s disallowed br rane enhlsspur-Tadw J ' + 51 /'? H g,For 1991 and 1990,'she Campany esced v 4% Mdemdusenu,nimedtoMUnkidj y@ poses must be remgneed as lossesagatradecesssasesy q ys W as the asa!!owance becomes pmbebic and g @ fj p @S 6andp21 % W Q { l ably esunuted.5FAS Na 90 aho requem j j KMhQQ d W4d[RessasseamminanW"yfM47$ recorded forany disallowance of the c,y4f4 Mb abandmed ehnt hcary.swee aw / "- '~ v - tH? return on investment, regartless d the inet 'Mpp M 1 > t. j g " N' 4 N k*dF P W TI M M M ~ have prmided for recmtry d the fuH invesnued. p$sWphu to be recceded for the dtsallowarn da mura is musuelD f O'I8'"W"""8"' N by the dderence beraren the recoverable insammentind dM,b bN Mja A -i-d .w$3bs@, mu.c.,,n.eewlh' fe A N Y d N M. b f h d ayW w g r osa'ed *5 iamme-assy Tm L ln 1989,seComM i ispamese MM matdy $212.9 milhon dwriteds d@tmusisias panfm dIIsestsqpset g .b yyy : }*' am .&,M manWM M extensens, to at least,)nuary 1,1990, afilwegamel[Mh 4 renect ee wete down d the sabian usk ummuse wd sudeWu[ M gQ%p$ commercal operation dme d Sesbscok Unidist01sr$ l. ' from the statutory

cap
to thiallowedseessendisamousl WQeidsensist J

d$640mi!bm asproddedir the$embsesitHassidMW4WWsWW&MMW? . f 9 hRh%fw$% w$m&w D+NW I u$ %w, !y$ k S d@$w@ m + ae %uy ?MMW W &g n A%m&WCMMNdgG ww ax m 't 3k

7 ~gg y. e. l

f.,

\\ 4 Pnor to 1987,the Company accounted hacesne Tanes for the pen d the alkwance appheable w bomstd in accadane wh 5FAS No %, *beunt-funds on a net d tax b br au cordtrucuen preccts ing br income Tues', stuch was adoped in the fus kcause interest dwges amute i uh construawn pnt quaner d 19% the Company has ponded delened uses j eca wr. pnsed cunently for ux purpows ILmtser. kr aU temporary twk-us dJfrrencn usmg the tabary cfhtnc) naan 1.1987, the Tu lieform Act d 19% meth! The habary urthod requan that driened tax bal-requ: red the cap:uh:,n for tat purpwes of mterest ances be adjusted to refect enacted future tu rates that are d charges assocuted wnh comtructen progets, enrpt for anucpted w be m eflea when the temporary ddlerencn d propcts a h as Scabark Urut 1 that u cir begun pnet to rnerv in accordance wuh generally accepted accountmg March 1.19% in 109 and for the f.rst in e months of p maples br regubted niustnes. the Company has esub-lW0. ARTC for Seabrcok Urut I was computed on a net-hshed asets ard habbnes that refht annapated future d.ux tmis, and ARTC br aD other prents m com-ratemakmg eihis d deferwd tax provtsons ansmg from I puted on a bebre-us hua Comadent with the ux the implenrnuten d 5FAS Na 96 m-sern.c date br % brook Urut 1 of June 1.1990, the AR*1Y rate bt,11 ebgNe pbnt additions has b com-The Canpany haulcaed m take me puted on a bebre-tu b mnu tu acMTC) appbcaNe w bg*mummruam projects on a progress-d-constnxion basis which has AR'DC rates tn eflect dunng 19891991 accounted br the major pomon dthe ITC generated for are shcmm bekw accounting purpo nes, the Canpany practicrs full normah-

2 tion for all ITC rehted to stratrable phnt imtstrrents adowTaxtes WTax he*

cxcept for the ITC rthted to the recetrable pbot imts:- 1989 1D0% 95% ment in Seabrook Unit 1.11C rehted to nmrecmtrsble 1990 11.75't, 80% plant investments, i c. dmse investments written otT in i 1991 10 88 % accordance wah the prwisions d $FAS No. 90. utre taken I into trcome when the tehted SFAS Na 90 write-ofh were gg, recorded-Provisens for derrecianon on utaty AmersedIRIEty Rosesses pbnt for book purpcnes, e.xclud.ng costs associated with t the 1064 recomtrson of BEC's pbnt to a dual-fired capa-The esrlmsiedmnwnt duthey rotmes 4 bary, are computed on a snaight ime hists, usmg esti-Cess rehted expenes and applicable ones) for unit ren-mated service hves determ:rrd by irdeperrient engmeers-dered but not billed k accnsed at theini of each account. One half years deprec aton is taken in the year of ediman - ingper% ~. a

, J ;c 4

( and dgosmon of unhty plant, except in the case d rnajar

/ > .

2 i opersang um:s on which deprectanon commences in the. }talesA$mpuses(Neusemen y j ~ E L - L TheCoimpsey)1990tesedecisiongtented rrenth they are pbced in seme and ceases in the month 4 by the DFOC a8een die Company to abst rewoucslot they are remmtd from semce. During the)tsrs 1985s 1089.depreciatimassociatedwithBECWMs. ; W devletionMyerscabedihmies)fromthehalsmett,. p costs was computed on an annuity tesis over the origlant T jhournleslevebhpsaphidtramminciebhi hf

g F revenues me acousd h en yest k whkh the densuon

g4AM ten-year penod that this phnt was beinghoudti&g 4 ',f occuned eut hEndisisuonans is tbe j

Canpany by BEC. Commencingjanwty i,1990,dm M Q ,mg pTy recomtrsimcostsarebemadepnew=dessumpaine? ? - ? {: M@g(h43C. f

hisa att a period endingJuly 2000.The op amusi ' 'W ;.

$ Q; Fy1 s, fyryy2; pmvisons for deprecadon for the years 19ee,1990 erik w', .., N mW1hkdesqmnpi6emmuntin'the'CseMW% 1901 were equivalent to apprtnama'ely 4.31% 3m and M osocinDminekennisseuerCongandstatvunme,a Y/Wh 110% respt:vuy, of the original cost of depechMe %' d, nudent pesaduggungssyindi49e Qsepsmy has s lMSK$ i KNQ[g property, as restated for the effect of SFA5 No. 90. The l 9%%sendt ~ husis

,r.

W W T g Q.b w aggregate prwtson for 1989 indude= a ore dme Inaeus( J 3WFW Q ., Meg $4 M F C y d y @g E g$ of $10 2milhanmMillstrxuunitNo.3deprechaksn W f Q f (j PdiMMm. that M g charEcsasprescnbedina1999DPUCorder.ThiseemlipSfc ~ K ' i ~ reduaim measure was initiated in order to begr the Comy% the hastgmatbeinesand a @h.p %g h pYMk pany's return on Common Stock squity lot raneimaldag W 1 @l. MGyg purposes without tmpring remues or csshh he t cg, Note (B)," Rate-relatedReguhtoeyProceedmpQ yM M domhe %Ngf 4 7. e g(' ( n Cdedsines$, ]%g + m .,,i c. m 4 k$w[ ',' w w( M uf% s. Q Im emp x,, e w, u n s,g N M b M' M kh

M' c

AQgyg ~,Y.,; g 7; :R L x %w.gmg we.ag 4 ,4 m#, n

_4gwe 74 .w. ,ct 4 l Nesserth and t ' ;-M Cests Pnsposty Tases L Researth ard dewkynent cts indud. E5cctnthauary 1,1991 the Correny U tr.g enwrmmenul studo, are capuleed 4 related to spe. changed in methods d accounung kw pqerty taxes m ofs com:ruccon pqects ud deprecwed cnt the ines d that mch tam are accrued mcothly dunng the fncal 7 the related awen CWr research and devekpment costs Uml d the applable tanng authonty Pnts to #nuary are charged to expertse as mcuned 1,1991, the Company accrued ptyny taxes dunng a twtht month pend commerang mth the aussnent daic becd upm the estmuted nlues d prciernes as d tre avessment date. See Note (Mh Change m Methcd d 'x Accountmg lar Pnyny lues * ,u I (A) CapRalizathwe eddamens iteral tenedig 100pW WW IMrel 4 1991 1998) 1999 Common Stock Equay Cmnman sak, to pr value. 4 December 31(a) 13.932J48 1279 340 13,867,746' $277,968 13M7,748 $277.966 + Shares authon:cd at Decerrhr 31; 1969 17,500 000 a iW0 30M.000 Padan optal 146 0,204) 4 Captalsock expense 0.lt@ ,0.202)- + 105,046 87.820 teamed ennungs (b) '125.448 - o: M '379,812' M2,5M j Tetalcomnun sak equay ~ 401.771 ) Preiened and Prefuerre Stock (c) a3 Cumuhmt preferred sak, $100 pr value, shans +% >, i *

J

~<0

l'

+. Oc,. o' uhon:ed at Danter 31,

s~

v v. ,e 10l491350M

+

Nr

, i - _' " _ Y '. ~+ + c 1- ,.,,s 4 + our$- 4 IWO I)47 M ~ f ..y + n 4-4 s.jjs J (I po ~l P t \\~ 1991 IJ10325 J L p 4 M,,.j:h M s ,1 yV t.1 A$4h 4 M "'d *j'> Q, ' ? V,, 7 ' " Pitfened sxk izuer + dh% MIMO j[$h@%.,$@Q[/.. ' %,. 30,000 ? y' ZQH 90,425. A tWG4ME <s 4 35% 5cnes A 11 ) f* '[ )c75 @ rgy ,-Q 4 72% Senes B WWWlw gQ r.m m m ano w. y g un[ eeuser geexf utsgeMy4pc 475.aeog34 &g 4 m senest a Sw seneso e125Ae0 6 rwiM 51SDAOBi N i@drWIIMmlN; y& +@w, MAODN #i .$ 4 7 25cnes E N :r m ? y n /@ F 54f M.a.94,M E e "55484 ; m") M y J 4 N.

9 9 W

7 m seno F '55K:.a[94G a vs ~. ^ 05409 347.646 d 4 f7djGg%$1NJ4pausQ*QM A ahp-fenedmk.$25prvalM' ^

x[p/@$$4.' f ; W*MM(p f :

authon=ed at December 31, b gg%6 S:h$C 3%@[%,;P ASQ ]($T 1989 2,400m +12 : O 3 %yasfW:M ' 1990 2.400,000 1 /,-i y ] j y-y ggffg,((A y g 4 m a q w.s y g. m,w g : g47j iwi 2,400 m . j 3py 1, y a NgjgM M 4 gp t,, -is. m K rj Piriened sock hisuer Md d2M nde, a mpt w w/NM400AGFQ M p % ngg +fi; gw 880% 1976 Series 'Q 9 @me yk. m ' u i & J'- M6 ' s uhnn:cdatDecember31 1 '.,' c*e,,. T n ' WF-n w 4W ; -e 4 A 'y' e hqf 1 1909 5.000.000 ag -a +

*MMQ iyt, a.

19% SMM - IMI 5.000,000 - ' ~ ,(* ~~ ~ MM 6% ,M [ ** ( '

Mr p.,[. ;c 3t

._,u . + n ~ [1dg'!f!KC afKk M ' ,_, ) ~ N w w i e ,4 .-f -r

- jy y p l %, A',g a.

jy; 2 y: ~~ Q Q ,k. gg g 9 g g "i -d J 3i

\\ &, a +_ryp esn w 9, 0 ' f= y Asummut Ammust Assamut Ameest Ammust Amanad 1980W 1000%) 100rtl ItIWW leerti 1000W .,,. ist-tsee. asse tmg-term Ntt (d) Wher lag trm Ntt lag term debentures PollutxMatmIRrwnue he 4 t5k IN0 h.duejuly 15. len tw4 % due c 19 # 5 - $ 15 M Octokt l,2009 +0 @ $ 40 000 1 40 000 [ 4% !W1 Smes daeJuly 15, 14 % )w4 h 8,due IW1 10 000 10 M twember 1,2000 M *@ 28.C 28W e 10 W IW5 % duc O m kr 9% 10M6 % due i 1, lW5 t< W (M00 150 M June 1,2016 7W 7M 7M i 5 %.IW6 h.dueAurwt G% 1W7 h.due i .l 15.19 % ~ 15 M' 15 000 15 M Ju!y1.2012 2S M 25 000 25E00 = 6 K 1 W7 W, dueJ.mc 15. 10%.1987 Senes,due 1907 223r 22 M 22,500 Nwmber 1,2012 +3 W 4D00 43.500 7% 19W Smts,duc Jam.ary 15, 8k 1W9 h A.due 19W 15 M 15.N0 15D00 thetrhs t 2014 25 M 25E00 15D00 I 10%.20N5enes ducJune Sobd Waste thgnal

15. 2N0 18.181 30M Revenue Ed 7%.2M %.duc Ocober Adjustat4e rate (cur-1,2002 25 000 25,000 1$ 000 rendy 4 85%)

Sh% 2003 h, due Decre.ber 19905mes A,due 1 15,2001 Mp00 30 000 M,000 Sepcmber 1,2015 X.000 %.000 12% 2017 b.due Augus 1. Meilr.im Tem Ncaer 2017 2TB 2.0 78 100 000 7.62% 19915eries A,due Smalde%res September 12,1994 M.ON 8% matured sma3y as e 720% IMI Smes BAe I [ $1.e67pnnapel amount on November 1,1994 13.000 Ncvemte* 15,1991, wt:h 6 a2% 19915eriesC,due h [_ the rerunng $10.000 w.r2.1994 10.000 redeemed on November 15. lag-termterlilcans ' r 1991. 11,666 13,333 129%($12,500),and 4 P 11% matwed sma3ya u 131% ($20,000);. Nmmkr 15,1990.wnh emurmgs m" $2 000pincelamount on $7.500in 1992. -1 ~ ~ i-the remammg $1a olX) 115,000in 1993. V. o 1s. . and $10,0&J In' - 4f redeemed on Extrler 15 , 20,000 ; i994., .y A32,500 ;_ j 40,000 ,40,00f w, 1990 l 1 177,178)' 219,025[441A33g 3Oliagenundade; q ,i , q _\\,} r 5subewliUnit 1: 4 j,g f]f First Mxpge knis - Bndgepoit g%g - %g& ~ $ }.[M ' ' ' ] h@..,i W.7

_.22@

22 W ~ " i, '1 8 f Eleanc Company o .m ^ u,'nv. 9 +4% Smes B,rnaturmg seri-sm a,enw4w n m.,m s10n w n. I.bh,gLlesuseasidesAs@M 7p d - %{ [^ },t Xig f%fe 'A ? 4 V

3Y amount on Febniary 15 ki

+ _f . f1, ' g Jesurknysunusase each dthe wm 1995:o 1999- = $4m 54,000 '54,000 -

. u Desmeer3Tt;tIIR.J h ~ i n! Q.

+ r +7h 6,p 10 32% Senes C,manatngsm. f,,; }19004IM$p WOOD)3yV6*)r > (1.Ep g = h [ m uary .sa u,ms, 580,0005 $- ~IBYMNSDIN#hdd"7N% MascausatisW EROUA TWO N 1995. _.180,000 J 180000 qs, N MhM Dd${ 4'gy p u s uiness e m m h % rww .w w,, :+ > y m Qfs m q,, 17w;p Q,,,.n

e;r p e.

y e.p: g

-s

+ 8 in - x -Am h'Wj?N,I\\W*k %,[ _" ' k Q-y, y' ,,ip j % &, _ y0N r S >\\ , -.y f,L _.. y.f 7 _} Q Q _ Q ) AI M t} ,. s Q_Q, \\ W t s s [ m.. w,.,2 '[. n -_-y '4 y> :y y~ 5m p ; tw. 44 w fm..y .m .e t, ~ m ~ y[ e w .,mW58 o jyw l 39 l

pyyg 7 +~. s 4 ~ y Y I F - meok Gxnpany and a the arrounts that can be exp sded to A At the 1790 Annc.al Meetmg.shamaw purdure or rerkem hrs d cunmon sixk. %e akw en amrom! an increw m the Carpnyi audwrced ture utdet whh the Qvnpand uednun-Term h y t comnm mk, no pr wlue, trwn 17.5MM sharn to (MINS) ard Notes et sued aso ;4xes brmtatbns m de ~ 30MM shcrn There wrie r.o share dcomnun ok pynrnt et cadi dmdctd< c n axnmon stak ard on the ismed m 1089 er 1WO As detMed bcks there were puraw or mkmpoon of comrnon sta k 1Ades de trut f 44 NO h d common su k mued in 1W l pursuant to trstrunt pimwn d these rdenturn, retu cJ nmtnp si m the amouru d $c71 rmhin were free f nwn such 1 nuta-a srxk opnon pbn tons at IVcember 31,1941 Comnen stxk. na pr value author ced at Dttember 31. lWl. tnduded w.000 shares revn J kl Prdamd ami Precace San

kw the Compn)) Emple>re Stak OwTrrship Plan IN pr value d emh of desc mues was 4.500 There sue no addn.ns to ESOP m 1080.1WO uedm1 to the rppiopnate mk amsnt ud expnues y

or IW 1, unce matne tu credits alkwaNe kir ESOP rrhted to the r tssucs sin charged to captal u k nyrx en.kd at December 31,1H7 in 1990, de Ccerp.w purthud ud q i4 W Compny purthud on the open canceDed 3.000 shares of its $100 par value 4 C41 i r- .turket, on bchalf of sharchdden priaptmg in the Dn> letted Sock, Scrus C, at a discount, resulung in a nord derd Retnva.4nt Plan,156M3 shms m 1989,141,486 taxable addatun to smuren equay d approxunately f shats m 1N0 and 148362 shares m 1991. $ 148,000. In IM1, the Carreny purdecd ard cancelled shans d ks $100 pt value heferred Stock, at a demmt. S in lW0.the Companyilketd d Duec. resulung in a nonaauble additice to asnrnon equity d i ton ard the shartownen apprmed a sa k opon plan for appmhy $3,304M 54 punk consised d 3 of ohenandkeyempk resof the Compny &planpro-udes for the swsidmg d opoons to purdu up to 9.575$, ares of 4.35% heferred Stock,Setri A - 750.000 sharer of the Company % com non stock mtr 7,320 shases d 4.72% heletted 5tnck, Series B 4 pemh of from one to ten ytan Idlaremg the dates sten. n ,39,900 ; sharcaul4.64%PrdertedSock,SerksC 7[* L 13)D00,, shnes, d 5%% helerted 5tock, Serks D the opoons are granted. On Jure 5,1991, the DNC e, approved the issuana of $r,000 hares of stock punraant - ,1' yJ. hseneuendnaptian requhn - f to this plan W exactse price of each opoon cannot be ,j less than the market nl/c d the common stock a the, $ [ pdam!mocW%atDecember 31,1991. _f . g s,,,,,d;, g, g g,,,p,d,,., 7 g dmdthegmatcensmpurdmmyshmsd - common stxk at an exerase prkr d $30.7! per sharco b 27 analW ad hquMMo@ mhares d au/ 8 7,000 shares d common stxk at an exercne pnce d $28.31 ; " %l namined hdused sbanholdens ase not asetled to, Md n i per share ard 3,000 shares of common stock at an enesche 9 J. gggg % g 4 g g gg( j pnce @ l 1875 per share have been granted by the head l}y d ggg 4 p, g g,,,y % 4 d Duecton and remam outtandmg at December 31,19HM(hessWWM pedundidumboW Opruns to purchase 44,600 shares daanmon.eech assy y g,,g*d Desm W al p e exeraseprud130.75 streexerttaldytty s ~ $ q@an@rmade# yJh' a y y v-wn e +. In aihtbn.cctra Jg . y j hyf(#hdy.MMyhs gifQ* 9* ,< g ' ~ y1 $QEgg$^ 'd uansaan M bi M cam shares d the company's common stock,'handp%q @ the dn dend and market pubnnance of the eq ggQe%f stock compand to a peer group of electrk utibnes asure !$$ but yearperedmdmgDecember31.1992,undsihsRD. ' m= thelumi!; N Compny)imgaam mctative regram. The lueuses aN M ai ischi'!gsdpehsesth D( gr @ @ M k g $g g shares d stod.punuam to this pmgram recehad Dept $ jQ o -wgq d 9 apprm31 ceirr $,1991.The toni number d shausd @M N d $Ap i' common stock that may be carned toda thi ~ S intums prograra h hmited to 8,883. No shen (. M ed M warded unca this pn,am m date. This pg,iss ' w' ] f_. y asnfDecembe 31,1991A n 'fg g M g

g g*

'n Compa@ debentures att is50td PLACE 5 htOkNially payment of cash dmdetds on ibe common inoc(d duig y ~O ,', - pq, ggp g.ggg y & y~. y / ; g g wkQy nQ x;

'~Q+

L e y, ( m% p g a s aJ bp u;gwww wt w h-4mg a o,- ww 40

,y; -w i4: Uj 6e Cornpny wued ard sold $13 mevrt pnnap! The ret pnxrnh wrre med to redeen., on han 8. lg at.nmt d ti rk-war MIN at an intemt rate of 7 20% 1991, an of the Compr.y's outstandmg Sh% Detenturn, } W net pno als wetr usai ta repay $1IMM pnnapi due Atgust 15.19%,61t Debenturn,dueJune 15.1M7 f amount of 8%% 5eral Delconsynich nu trrd on 7% Debentures.duejanuan 15.1999 ard 7%% Deten. g; Ncnemnet J 5,1991, ni to reucem. on Nmtmber 15. tures. due Cuaner 1. 2002, in an tryrer.te pnnap! 5, Wl. all el the outsurdmg $ 10 mda prme pl amount arrount at $77 5 tmlhori,'opether oth an agrrpte call of th 84% 5eral rNttnturn.due ta mature vnaDyan premium d $618 000 ard to redeem apprenmatelv nr. NySr 15.1902 through 1997, mdudtng a call pre-thads d the outstarding $ 30 rmlhon pnrapl arnount of mm of ? 150M On fWembt t 11991, the Compny the Compny's N L Debentures, due thr nber 1% AY3, uued and vid $10 ttJ1er, pnnapal amout.t el three9 ar mJuirq s callprenuum Mappronmatelv $475M Ihr t MlM at an mte cr.%te d 6 f% Rue n t prxceds vrie remunmg outstandtng pnnapi amount d the %% used to repay Jon term heavu;s Ddentures vis aho rrdermed on Frbruuy K 1%, ={ together wnh a cad prunium of approximat-h 121 ' AM Onbnuary 5,1992,the Comp.nY mth hmds f:om shon term bank bormwtngs Sued ar6cid $50 muen pnnapt mnt of threegrar 6 Ot kes at a discou t. for nr. eficw eterat rate of MatunteardnurGate /redemptorw d; 3 07% aC 550 roon pnnarah.noum d fac->rar 7M repaynrnts ard annual interest experte on extstmg lent N xes at a drxwo, ky an dese in: crest rate of 7 06% tenn debt are set fwth belu a '.gggy jgg3 ' M itto 1995. 1956 y e @0's) Iqyrm debt (begmnsgdync@2) $11 E 8 $903,078 $828,078 $70.078 $514.673 IN Me d Nmes 100m) a \\ Les l 31,000 119,600 i. Maruntrs Mardatory nJemptaxWrtpyrrens 7.90 75.000 70,030, 70300 12.770 Opuoi.al RedempxtW1) 107,500 - = e lorg term debt tend d per:o@2) $W 078 $828.078 $705.078 1514.678 $501.9M usumum ammans summmme ammmmes umamma Artnua} ifuertSt asECated #1th eXbtP4 outhfandtng ^ 'l 77A92 - ' $ 69,532 $ 54,726 $ 47.790 debti2X3) $ 87,027 ,,.[, Ann @ amon= anon d em expense and npur-e g chaw pren.mmt,asammNr.h examng dett $9,535

$7,418

, $5,721,.~ $3.657 . $2.354 _ l w d) u t$ M p.auns q_ j+<

0) Doo m mdude $30 nu!!on dtsa exemp a$mble ruc 4tidWm Depani Brenut kah,1990 Sancs A,d$e Sqambee 1,2015,cim6ed p' !

u the Oxngny) books as a mnent habilsy (unsat ante far Srpennbec 1991 to Mani l952 h 785% n. y. m (3) Does not ndude imcrest on any new Enandngs that sesy he aquind so fund matuttes.wdampeen ne sisu sJandens in anypoen year. The r y ' '. ;J l 5$, g Compny ex;w.s axne new Gnanans,tooccwp } g 7-9 N W

r e.

. '. # +4,5 %w ,<f .e ocr. l W Wa ,, +,. [h y' s q9 s? 2-W , dbKI och to N SM l0 lb, told M UtsillBWI the, -,, g $y - g ,. +Companytkneellungfiyandthesdairhid L g?& - On Febnary 22,1989, the DPUCismR ermap te&unos normajhst d Pressedhus .m uunuesc[f MM j~ H Rg a deas,on m a proceedmg that it commenced on Ociober - W4 'M# KEN g ; X' N 1 ??7 11,1988 to bvestipte the ope. tonal and 6nancmt smaus ' i 'Mi@E fp_ of the Company. The 6, cision ordned the Comparty iod 7 N WWN

3 N

tiduce its 1989 retum cn equity for esse makms yearposes ~ M77@ Er d MN N N2'mummm Q ggg @ j to 164%, the levd authart:cd in hs t'nen snog twent noe i nu emb. 9 Mand $16,Wy,g @' me in 1964. kconhnpy,in 196, the Computywooie ON h a total d $ 14.8 :m' hon. cornisting dim!sepedne ime gg $211sgents Ipe, $468thup Mhets asJdy6,Hg gg g

""'"M NhtM%g _

m' msamountmgtot45mba,mtdreissedhumane 47 m N'8"""@ ines, and $102 mluice daddmani deotectanon ceeM % s t:iatedetwoneunnloswa.eeoeucmed:M "!"(e"se"p*sdagden -onggammemm h*'h"" "*"*"1 ve %gmympwg e y,,y% 9g7 e w; e& g. g a,- %:y 4 .g i m,. g. se , a ~ ag 79 u ';.s 9 g y, _ g gg:s> m : + m MD}i w.u.y

p, e a g' ~..

. s+ p yga y 3 .,y y ay j , g; f + v +y s w -Q q,,. Jh* yf fygg t v4 A, 1l

g t ~,;- \\ , ;,, f 4

I\\-

e sel, the Conneacut Artomey Gerral aM the Prtwcutorial pricd coinsamt svh SFAS No 92 cnte.1a, for rate deq;n a Dmson d the DPUO. whxh the DIUC approved on changes er encourage energy conxmcim, ard for a saks A,qust 23,1989 adpstrxtu provision $PA) des 2gned to cottipenute for devutwns imm ferecast uks bth, nthin pre. abed lun. W bbmok 5ctdement Agrectrent, m us. aM subyct to PrUC apptwal The denson pemuts additen to determmmg the rate trea ment of the Compa. the Company to reta.n the benefus d wholeuk power np 17% emer4ap m the bbrxk prc;tet, a!so sett cd ules expmv redacteas. property uks ud imprmed nuny pendmg bbrmk-re,tated teues. mdudmg ttnnr> nudear una gtformance, above presmbed brh, and ton of the MUCs prudexe auda d the phnmng ard allon the Compny to capiuh:e cortsemtun prercts corsructua d Seattxk t.wts 1 and 2.the Compxrvs ihese upitalced conservatun investncnts (aggrepeng then.perdmg appbcation to merete its rates by approu apprenmatcht 530 mdien owr the 1990-1992 perud net d matdy 9 3kn lW by phasing $a32 mdien cf its mvest-amortua eni h,nt bctn aikmed to carn a premrum retum ment m Scabrmk 8.' tut I mto rate hise mer bur )ran, the d up to A ever the Companys rtghted cu.t of capital 5 Connect a t sutatory tuues rebmt to an apptcprute phasc4n penod for 5cabmok L%t 1, the Companis hmns The SPAof the rate decmon alkm the r;rss generatmg capaaty, and the exdusion from rates d Company to increase base revmues up to an addamnal

r. venue equd to seabrook Drut i CWIP revenues cd-1 % in 1990, 94% trt 1991 ard 94% m 1992 sicmam

[/ nndby ACcmpanyafter1983 Ibsagreementalso ules beb are not achieved. h sales beb wrre not rewhtd Dnr arram a e:id tansues svh mpea to acheved in 19W ard 1991 ard are tmhkdy to be schotd. ? Scabrook Umt I and termmated xvrel DPtr direcmts m m 1992 krefore,in accord.twrich the STA, the Com-1. ceher practrdmgs and all d the bmuus gcx%gh the pny has recentd DNC apprm! to bal e cusemers in : Cortnecucut Supnar Ccurt among the pmes ar.3 the 1992 approxtmatdy $148 ndim (equh dent to a 2.44% DPUC. It saputated that the Compny would reccht base base rate increase) m revenues that were me rued during - D rate mcreases to custamen toulhng basten 6% ard 11% 1991. For b0hng purpmes, the SPA has been incorprated 9 mvr the threefar perud 1990 through 1992,wah the into the Companyt Ftesil Pud Adjustment Cinuse (FCA).. At DPUC subsequendy detemunmg the acn.a! tate increase ^ m - .r for each year, takmg into account the appeopnate levd of Siner)muery1971,U1hashadaFCAin f fmanaal heshh for the Company ard the e5ea d the dl d hs retail tates. The DPUC k reqded by law w cet 1 g increases on the Compny's customers and sharehoklers. .me an pen pmceedingprior m uppmeg fuel ? ' f( Under the agreement, the amo mt d the Companyt Sca; adfasmurt chags d ensaric tdes for endt month.The' y bmoF Urut 1 imtstment that can be recmtred through. , law pertdts mitomatic V %hechagesW, ., pQ customer rates wdl be imuted to SMO mdhon, phand4n tol - DPVC falk to act within fne days d the adenomusmue 4. <q i g , prm% akhoughmRmc6gluegessieabemalgmasa5U, 3 rate base over a fivepar pened bepinning in 1990lhe : agreement further provides that the Comper.y's nee <nsk. further revien aN appopnsee a4ssement by k DFUC sN . f'f ing rate of rerum on Common Stock equay (RDE) during ?,jPublichearkgmpsued abe.bnisatlussmuyduurf ' n@*Q the three years 19901992 wulbe htmted to a ceihng Af 7 h, I months,The DFW has made semeaulsidangt in W QgC9 t dxinsla4muussudogsandaddlehdusankdaardn, TW *f 13 9%, wuh a oor d 9%, cakulated ad the'Ciuponyt n jphthmepassedispjrg Q%gg,dyg%ge g Q fs raoo d Common Stock equiry capinlanden ggnp%ge,,,, ,a,,ma -n - a -ame vey-st m amounidemungs tn emss dihe i W h f % "% j g / ~M ht N, h~P 8 k (( gj$uss $ bastim 4 %g ~ i agamst ddened revenues tdatedioths I. usuumas phase 4n.& Compny may request d#g M thePottalkbek=9%onsprojeacab i V M66c4mannGednandnanmen%a~ - aA%p ; i, r py. mm Wmteinae s,.af.a,dteD january 24,1990deasonwerecompundonan.9%Qy%*i au n 6,M aker$er)1 gW t Ww ROE based on the Compey's pmjeaed Consnan Sedi QQ ~ kU NM ts equiry capitalcation ratio d 29.0% Ice 1990,303% fq%% pt! bh, 1991 and 32.0% for 1992 applied m the CompanyVase to cam up to a 13.9%. OE, based upon a Comuned $ndshM$'/ ~ @y - htse.liontstr,asstatedabove,theComupunyisinabannedlM ',Bessage R equay capnali:ston ratio'of 40%.in accordance winiduM igemag g' SEQue 'vides amagotherthirsforphmingd=Comep%pNM 'i ^ Seabrook'mla== Agreement.Therbanalsi recovenbleSeabrookImtsonentinto sehseesumea@(6%M ' M de , )earpened ascingJanuary1,1990,forresegrya yg deferted phase 4n costs durin6 the sub=yme FyserMn Mses' t Xe4 4g. .. ~4{pQg](ggi gr@@h%l}l}{ : g, 3 A ~ '

~. % y+%, y., a,s~

g fe+: y. y

.W 0 r for 1N0,1991 and lW2, ts m cort.phance wuh SFAS No (D)IncemwTames

92. Regulated Enterprtvs - Accounnng ler Pbse m inam tax expene consists of Plans; 1hc rate decwn ah the Company ta phaw-in f

ferred ted m) danng IMT and lW1 mto rate tuse byknuary 1. IW2 I"*" P= W to The iemammg $160 mdhon of aNble invevarent plus / "*"M" the remamtra aaumulated defened return wTll be phased Car rnt 1 nto rate htw in a srentratch equal amounts on knuary federal W' C l '" 41 l 3o 7 l.1 M3 and knuary 1,1 N4 1he Company w111 be abed ,we k. 3 %, 492 to receser the deferred retum ever a hve-) tar perxd !I ' IC # commencmgJ.muary 1. lW$ Durtng 1Wl and 19M, the Deirned ret i Company recorded defened retums related to seabrwk FMera! DM 11,1W C4 21h 1.Y.:t 1 of $19 0 mdbon ard $21 $ mdbon, respectwt!y 'ar _l220 5.4 )7 (16 % taa! &fened 25 537 16 6 % (410N Investrnent tax acd:s (3T2 (1.890) 00.352) Te emne tan expmv 133.4G1 126f64 ($63172) summas summme amamme treme tax compments charpd m k4m Ope atmgexperors $47.231 $43393 $37.963 06er emne and deduccore - ne: 00,767) (19.154) 00 0 ) l Arplumn d STASNa 90 1.488 ~ 1,745 (61.227) I { Cumuladvee5cc dchange l. nn accoununglos - I poperty taxes L559 Tacalincome tax expense ,$11491 $26,064 (163.172) summes summmme c msman t c .of theddmedinmeinnesw x s l { . c: mx%a z n + w., w w +. L + .-.- - i . w u n. m,. .. ' ~ . :h f, b* y* a ly4. %(pdf 6 3 p, B LTea W 'emm sa.Y;h u. 6 "M i ' rg,. A 3 q . T! me,et,eenMr '^: fe. W ' C W... w W E. (WWk.. ]h, h. A :rl4 i b' ~., j, M, '- % p(. wm 'p; h 9[ ,,..g. 4 i ' d u ' mensgransary$p},3 h f u. p [ w a g3..., 3 ma,w q A Qdii M) - aQ }f 5.974 U8374 $:,, L 47 O - 3 e5999 4-3 ^ ~ M >

' p$. jm yhyshyennemensee

,u 4 4 W W,;Mantentemeneet4S Q/ Q h $We R Oi; . W-4 04,90E)R*7 "'Q % Q M ' %w w.Assenalset h ]$ M ,1 w J !=sseestmaanite pa ;f r OA w mm wz.e wmmer u w -@3;o; 00Endisedg.,gi,,1gWg,4, psp 65yssipqpogr:,, 3 g g%2 g s % % &mimonialenseenut@G; QLes0,4dysi[C g fst/gN&G 4 m M @>, m.. W $90 7: X..# 7Quensten u 3. N Y. y 73 4 1.g. g, $,,s e 44.p s h,.y>g> =q q 3. A o j .g y y g yn . a .,,aeg. t +.g

} s f

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7[h hkk}QQ((fhfy;f.N5?)j%Cauringgg pg f 39[\\p%, I c? E "y M; g @ @ W:4'?"tM34f~ a n$$a% j 9 15 l n- ;

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W,

,q .w. .n ~ s a ?M 4 u f,.~ <~ st 43

~ _, -g. m w; j.- Tool income taes doet from the amounts cteputed by spr21ng the lederal sta:utory tax rate to inaw 3 before taxes. N teasons Ier the dhences m as (cam Pmfas Tm PmTan Ten PwTas Tem 1st teos test (OLUs) Cmtputed tax at 34 % leden1 sunury rate iP 274 $27.244 (146.417) 4 trwreases (reJxtxe resulang from Drferred return 4eabrook Urat l 117 C e lla (121 N.' (7.311) iTC takeninta incorrie 1 22: U :: tl.tW) ti. m (1)0352) 00352) Arsarwe br eqwty funds used dunrg consmwtun 1& 420 (I N S) 09) (W (13 249) Apptwa:en of 5FA5 No 90 - kkut tuas Merentals 95.012 32304 kk depreaaaon in excess cd ren.normah:rd tax depreaanon 14 9 6.7d4 12.935 4.3% ll.t S6 3W3 State income taus, net of lederahncome tax benefits 12h47 9347 9,0 34 SMS (12.284) 18 107) Cther nems - net ($977 (2 034) (5.744) (1.953) ON5) (1314) Totalinccme tax cycnr 123 491 $26.m4 (to) 172) sammme amamme n==== E5ccmt income tax rmes 37 es 32 n 46 % m -. summme umm se B h!n Reform Actof1986proddes for te lend editbaal money to the Corrpny under this 3 a more w+d.emnt corporate ahenueve mmimum tax revohang aedit agreement, ahhough bormings outstand-(AMT) for ytan begm9mg after 1986 To the extent that ing at ;he thne d such so occunence sculd tot then b the AMT exceeds the federal incca tax computed at staru-become due ard pynik. As d December 31,1991, the tory tates, the exceu must be pd in midmon to the regw Coropany lad $13 naon d short. term borrcmings ow tr tax InMty For tax purpses, the excess pid in any standmg under a revolving ordu...,.eit,wth a 3 9 4 year can be camed forward indefmnely and cdset agatra - group of banks, that expired onjamury 31,1992. - any future year's regular tax habany in excess of that yesti wkhuspectasblenn temauve AMT.The AMT carr)hrward was $3.8 tmlhon at ;. December 31,1988. Dunng 1989, the Companyi regular c ' W I8 8' h

My taxInaryexceededhstenutin AMTlaybyen1 y/

Y M, 4 ' ' R amount greater than 53 8 rmIlkxt Dunng 1990,the Ccab M pany)reguhrtaxlabanyexceededitstenissWeAltihb8U MD N * ' NI#dQJ.CM PC ~ iry. As a resuh,therewas no AMTiengcantedinsueglas g tessunapspep%si ml g mi - """4 M d O N , D 6 2,j U M ~ December 31,1969 and 1990.W AMTcasrylaruss(p *J d9"D**NW WY 7 * ~ ' s MWdM L ~ ' DN ~ ~ $9 9 million at December 31'1991' e +w xM c 0% erase

%gswwse sweyc;g neCanpanyhasarevdwignedk) @jhippushecemggg @f q y 6 IE3 Siert TerustheeO

^ ""*8 Q avec=nt *1th i s=p a banks. whkh cunendr esuids, g r%g,,pg4 g,ggg 3gp gyg yg tajanuary 25,1993. w barowmg hmit d this iscinty h g g w,y#p gl3000M15MD ?@$me MM 575 mi!!on.The fadhry permus the Company to bonow q ( '

yes,g g g W t %

funds at a Ductuatmg interest tate deiermined by the pisse M 'aWj lendmgmarketinNewYork,ardahopennintheConO@AAssssheedissensiaWi&@[%% N gny a bon-money im exea perioas dene speced we%pHastis@msMM Q Q%assve w# Q t. m e ssoms p A m e n. e by the Campany at Exed interest rates det:tmoedby theM[.d6$ Z,MbMMjNNCM$W% Furodouar interbank market in ladon,by the cistifmue 'Mmm c.p;y y i 4

hm g&

of depma market in New York, or by bkkhas. st the cm.g$ Q gj' ,,gg pany) opoon. lf a material advene change in the WT ban:M ^ -m athirs,=== or condition, fiamocial er oiber@ gg wi.e, or prospects of the Crsnpeny and les subakiladen. ennMM$1gMeg _aseeksdA> a%-dL-,ibasis,shouldoccur,thebanksmaidsmu% ~ ', ym, 4 g u, y 4,n 4 yg;gg sg3 - l, e t,.. ' ' :h:,Q t pmyy;':%y

n ysg3 u, g,-n*?Lz$g y: w; g-w L x xya m :

W pg._ pggg g4p 994 A-1 4 x wwn gng .x-w. H

b i V 3. E i

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h. 4-j i

(n % ' 2 yinformation 9 Re amount d m.untenance, Ahrrtug (ontm l coso, and the prcw. ions fa deptemnai and amNnzau The werpens d net pensam cas.m as kh l other than set forth m the cwMated Stawnt d %, cm d herrim camenm'#r Income, are nat syndrant, and there are na royahn gad i 3 155 I *l Tues, other than mcony taes ch,vged to traemmu on prowed twrefs g 20 3M lo.il9 i costs and expen3es arc vt fonh bekw A,tuat rrtum on plan awts ?W ll 51 t 0th. bte Ass carrants 12' 22) 125M $24 W l Lu! red esta:e a dFamM

In auton a Le d $1R 000 wu rewgn.:cd urat WE M a3 a ll l

pryri .2 m la 754 13Jr redt d a cea& rent uv.h reprd to the 9.penrnta! Pian !i Oier pnrqa'4 payre!! 6w 5 572 4 nc A9.umpors wed to determine perne wso stre i. ,$ Y 021 ,543 M4 Churn rate 8W 7 25) ih2 i Annge ware iraTeme i $0g 3m ll Owged to l{ ' l Orm'rg tat exprne in g $50.243 sutw bpemd L,rg term rate dplan awts 8501 8W other acecums y a 2u I! I $W2 150 921 145 0u emmmme ammmmes names. e: }l 1 2 (C) Pseeine and Other 4 l Retirwoest Benents 1 ii 1 The Compnyiquahfed penson plan, ,)j fl j whh a hued on the highes consecunvc three prs of ^ py. covers substannaDy :D of as empkycs, and to ennre cost is bome by the Compny The Compny aho has a non quahfed surplemenal plan for certam cucumts. The net pensen costs for these plans for 1989,1990 and +i L n 1991 were $2.030.000% $1,498.000 and $2.054,000, respectntly, f l 2 h ~ 1heCompnyifundmgpolkyfor the l quahfed plan is to contnbute each year the ne: pedodk-4 '^h 3 E 7,f ~ % u m m,ihe e any pr will not be less than the minimum lequired con? " ,f -N a- . by, tnbuton under federal hw or greater aban the inesseum, QW a' tax deducuble amount. Due to the expenance of 6 {=d,) '

a ff v,

y 'J M6 the Compny h.u not been reqmred to nule a some6u- _D W,y hO Q[I/ ,f Q & ,y ;j7. > -l consmce1985 Thesupplementalplanist=&=% < +, l m..o ht g Thequahfedplantinemcableinuthad, NM4 S y dltir =r <l n;s

.c

'MW a x s H p-J( Ag* l constsa pnnetpDy of equiry 3rd ftxed-interne secwtoesp g h, m ;p{Q f L 4Kg 'Q ;g,, I d and real esure mvestnrnts in appreamately the foBoQ, 4 ~ y y 1 o fay lA&n g g v1D %.. y;, percentages. i $N-&if f% is h M Y k ' f ; $ h [Q & N

%Asthed

,;f fl% 5l ?q@ < ' j 6_f 9i z/Q ( Asent Catagery N vv R4 s N d, % n 60 ' ' M ~ ~ ?, ?,e "M EquaySecuntes m4mw j/2WWe'4 J #E,n ! M,, %=, W.. e y A, W X o axed-income securities 30 : om-.. .c + -- 4 7 A - 161 Estate " 10.. s.'s .c (($f .A> J.-l k d e$ j[(m(Nh4 t u tM"[h.-u [ M.MtMMNZ E*,"t i. wu,

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-s-hd 19 N#bDd, 1 y Y k ; q q m i k d*f / % % $.[ % g s % 6 ; l 5 ; g: 4 ' ~ s ,+,m. a., %,,- g Q o p nQ o y%Q,a -~f.pn gwn, n,wgm.y ggg %&,a. b w wpg + mn y s ym \\ a,- f - d,' p - p y p : g y p g g [y ~; Q ] g g g,- pj g gy E ,KgF% }} L" g 74, t.W ' ' V'

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4 y

,x4py l n y l . ' 'v <;p t 4 + ,o p 'l mw w emmenw s.,,mm.m. om.and n Mas Phn Man Mas ~N ~ Onomadier11.1998 Deusehme It atto e ,e (00th) e The funded sans and mounts recepu:cd m hunic sherts are as Luiws 0 ActuarW prevnt Wut d tencht oblptm 4td brrrfa oNeten iAm 192 $ 83341 $405 numammme seem nummum smus Lernated benclutbtun 5 44M $42 1 85 628 1405 emmmmmme amme ammmmme same i Erwnahanon d amued pensen LiMtv PrwcJ tr-rfu otkaten $10 W F5 ll24R4 LAO tru bir value of pan wts 151 e20 0 137IH6 0 I l ~ Praected tetrfa pester (rs3) than phn esm

Ii232) e5 p,w2)

Ao = Unrtupe d pror wnntwf 17 135) 0 (4 121) 0 .U t/nrecogneed ret pn (kW trorn put experrrae l53 4 05) 7.004 (m Unrecogneed ret awet (otknw at dxe d inital applxwn 15N4 (104) 16.201 006) .a krued penson haMry 1 12325 $o46 i 10 402 1515 ensmumme emme asammme seus t Ammyxes uwd m esumatmg terrfs obiptuns Discouria ra:e 8 25 % 8 23 % 8 $0% 8 50 % [ Awrigc sv incroce 530% , $ 50% 3.50 % 5 50 % Dunng 1900, the Compnydeveloped an 1 Mleks%0easd Muut early rentement incentat program lor non-uninn unpkT At December 31,1991,the Company had ces who were pension chgible. Accepunce d this program, the fetowir g interests in joindy owned A' mts; F stuch was striedy voluntary on the part d the emplope, e ^ + e 8*"dW i-3 was ! muted to irstviduals whose retirerrent wuld result in ' ,f 188"h8W f Rudb' V a educoondtheworkforceandlowerpenannelcosts. " ~. \\ edse Bapsedenen' t Sham-1990 penson costs for th% yam, which is unfurdedJ c .seabmc>l.Und> 7, %

l-4 ^ Nh*$642l 1 m $17.
b

+ amounted to $530.0%

e m

' 17.5; y # a. In addition to provahng penskm benefus, ; MillstoneUnit 3 y 3 683 p y 134 A D 42 7., j ; 8 A p 'i the Compny provides certam hahh care and hfe insur< m.; NewHaven Hador anceberrfitsfor retiredc.mployeesard theirdrp=k=k * $ TT5etion W 4 A 99fh y . pp4 SubsanaallyalldtheCompanyiemployeesbeconeepyb/IM M j?Tw ' N J. W fM N b 48838 c h tmens% Q.' 4 d k. $? O, ble for these tenefus when they reach remessent aMgrs e MN '@M3 ShD8 # O[Q Y%%ITMk M Compny recogm:es the ctst of providmg duni 43@@MMM MM ap y as-you-gotasasbyexpensingtheannust ' MN Mma Mh$"$% premiums,which were $ 8 mafion $1.1 iQ h m rrulhon for the yents 1989,1990 and 1991,' .z . Eof December 31,1991,the Company was fd$4 _ 'Mh Mh apanseag[g j benefits for appoximately 604 retirea or their ~' A5Blumnsd%se'elumsindghippfAp ' W W @M @ag4w@s J: Nct106,'Employus'AccounucgforIbst-redmtuntBenedWMN7Qg gg[ ^ ~ In Decembet 1990,thh. O i yy ^ m N? fus other nan rensens.na W.whkh numit 6PQdp 4 p.ag adoped ly 1993, requires, among other thiny, thes qle)g QPUW % liability for such benefas must be accnsed over dspeded OW Te commmcing with zu empbpe's daie d hlre undl thi dar2M3k115888dl5 kY that the empkyt is chgible so ccJlect benefas. He Cann-MMM M pany has detemuned that the efieht of this wcomanhqsTQ@@ dange sM1 inceme its estirated annualllab8ky fa i qI Ing in 1993, from $1.8 mill!an to $6 p$mn,M[ M rate treatment atthisdatehasnotbeetidUnained,de98D. ".* l Company pints to seek recxnery of dune imenenad anni @umQ gu [ o#mw s ihmusse i 6M&eddhk1 ggg - x Mg ~

rv. m ne *mm ~c f n. i cats assacuted with Seabmok Unit 2 for whrh rmwery (wme d whrh are captal lemes). mcludeg arrangenenu has nct yet ken apprmd ke sutement of Amunnng for data pnwewmg sM dfwe eqwpnrnt, vehries, offre Pdaes - %Tountmg for Ahartionrrrnts and Dtsallw spre aM od tanks The grms amount d asvu rearded an:n of Nant Costs urwirt captal lenes aM the related obbptorn of thov i leams d Dettmkr 31. lW1 arr meded on the hal-Ul Fuel Financing Otdigations and Other Lease Otdigstioni, The Cornpnv bs ule and teachu k future mmimum leav pynrms urwier aruncements mi a fauncahnsurv un prendmg for caputleecs ndadmg the kabnek sale.icadwk tuav nudcar iuc. ung t.p ra $N mdhon for 5eabnek Urur aaen wh h is bre.g treated as a kinptum faurvmt are emmated m be as fA>ws 1 and up ta $10 mdhen far Mdhtene Unit ) thdet these arnrgemens the Compam pap rent for the fuel. durmg Nut the part 100(N the tmie when it t< bema used m the nudear reA tot of the g g3y getrotmg umt. m amounts that are calculated to rum. im g3 tsrse the hsor for the daea catut ha incurred in pur-m4 Sw chamg the fuel. phs its fm aang awts mth a preentage n95 3.424 retum thereon based on as Duauaung cost of thirty <i.iy Iwo 4w a'mnvrcul pper krrowmgs lhe Compny is abhpted .Orr IW6 M7 to insure the lud and to ademmfy the leser apinst all Taal mmangnal%mmes 8e 119 habthry, t.ucs and other expemes mcurnd as a result of its taa Amousrrpeser.ungnerm 57 M owirrkp of the fuel Each lease es tenmnable on two Iwent value dmamumcytallene pynrno A, 310 years' notre by either prty. but it is termmable by the Preiers value d fututt nudcar lud lease pytrer.ts 614M r-lessor, and the Company must purchase the fuel frorn the Totalka e obbptions 197.749 leswr, upn the occurrence of any orr of several events, emmens 3 Indud ng any adverse dunge in the federal Atotrle Etergy Act or the terrns of the insurance pohces on the fuel that is Capcahtarbo ofleavs has noimpct on } nct satisfaaory to the leswr, the lessnts becoming suljea - Income, smee the sum d the amortizadon d a leawd asi.e p to the Pubbc Uuhty Hokhng Compny Ad d 193 \\ or any ' and the imerest on the lease obliption gals the taital l other statute regulaang pubbe sernce arnpanies, as a . q expenw allowtd for nte-tnakmg gupon / result of the lease, a fadun to obtain or maintain any ' w= . n Perstalpaymemschargedtaopentmg 1 reqmredgovernmentalapprovaldtheleaturangertent, m cxposes in 1989,1990 and 1991 amoumed to $13.8 mils and a nudear acadent at the genennng facility gMng rise ' ham, $14.8 milhon and $14,9 milban,respctivdy,-. ber 31,1991, approximately $65.5 mt!han of nudcar fuel 1 7 O (.[ ". ~j to habthry or damage m erru d $10 mflhott, At Decem-Opersonglenws,Ehichare chnydtay f, ' Cependng cupense, consist delarge nurn6er af smal!,tdne was bemg finaned under these is.cr.e.. " Theh hsEMNidhth4shungsensedagreasenuforawidemisty ( ply Agreement witha fmancialinsdenkapovensinf g IDCC M M$mame;Mp M finanangup to smmaan m.somanis

umiaWWm2,n ysesimummmoise nw - Y Lar $ $ f,,. N g ; gaggggg,,

ph w M thn agreenrnt,the fmancingenery Ahe Nw N v ,, dduiNW Q@D MheCampeyhasexuadluto unlps,etalarxi fud oilforsak ,an ' *W SI 4W Compnypurchisesiluse fou6 fusbM 'd'884 i ennty at a pna heach type of fuddefsehmbgess6cjkhh =*sim amm4=====8* *pa fmancmg enmy b the dina costs las he=md mis,his s NOMNN"h@k] hN[b 'N" "'A"' chang and storing the fud plus a chsge far M %[a k e p w.m.,, h w[y v an invemory d the fuel determined by miserna es shP jN h h nueu gimemaneyay.dmi.n.a m a I maalperinNewuThecompa@rnh.sm us#m%#Wm elwaal= fWBdwK Ms + insure tw fuei tnwaries and to indan.i q f enury against all habihty, taxes and other'supsuus taasse4y[@MR asamsuitde-nnship.m.m,uman.rt.msw.s y@ka theCampny.ThisagnementcunemiygasubwRhnWN ? T i ary 1993. At December 31;1991spysadeiss$ $1$2 yyg - pf h I

prip milhon of fosil fud purdiases Wue behig imagupseder yg$^C MN tHsagreenrnt.

y ; A C C @ ! ga w%

WWgW . a ; ;;-w,

e diI W Sp.h @W:c [$n%g[+

In'8dditiott2the R M cribedaboveftheCornpsnyhasemesedi'masoduthmusphan ;. re u ym. n s N p' Q P* k il %$g3 n p p%d;g, e % 3.mL]QQ.A sp A g g ; p[A4 y 9 ~ y gA i, Ni 4( <c w p ao A m

W, .J[ l/ b

confirnrd by the knkrupq court m Apnl of 1000 armi, murt Int the Etn her bankrupq preceed.ng twurd an ca May 16,1W1. IW11 compicted the financmg required order apptwing a st puhtun among Eln her, the dfe for pyment d its pre knkrupcy *ccured.d unsetued c.al conurunce ohts kodholden Ul and The Gerrant debt under the f,rst suge of the reorpnuxon pbn ard ight and Pourr Gepy (C1hPL a whlly+wwd suts emerged from knkruptg The mord stage of the NU udary of NV urder whi h (1 ard C1hr agreed to make phn. urder whh PS Nii wall be acquired by NV has advante p)ments apmst thru respeant Iuture trenthly recened requtsac aptmh from the FederalInergy Regu-proyct p) ment obhpnoru as needed.up 'o W mdlnn Ltory Comnusson (IT RC) and the 5ccunces ard ard to mdhm. reprtntly, to te uw d to ofbet any shon-(

Exhange Commtwon G ECh ard apprmi proceedmp bil m pyments by un her to the Mbnok proya for are perdmg before the NRC. tiarver the iT EC and SEC operauen. ma;nterun<e and sumbt expernes lhe amount 3 appronb are betng challerged m court practdmgurd of I'Is ard Clhiwaptnts utdct the mpubten ard there is no aanmce that the NU phn will be unpicmented ord< r truy be reduced to the extent oder bbrmk pmt The Company is unable to predwt the impntal an), on the owmen becone prtopntun the mpubton (Mbre of 3 operanng igense for Seabrook Uret 1 if Nt3 teorpneaton adances made pursuant to the mpuhaon amounted to phn br PSNii is not successfully tmplemented appmxmutely $4 0 mdbon at knuary 31. lW The epe bton and order pnmdes that Ul and CluP wTil hast A Vermont pamapant m the bbrmk nghts ard remedies sulstantully m accordance m1th thx proya. Vermont Electnc Generaren ard Trartstnison 3.,g gg,gg ggg 4 Goperamt,Inc (Vt Coop), whh hch a 0 4 % owwr-g gg g.)cg.) w,th respect to thnt a&me sbp share. bs taded to mak e constmcuan ard operatmg g g g g, g furd pyments due smceJanuary 1986 Although Vt Cwp amount d the aa ances plus mterest ard the nght (avail-tesumed partal pymr.nt d as share of cperatmg fund pay-able ordy to f%)I under the JCA),if the defauh ctmnnues nrnts as of July 1,1990,it conunues to be m defauh urder b e h b m M mum m w e the jomt uwmership agreement for the Seabrook prorct. Eln btri rights ard interest under the JCW and to The defrierwv m proya furdmg on acannt of vt Coop's assune such nghts ard mterest, m terum for p)mmt d an defauh has been and is kmg made up by advances by the amount @ @dhe dMbht Company ard sorte d the other !nmapnts or their afEL-W&M kavae dMM mes apmst thev regatnt future monthly pmyct py-intenst in the Seabmok poya. icsdept and aber ment obhptons The Compnyt share of adances oc bcd UldCWPaA h s@e account of these dehnquenc es anmunted to appranmaely ard order to forebear exerching sur.h right to termmate and $1.2 mdhon at hnuary 31,1992. PSNil has agreed to pur-Mha@sd been bn bbok n6 chase Vt Coopi ownerdap share as soon as powble after pmWh wrmmanon axe descad beh the eficctnv date of the NU reorpmzacon phn in PSNiti ~ bdmdedm%hthaduusN bankrupey proceeding, and Vt Cocy has stated that k ma MdahMMWy 'Q

ntends to u e a ponen of the sale proceeds to remedy its ahWMMM L

b bbrmk pmya dehnquences and umecured enditon. The obystion d Ul and C14rP m ^ s On February 28,1991,541saur Cor, make adences wW temenete, ard upsymem by M J,e % potatmn (E1M Powtr), wtuch hdds a 11.1% ownedupy ha c( the adunas w,dt imenst@ nquind, upon ,?' y y% share in the Seabrook prorct, commenced a pmessding.t ' the carba d August 24,1992 ard the occurtence d any C p t unda Cbper 11 d the Bankrupcy Code. Eth hmer,a # 1; one d sed agmfamt twnts afecting Wmn ce hs ; whdly-owned subsuury of Eastem Vulaies M 4=== Q ' ( bankrycy ptecedmg N Campey M m aussi f (ELA), was orpm:ed sdely for the purpose of eagerhqt sa; f what hupact,If any, the M hmalumkrupcy peceedmg7 s ", T y owmersbp share in the scabrook project ard selling in the : Mhamat the opambg kenne Inr 5mbmok Unk h and. i gd by the proyct Ela btr stated that it ahmi this w t ahnjdnt tmnns of the urst may be tqukd to she in 'qg whdesale market its shan d the electnc power produc:d v (&Companytarmotpedhhatothera&mitandthe,ffy$ R bardcruptcyproceed.ngbecaux thecashgercratedbyits NN?p noemQwdatWsbanis9cy;noceadmgas~,, shon-termsalesapowammnentmarketpriceswouki& ftTaseak,sabrmkpagg,, i,gy?U M . qq ggma,,pw q be insuftrient m py mtendue wy u, lm aa n on p3 w stardmg debt, because the prospects for signeglong-tamagW ag.MMN CaspysWehheWs a 2.Ch N : postr sale conuactspriormthatdate streinmimal,and / P %hseinshe$mbigokpaject, ass======da % E W tecausethe managementdElnhaddetermmedadteM, poosedageder$O@KadeMOIb [ puvdeaddmonalfundstoEinPowertoenableitsoambe, i : C4cpbmcendhayadeseQlaNiu the mterest pynrnt ElR 5tt failed to nake he emuMy K ihn W h a hap 4dsedsMaimerd 79K tsM construcnon and operating fund payment m the Sedmook 4M)H Coop has base ndddininese dus duet M #C projea for August 1991,which us due on Aagust ljuodii (i MHeanEs hte in the tnanth On August 29,1991, the lenkruptcyg-hh b% ,y pa , }A G D >w(y;&g)gg; & {y. y,&&,4 my %y % lgn ; .G : n ; &L s - g y;ycP5M;g D A $9 t p 4 7 ja ,, yea - ,- < ng' qw g %pm, :g +

-:qypn w ,7 i 1991, had been attempung to prewrve its sohrne) by 19-newsewa Centlasano6es restructunr.g this debt. contactng to purthase wholesale w,,,,,, x - 1 pourt at leurr cost from a suppher other than PSNil. and g gg danmg reguhtory permessai to increase its custorner gg g 37g,gggg utes Ahhough Sl! Coop has contmued juving its share of fram a smgle incdent at a nudcar powrt plant Se f: rat I vabrxk project construaion and opermng avsts the hdM W Md by W-tunkaptcy coun has buud dncreton as to whwh of Sli ing the manmum anuunt of commenully avadable asur. Coepi ceptons it should contmue to honor tons" WmtWe a WM4 an quenth, the Lompany is unable. at tha cme. te w w hat remem of up to $63 mhn per truident. lewd or impa. if any, the pro;eedmg wiu have on the abbt) of cAh d the nuJar uruts k ensed to tynte m the Umted Nll Cocp to sausfy its pptent obhcatons to the Seabrwk 5 tate subwt to a mAnmum aesment of $ 10 meen per project. or en the eperatmg beense for Seabrook Umt 1. madent per nu&ar umt in any itar in dJ: tun,if the and 6e Company cannot predrt what acucn a and the ggigggg y gg other pint owwn of the umt mil take m response to from anv r udear madent eneeds the traumum amount deselopmena m thev regards as they nu) ahnt me of fmancal protecton, each reactor opentor an le xabmok pmyct M an dhi% of $63 m4nn oi $3 2 mdwin uc n ing p, m ig The manmum assnrnt u adjusted at least escry hve Nudcar generatmg umts are subyct to ytan m rdlect the apa din!hton Based on as interests the bcensmg requirements of the Nudear Regulatory Com. m nudcar generatmg uruts, the Cornpny estimates its maston (SRC) under the Atonue Enerpy Act of 19R as riuumum hah!ay would be $ 20 3 mdai per incident amended. and a vanety d other state and federal requito flowtser, awewnent wuld be lumted to $31 meon per nrms The lunsmg of Seabrwk Umt I was plagued by mcident, per ytar. With regeet to each of the cyranng leng6y delap and was opposed by a number d mterven. mdear generstmg ela in which the Compny has an mg gmups who pmetpated actarly m admmt>tutnt pro-It" trest, the Company wMl be obhpted m pay in owwrship AO'Ic25thdd Share da~ y mmmry aucet result-n creim;s, fJed nu'nerous lammts and demonstrated at the constructon ute in October of 1986, the Nudcar Reguh. mg from a nudest tncident at any nudear genentmg una, wry Commisson (NRC) issued a full 40 year operaung 'heNRCrequiresau argercranng kense for the Unn, subject to metal condmons that had uma m brain tropeny hnnce cmenge m a mmumm io be sans6ed to penmt full part openton In Mardid amount of $1 M buion and m emblah a system of pron-1900, the NRC deternuned tLhese conatkns had been med use d 6e insurar,ce M in 6e event d a mdear met and authon:cd full-power opention of the unit. Sea-ith nesyvem nquW6e 6:s $1 MMmd Wok Umt I acheved comr:rrcul operaten status onJure insurance pmceeda maaM:e6e mdeantaaor M 1990 and full power opennon on July 25,1990 At the

WWN UN present ume, the only bcensmg issue remainmg is the aWen fa decontaminase W cleaup operaums, ;

NFCs revrw dan intervening groupt appeal fem an - Ot@ foHowbgcampina@mbsmuldse M NRC bcensmg board dumt 6admg that the Siste of New amrJany,d6eugeg@mampewadsbeane l tiampshiret plans for prosecangbenchgoen in th;.vicmity swdnNewthe2 mwd 6e n&gener, of Seabrook Station in ne event da indiological eser. a%tmie inM passp=aAnam ininat,the e gency are adequate. It is not==wp-d that the outcome of.- Compn O @ mgayb @ e W tha appeal we resuk in mgn==iar,or revooicion,ofsc. shandsec mam full-power operatmg license ios Unk libut NRC procted- ,j 4 m,s a invesn y tia m pn pud s,a qu s o s a n C m. a %' g,,,., u,,,g 1

y t

, guagenghe - 7C d gressnrn ard by NRClicensmgboard cors6deration of

4 M

V% technical contentions may courmue for some period d time

i ' "y\\T' :

ar mto the futu't. 4i GlheCampseyrisinwd shamannnust

C%

t 4 go,'aes for as pump sdstik mapact tohs 17.5% omanhip n 721 Regulsorypromedmgsatt pendmg TJ sna.iam M M ' H bdmeseNRCwierespectmihemodetort.ponsiba. w,cas 6, m2d=--Missalinsbian a W H and$let e M r7> ny for nunage.nentof funherconsuuctionwrkandfoe ' ~, opetator o'5cabrmk Unit l io a subddlary dNU, as a :

6ed W M h hM9,4ehaemal J pandthebankruptcyteorgschatimplanictPSNIO J k (input!.ajauhydeMS')endoitheCempanydyse MP <..

dexnbed at vinandngQuatrummons of oser ownar YW pauta C' nwunimswes2%e i above. %e Company and avtral othei joint owners d ahe :7 tbassiedde M M ust 2 a n e M Q ( 1 4.h n='=4sdepuissadraskanOncuenttis una have agradio support thispbn, ; g, s, . beookuut2 ~ yun,sWabsadsk, tu ~ d @ neg @ @M ' %( sbauldhehednesit/ i f Jamatkesiddendhp ~ +- Qy M @ Q w % 9 4 ; 4, w " w w: %a 4 9 q Q+ ,a 9% w mgpS%gg g n ~ w w m

. - _.. _... ~. -*MWMM%W W N!M, z ~ VWiWM%MQ7;4{WWN'MMp.ycy, p7

.a
.c =

74 xy y J 494g 33 p 3.. mC s. - c m : n ww yy a n n,:- mc n. r4,m - g,ygyQ,qg9%3: -? ' Q MO]y<m n. a-n Q ^ W 1 ..x xx _ r 5s ,m> I *ihesehgevaluec[deSentimokUnk2ames.TheCod M+ M!Is W:SitudarPaulgesposaland N %: 4 s m m .~ v

' IhmiserPlantbeesuminieming Q.
p y filed a pennon with the United States Tax Court for a redetemanation d these acessments. On December 24 Costs anodsied with nudcar plam oper-

>4" 1991, the Company at d the IRS fded with the Tax Coun a atons indude wnts for asposal d enrWr wastes, . jomt status report statmg that the pmes had devekred a indudmg spent fuel. and for the ulamate dectanmnsonmg ge l, - comprehensnt setdement of the issues raised in the case-d the phnahder the Nudcar Waste Pohg ht d 1982, M i specifytng that the year of abandonment for Seabrook Unit the federal Depriment d Energy is required to design. frg 2 w as 1984 and that the total net sabge value dall sal-Irense, construct and operate a permanent reposnory for i ngeable phm and equipment that must be recogneed for high tent radioactnt wsstes ard spent nudcar fuel The [g tax purposes was $50 mdlion as of 1984 (P whwh th! At requurs the DOE to prmde, begmmng in 1998, for l Compny's snare wwld be $8 75 millon, based on its the dtsposal of spent nudear fuel mi high level radoactwe Ma j 17.5% overslup interest in Seabrook Unit 2h The com-waste from commercial nwWr plants through contracts (@ l prehensivs setdement also provides t' at any net sabge with the owners and genentors dsuch waste; and the 2 %]% - value that is unrealced oy IN9 wdl be deducuble for tax ' DOE has estabished dispmal fees that are being pd to the [ purposes at that ume. The pimes subsequently compkted federalW.c.t by dectric unboes owning or opentmg necessary competanonal work, the pregranon d Tu nudser generaong unes. In return kr pyment d the pre-j Court decision dxunents and a dosmg agreement refka* scribed fees, the federal govemment is to take title to and df4 j ing the comprehensnt ser.lement, and the Tu Court - 6 dupee dthe unknet high level wanes and spent nudear 'y D i entered its decision, in accordance with these h"" - ! e i fuel bepaningno leur than 199piowever, the DOE has onJanuary 29,1992. The Compny expeca that de h4, # announced that is fum h$1riu mie aposaceywili notr 4 million net increase in the Lompany)in oblipton as a L be in opsuelon easter alum 2010,notwebsnahng thej p = resuh dthe agreement on net sah age vahr es d 1964 will ( - g. DOSsuMsud-=3nsponsidaytobegmdu-j l be pid from internalbr ajenented fura subject to feed'- Q MMpossi c' Sidthweladiseduslaussad spent fuelbegin-f ,yi e cryasdescnbedW Akhoughthecompnya=b=le "Mimiinsdum)mus _ T JWJ..-9. =w scabrock Um: 2 in.omphance whh: 1983 ducahe tun g y ,p the DPUC and the Company bebens that the DPUCilE,iM4 A g b based on is previous dawn pernuaing reconry b@c jgg ,Ami andursummiseuutsW e ey y Compny d seabeook Unit 2 ans, nuow any na menma y%bg 8PunfeelspelseG 7pyg e L in the Company) tax obbgenon arisirt rom dis'ssidenes f v due m ax ste aremiak ard inierest m be i on==indMy smag18mP* g g en 1, W,. wW ,+ eumghremastes aereisno umaceasm.imeseg%eg' to what extent the DPUC wouldallowsuch ieooserQ f IM8"8dI""Mtg Y .n% W de eld h - w - y

- - - =*mQ* aEM MamiendQ g

TheCm, sy mw w NN [l Quebecproject,a transmadoft,%, .%.~ endQuebec,Camda.Phulld.ihis.. Rd t theGpeCityof theIntfd%rfr0nt-c MN L 'which prondedor thelpleby N = mumd2000mepwens, A un-yes. Ensiend%.;inde Asen mqpwna-boun peryear,bamme ,h Ahhoughenogypnanifamulmin'dm ~ ~ =act should peaduce enereast smisupier. M hndpwjeapniapan,esummhlr y$ h=lsuPimnpaymmesequad 3135 amounts untilposteM4e'~ dE. d. Ihasni45%paulapsmg'shes J is corimpanneg'shme,el $~" 3 insdysion.cooprammh. 4,,paamselypo

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1 pg, gpgysqppg o im gt;& ,3 w. 4 the regonin which the facdity a krated The Northeast ImdreamentalConcerne Interstate low lorl Radxuctnt Waste Commission iden-In complying with ex2 song envuonmen nSed both Corurcticut and New jeney as dual host sutes tal statutes and regulatons and iunher devekpments m for waste fanhoes and. m crder to and potentul denal of these and other areas of environtrental concem, mdudmg access to the currendy opennng dispwal sites, the Core legislauon and stud s m the felds of water and air quahty not of Conncetwut has :emned to the NRC that Connecu-qurtrularly' rid rain'Jair toxics', o:one non-atum-at mil proude a storage dispul or management faabtv ment'. and 'gkibal w2mung"), ha:ardous w2ste tandhng for waste germted mim the sure byJanuary 1, lW3 and dispmal, toxx subsunces, and electne and magnetr The Gen,emor of New Hampsbare has fded a smular ccmfE fekis. the Comruny nuy mcur substantul copual expenth-canon wnh the NRC mth respect to waste generated tures for eqmpment modificauons and addmns. memter. mthm that sute. However, kcause sute govemments are mg eqmpnrnt and recordmg devres. and a may ineui resportsble for the deveigment of these facthoes, the additional operaung expenses However. the Company Company cannot predict that future deadhnes mil be met. beheves that any addenal costs mcurred for these pur-penalnes will be avoided and access to available dispwal pus w til be reco emble through the ntemakmg proces snes mil remam open if depul faabnes ar-not asadable The total amount d these experdtures is not now for wastes from the nudcar generatmg umts m whrh the determmable. Compar.y has interests. substancal cats m!! be 'ecurred to desviop ahemauve ar angemens, ahhough low 4tel radio. M nesesin Mew % acuve waste storage buddmgs at the generating sututs will for PmprtyTaaes be capable d stonng apprmmatdy twym d um _ As dW in TheStatemmt d Accounnng Pbbaes, effectivejamary 1J991 the Ccepany changed i. NRC licensmg requirements and restnc-us method of ammung for property attes from actrual nons are also apphcable to the decommtssionmg of nudcar cner the twrive-month penod following -nent date to generatmg unns at the end of m, etr semcc Ints, and the accrual over the faal perkd of the applicaNe taxing NRC has adopted comprehensive regulanons mncemg - authority. The effect d the char.ge in. accounting was to decomtntssionmg plannmg, cmmg. fundmg and environ-irenase camings for commt stoday $ 7.9 mdhon of rnental reviews. U1 and the other owwrs of the nudcar which anincreaseof $73 tm!b.on reptsents the cumula-gerstmg umts m which UI has interests estirrate demm-dve effect of me change at) musty 1,1991, ard an increase i mestonmg costs for the umts and attempt to recestr suffi- . f $.6 rmlhnn nepusents an increase la carnings for the year + I o cient amounts through their alkmed electne ates to mver 1991 Thepenfocmaeficctonprior>=srs,m=#u' oct - r 8 their expected decommissmng costs Changes in NRCJ 3 incetre of retrceafMy incordmg municipal property taxes regmrements or technology can mcrease esomated decem. %s < as if the newmerhed olactunnng had been in eflect for a mtssionmg costs, and Ul.s customms m future >rarsinay - ..pendpresentedisnotmanertalr - e. u s 4 s e. nencehigherelectricratestoof!settheefrectsofany 7 e. ..y_ ~ o,g t-l insuff.cient rate recmpy m prior ytan. ; x<@:. c.%, *, l 7,Fc@.w', TJv W7. 7 + NcWNarDpshtittIWSe6Islef$ i j,[ ' M;4b-';. y .2

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,3 u: - 4 a ^ (N) Quarterly Financial Data ttdet for the Company's (hxfrted) Common Eedy and selec:ed quance bancu! dra for 1Wl and 1 mare wt fenh h U1 s Comraon 5td is traded on the New 4 Drk 5td Exdrze where the h:6 and lew see pnces h tarukws Jur'ne 1N1 aM 1WO were as folkm i Per Sham Operating Operating Net of Conunce 1991 Sale Price 1990 Sale Price Quarter Rnenues(1) income become(4) StocM2)(3)(4) IGeh Law Law o E sim Q w n u, V 28 t. end Qu ci 3 W. 2% i-e ~ \\

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'8 The mdenture uMer which an of the Company's Debentures are issued places hnutauen on il) wholesaic power sales, mdudmg the pyrrnt of cash daidermis on the common stock of sales frem exdange contacts forme 'y recorded as reduc. the Compny and on the amounts that can be expended cens m Opmnna bperus have been redassded as to purchase or redeem shares d common stock.The i Ope anng Revenues m accordance with FERC indenture under which the Companyt Medmm-Term i Notes aM Ncaes are issued abo pbces limitations on the 4 requaements pytrent of cash dnidends on common stock aM m the i Ned on weighted evenge nunter of Mm den pciondenWMerb shres outstandmg each quaner er @n dthes&dem re-Mg +- in the amount of $671 milhon were hre from such hmits-

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t I ~ SECORITIES AND EXCHANGE UOMhlI5ISI5i ^ i WASillNGTON. D.C. 20549 Form 10-K (Mark One) i -[X] ANNUAL REPORT PURSUANT TO SEC110N 13 OR 15 (D) OF T11E SECURIT1ES EXCIIANGE ACT OF 1934 (FEE REQUIRED) for the fiscalyear ended December 31,1991 I OR {] TRANSITION REPORT PURSUANT TO SECrlON 13 OR 15 (D) OF TllE SECURITIES EXCilANGE ACTOF 1934 (NO FEE REQUIRED) Commission file Number -5R6 Eastern Utilities Associates (Dact name of repstrant as specanalin its charter) Massachusetts 04 - 1271872 I (State or otherjurisJction of (LR.S Employer lhardicarsan Na) \\ incorporat>on or orpnizatkm) l One Liberty Square 150ston, Massachusetts (MilN (AJJtess ofpnncipal executiw omces) (Zip Cale) Registrant's telephone number, including area code: (617)357 - 9590 j Securities registered pursuant to Section 12(b) of the Act: litle ofench Claq Rame cleackf]channe on rkkieptyd Cornmon Shares, par value 15 per share New York Stcrk fxhange Pacific Stcck Dchange i Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reporse,and (2) has been subject to such filing . requirements for the past 90 days. Yes / No Indicate by check mark if disclosure of delinquent filers puisuant to item 405 of Regulation S-K is not contained herein, and will not be contained to the best of registrant's knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K prj State the aggregate market value of the voting stock held by non-adiliates of the registrant. As of March 2,1992: Common Shares, $5 par value -- $361,958,970 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Sttares Outstanding at March 2,1992 16,933,753 Documents incorporated by Reference Pcrtions of the Annual Report to Shareholders for the year ended December 31,1991,are incorporated by reference into Part II. Portions of the Proxy Staternent dated March 26,1992 are incorporated by reference into Part Ill. i C

EASTERN L*rIIITIES ASSOCIATES 1991 Fot.n 10-K Annual Report Table of Contents PART I Page Table of Contents................,...,....... (i) Glossary of Defined Terms........................ (iv) 1 Item 1. Business.................. 1 General.............................. Ccustruction and Energy Related Investments............ 3 Fuel for Generation........................ 3 tbelear Power Is sues........................ 5 General............................ 5 6 Decocmissioning........................ 6 Yankee Atanic......................... 7 Seabrook Unit 1 Licensing................... 7 Seabrook Unit 2........................ 7 EUA Power Corporation....................... 7 Background.......................... 8 EUA Power Liquidity...................... 10 Seabrook Unit 2........................ 10 Deconnissioning Fund..................... 10 Public Utility Pegulation.. 11 Rates............................... 12 FERC Proceedings....................... 13 Massachusetts Proceedings............,...... 14 Rhode Island Proceedings... 14 Environmental Pegulation... 14 General............................ 16 Water Regulation....................... 17 Air Regulation........................ 18 Fnviromental Regulation of Nuclear Power............. 19 National Energy Policy....................... (i)

PART II Page Item 2. Properties. 19 Pcw r Supp ly........................... 19 Other Property.......................... 22 Its 3. Legal Proceedings..... 22 Rate Proceedings........................, 22 Bankruptcy Proceeding....................... 22 Envirc e ntal Proceedings..................... 22 4 Shareholder Proceedings.i..................... 26 Other Proceedings........................, 27 SEC Feview............................ 28 It m

4. Subnission of Matters to a Vote of Security _ Holders.....................

28 Executive Officers of the Registrant. 28 PART II Item 5. Market f?: Registrants' Ccoman Stock and Related Shareholder Matters................ 30 Item

6. Selected Data.........................

30 Its

7. Management's Discussion and Analysis of

_ Financial Condition and Results of Operations....... 30 Itm 8. Financial Statenents and Supplementart Data........................... 31 Its

9. Disagreements on Accounting and Financial Disclosure.

31 PART III It s 10. Dirtetors and Executive Officers of the Registrants........................ 31 Its 11. Executive Conpensation.................... 31 Its 12. Security ownership of Certain Benef':ial Owners and Management. 31 It s 13. Certain Relationships and Felated Transactions...............,....... 31 (ii) L

PART IV ~' Page Itm 14. Exhibits, Fimncial Statement Schedules . Reports on Fom 8-K.................... 32 i Signatures............................... 52 Financial Statement. Schedules.. 53 Peport of Independent Certified Public Accountants........... 59 i i 1 I l (iii)

ClDSSARY OF DEFIhTD TFMS The follcuing _ is a - glossary of frequently used abbreviations or acronvms found throughout this report: The EUA System Car: panics Blackstone Blackstone Valley Electric Cmpmy Eastern Edison Eastern Edison Cmpany EUA Eastern Utilities Associates EUA Cogenex EUA Cogenex Corporation EUA Energy EUA Energy Investment Corporation EUA Ocean State EUA Ocean State Corporation EUA Power EUA Powr Corporation EUA Service EUA Service Corporation EUA System EUA and Subsidiary C mpanies &ntaup Montaup Electric Ccepany Newport Newport Electric Corporation Pagistrant EUA Retail Subsidiaries Blackstone, Eastern Edison and Newport Connanies Maine Yankee Maine Yankee Atcxnic Powr Company OSP Ocean State Pomr Project Yankee Atcxnic Yankee Atcxnic Electric Corpany Reculators/ Regulations 1935 Act Public Utility Holding Company Act of 1935 Benkruptcy Court United States Panknrptcy Court for the District of New Hampshire CERCIA Federal Cmprehensive Environmental Response, Cmpensation and Liability Act of 1980 DEP Massachusetts Department of Environmental Protection DEQE Massachusetts Departrent of Enviromental Ouality Engineering EPA Federal Environmental Protection Agency FERC Federal Energy Frgulator,f Ccrmission (iv) 1 1

GIDSSARY OF DEFItED 'ITPMS (Cont'd) i Regulators / Regulations (continned) MDPU Massachusetts Departmmt of Public Utilities hEPUC thw Fampshire Public Ucility Ccmission !GC Nuclear Regulatory Ccmission WPA Nuclear Wasta Policy Act Price-Anderson Act The Price-Anderson Act, as amended by the Price-Anderson Awmdments Act of 1988 PURPA Public Utility Regulatory Policies Act of 1978 RIDEM Rhode Island Departnent of Envircrrental Management RIDFUC Rhede Island Division of Public Utilities and Carriers RIFUC Rhode Island Public Utilities Commissicm j SEC Securities and Exchange Ccmission i Other AFl]DC Allcuance for Funds Used During Construction Bondholders Cocmittee Officially Appointed Bondholders Ccrmittee Representing Holders of EUA Power's Series B and Series C Secured tbtes BTU British Thermal Unit EEF Electric and Magnetic Fields IPP Independent Power Producer KLH ' Kilcvatthour !&gawatt NEP00L thw England Power Pool PCB Polychlorinated Biphenyls QF Qualifying cogeneration and small pcuer production facilities pursuant to PURPA Seabrook Project Seabrook Nuclear Power Project Secured Notes EUA Power's 17-1/2% Series B and Series C Secured Notes due May 15, 1993 and November 15, 1992, respectively Seabrook Unit 1 Seabrook Nuclear Power Project generating Unit No, 1 Seabrmk thit 2 Seabrook Nuclear Power Project generating thit No. 2 (v)

PART I Item 1. BUSINESS General. The Registrant, Eastern Utilities Associates, is a Passachusetts volunt 'ry association organized and existing under a Declaration of Trust dated April 2, 1928, as amended, and is a registered holding cmpany under the 1935 Act. EUA ces directly all of the shares of cmmon stock of three operating retail electric utility cmpanies: Blackstone, Eastem Edison and thport. Blac'(stone opwates in northern Rhode Island, Eastem Edison cperates in southeastern Passachusetts, and Newport operates in south coastal Rhode Island. Eastern Edison owns all of the permanent securities of Montaup, a generation and transmission capany, which supplies electricity to Eastem Edism, to Blackstone, to Newport and to two unaffiliated utilities for resale. EUA also csns directly all of the shares of cmrian stock of EUA Service, which provides various accounting, financial, engineering, planning, data processing and other services to all EUA System cmpanies including the Retail Subsidiaries, Montaup, EUA Cogenex, EUA Energy and EUA Ocean State. EUA Cogenex is an energy servi-Teneration conpany. EUA Energy was organized to invest in cogetmc.. ano smil power production facilities and in research relating to energy or energy conservation. EUA Ocean State owns a 29.9% interest in OSP's tw 255 W gas-fired generating units. The holding ccrpany system of EUA. the Retail Subsidiaries, Montaup, EUA Seaice, -EUA Pcwr, EUA Cogenex, EUA Energy and EUA Ocean State is referred to as the EUA Syst m. For the three years 1989 through 1991, electric utility operations accounted for approximately 961 of total operating revenues. EUA also owns all of the cmmon stock of EUA Power, a New Hmpshire corporation whose principal asset is its 12.1% cmership interest in the Seabrook Nuclear Generating Station located in Seabrook, New Hampshire. On February 28, 1991, EUA Power filed a voluntary petition in the thited States Bankruptcy Court for the District of New Hampshire for protection under Chapter 11 of the Federal Bankruptcy Code. Effective Deceber 31, 1990, EUA decorsolidated EUA Power for financial reporting purposes (see EUA Powr i Corporation below). The EUA System supplies retail electric service in 33 cities and towns in southeastern Massachusetts and Rhode Island. The largest comunities served are the cities of Brockton and Fall River, Massachusetts. The retail electric [ service territory covers approximately 595 square miles and has an ectirrated population of approximately 726,000. On December 31, 1991, EUA Systm companies served approximately 289,000 retail customers. About 43% of the net generating capacity of the EUA System (excluding EUA Power's 12.1% ownership interest in Seabrook Uait 1) ccmes from a cmbination of the following sources: (i) wholly-owned EUA System generating plants, primarily Montaup's 224 W S<nerset facility located in Samerset, Massachu-setts; (ii) Montcup's net entitiment of 76 W frcm the 584 W Canal No. 2 unit, which is located in. Sandwich, Massachusetts and is 50% owned by Montaupi and, (iii) entitlements frcm units in which Montaup or Newport have partial i cuership interests (by joint ownership through tenancy-in-ccomon or by stock l ownership) in which Montaup's or Newport's share is 4.5% or less. The remaining 1 t

57; of the net generating capacity of the EUA System comes from units in which Montaup or Newport have long-tem or short-tem powr contract for shares ranging frcn 0.49% to 44.12% of the unit's capacity, including 28% of the entitlement of OSP Units 1 and 2 in which EUA Ocean State has a 29.9% equity interest, or entitiments frcru the Hydro-Quebec Project through NEP00L. See Item 2. PROPERTIES -- Power Supply for further details of the EUA Systm's sources of pcw r supply, he Retail Subsidiaries and Montaup hold valid franchises, pemits and other rights which are necessary to allow these companies to conduct electric business within the territories which they serve. Such franchises, pemits and other rights contain no unduly burdensome restrictions or linitations upon duration. he EUA System's electric sales are seasonal to scne extent due to electricity usage for heating and lighting in the winter and air conditioning in the sumer, he EUA Systs is not dependent on a single custcur or a few custmers for its electric sales, here is ne competition from other electric utilities within the retail territories served by the Retail Subsidiaries. He EUA Systm's wholesale power conpanies, Montaup and EUA Fower, hcuever, are facing new sources of ccvpetition primarily as a result of PURPA. PURPA was intended, among other things, to prcoote national energy independence and diversification of energy supply and to improve the overall efficiency of energy usage. PURPA created a new class of non-utility power generation facilities called QFs. PURPA allows OFs to sell power to local utilities generated by the QF at specified rates based on each utilities' avoided cost (the cost to the utility of generating the next kwh of electricity at the margin.) Federal regulation has also pemitted a second class of non-utility generators generally referred to as IPPs. Montaup and EUA Power may face increased ccrpetition, primarily based on price, from QFs and IPPs in the future. Montaup could be affected by such ccupetition to supply generation to its custmers, while EUA Power is ccameting u as it with other New England and New York utilities and with QFs and IPPs attempts to market its wholesale power to other electric utilities. Because both units of OSP are fully subscribed for the life of the units, there is no ccnpetition issue present. All of the transmission facilities within the EUA System are inter-connected with the NEPOOL transmission grid. EUA Pcuer, Montaup and the Retail Subsidiaries are rmbers of NEPOOL, which is open to all investor-owned, runicipal and cooperative electric utilities in Ncv England that are connected to the New England power grid. NEPOOL provides for coordinated planning of future facilities as well as operation of nearly 100% of the existing generating capacity in New England and of related transmission facilities essentially as if they were one systs. Le NEPOOL agrement imposes obligations concerning generating capacity reserve and the right to use major transmission lines, and provides for central dispatch of the generating capacity of NEP00L's members with the objective of achieving economical use of the region's facilities. Pursuant to the NEP00L agreement, interchange sales to NEP00L are made at a price approximately equal to the fuel cost for generation without contribution to the support of fixed charges. He capacity responsibilities of Montaup and the Retail Subsidiaries under -the NEP00L 2

~ agreement are based on an allocated share of a New Fr. gland capacity requirerent which is detemined for each period cn the basis of certain regional reliability criteria. Because of its participation in NEPOOL, the EUA System's 1 operating revenues and costs are affected to some extent by the cperations of other nembers. As or Decenber 31, 1991, the EUA System had 1.363 regular employees. Falations with enployees are considered to be satisfactory. Labcn bargaining unit contracts covering certain employees of Eastem Edison in the Fall River area, of Newport and of Montaup expire in June 1993, September 1993 and March 1996, respectively. Construction and Enerev Felated Investnents The EUA System's construction expenditures (including AFUDC of approx-inntely $2.5 million and excluding EUA Power) for the year ended December 31, 1991 were approxim tely $54.2 million. Planned construction expenditures (excluding EUA Power) for 1992, 1993 and 1994, as set forth below, are estfrated to total $145.5 million (including AFUDC of approximtely $5.3 million and estimted environmental experditures and nuclear fuel costs where applicable). EUA SYSTEM (DNSTRUCTION PROGF#1 (Thousands of Dollars) 1992 1993 1994 3-Yr. Total l Generation S 9,054 $ 5,998 S 7,982 S 23,034 1 Transmission 2,584 2,744 2,141 7,469 Distribution 16,415 15,788 16,195 48,398 General 2,850 2,943 3,025 8,818 Total Utility 30,903 27,473 29,343 87,719 EUA Cogenex 11,461 22,652 23,652 57,765 i Total 542.364 550.125 552.995 5145.434 Investments in energy related facilities in 1991, primarily these of EUA Ocean State and EUA Cogenex, arounted to approximately $45.7 million. Energy related investments of EUA Cogenex for the years 1992 through 1994 are estimated to be $34.5 million, S20.0 million and $19.0 million, respectively. EUA Ocean State does not anticipate any significant investments over such period. EUA Powr's estimated cash construction expenditures (including nuclear fuel of $11.4 million) for the period 1992 to 1994 totalling approximately $18.8 million are excluded from the table above. Fuel for Generation For 1991, the EUA System's sources of energy, by fuel type, were as follows: 31% nuclear, 27% oil, 21% cc,al,17% gas and 41 other. During 1991, l Montaup had an average inventory of 89,208 tons of coal for its steam generating units at the Somerset station, the equivalent of 63 days' supply 3

-(based on average daily output at 80! capacity factor for the coal units (see It m 2. PROPERTIES -- Pcwr Supp1v)). The cost of coal averaged about $48.11 per ton in 1991 which is equivalent to oil at $11.66 per barrel. tbntaup has entered into a coal supply contract which will provide 100% of its requirerents through mid-1992 and.is currently investigating coal supply options beyond that point. Since the conrencement of ccal-buming at its Somerset units in mid-1983, Montaup's average inventory of fuel oil has been reduced. Canal Electric Cmpany, on behalf of itself, Fbntaup and others has con-tracts with a supplier for up to 100% of the fuel-oil requirements of Canal Unit Nos. I and 2 for the period ending June 30, 1993. The contract pemits limited purchases of fuel oil in the spot market. M'ntaup's costs of fossil and nuclear fuels for the years 1989 through 1991, together with the weighted average cost of all fuels, are set forth below: Mills per kwh 1989 1990 1991 Nuclear 7.6 8.3 8.7 Coal 20.1 21.2 21.4 Oil 24.7 26.3 18.9 Gas

30.6 16.2 All fuels.....

18.8 18.4 15.7

Provided less than II of system requirements prior to 1990.

The rate schedules of Montaup and the Retail Subsidiaries are designed to pass on to customers the increases and decreases in fuel costs and the cost of purchased pcuer, subject to review and approval by appropriate regulatory authorities (see Rates below). The _ owners (or lead participants) of the nuclear units in which the EUA System has an interest have made, or expect to make, various arrangements for the acquisition of uranium concentrate, the conversion, enrichnent, fabrication and utilization of nuclear fuel and the disposition of that fuel after use. The owers and lead participants of thited States nuclear units have entered into centracts with the thited States Depart:nent of Energy (DOE) for disposal of spent nuclear fuel in accordance with the NWPA. This act requires (subject to various contingencies) that the federal goverment design,

license, construct and operate - a permanent repository for high level radioactive wastes and spent nuclear fuel and establish prescribed fees for the disposal of such wastes and fuel.

Objections on environrental and other grounds have been asserted against proposals for storage as well as disposal of cpent nuclear fuel. The DOE anticipates that a permanent disposal site for spent fuel will be ready -to accept fuel for storage or disposal on or before 2010. Montaup owns a 4.011 interest in Millstone Unit 3 and a 2.9% interest in Seabrook Unit 1 and EU% Power owns a 12.1% interest in Seabrook Unit 1. Millstone Lhit 3 has sufficient on-site storage facilities to accamodate high-level wastes and spent fuel for the projected life of the unit. No additional storage expenditures are projected for the foreseeable future. At the Seabrook Project there is on-site storage capacity which, with minimal capital expenditures, should be sufficient for twenty years or until the year 2010. No near-tem i 4 i

~ capital. expenditures are anticipated to deal with any increase in storage requirements after 2010. Nuclear Pcuer Issues General: Nuclear generating facilities, including those in service in which Montaup participates, as shan in the table under Itm 2. PROPERTIES -- Pcwr Supply, are subject to extensive regulation by the NRC. The NRC is eqwered to authorize the citing, construction and operation of nuclear reactors after consideration of public health, safety, environmntal and anti-trust mtters (see Yankee Atanic below). The NRC has prcmulgated numerous requirements affecting safety systems. fire protection, emergency response planning and notificatir systems, and other aspects of nuclear plant constmetion, equipmnt and oparation. Some of the nuclear units in which the EUA System has an ir cerest have mde modifications to comply with these requirements. tbntaup has been affected, to the extent of its proportionate share, by the costs of such modifications to units in which it has an interest. Nucles units in the United States have been subject to widespread criticism and opposition. Some nuclear projects have been cancelled following . substantial construction delays and cost overruns as the result of licensing problers, unanticipated constmetion defects and other difficulties. Various groups have by - litigation, legislation and participation in administrative proceedings sought to prohibit the ccupletion and operation of nuclear units and the disposal of nuclear waste. In the event of cancellation or shutdown of any unit, NRC regulations require that it be completely decontaminated of any residual radioactivity. The cost of such deccmnissioning, depending on the circumstances, could substantially exceed the owners' investnent at the time of cancellation. The continuing public controversy concerning nuclear power could also affect the operating units in which the EUA System has an interest. While management cannot predict the ultimate effect of such controversy, it is possible that it could result in the premature shutdown of one or more of the units (see Yankee Atomic below). The Price-Anderson Act provides, among other things, that the liability frcm a nuclear incident would not exceed an amount which for damages resulting $7.6 billion. at present is about Under the Price-Anderson Act, prior to operation of a nuclear reactor, the licensee is required to insure against this exposure by purchasing the maxinum amount of liability insurance available from private sources (currently $200,000,000) and to maintain the insurance available under a mandatory industry-wide retrospective rating program. Should an individual licensee's liability for an incident exceed $200,000,000, the-difference between such liability and the overall maxinum liability, currently about $7.6 billion, will be made up by the retrospective rating program. Under such a program, each owner of an operating nuclear facility may be assessed a retrospective prenium of up to a Ifmit of $66,200,000 (which shall be adjusted for inflation at least every five years) for each reactor owned in the event of i any one nuclear incident occurring at any reactor in the United States, with provision for payment of such assessment to be made over tire as necessary to 5 l-

linit the pavrent in any one year to no note than $10,000,000 per reactor cw ed. With recpect to operating nuclear facilities of which it is a part owner or_ frca shich it contracts (on terms reflecting such liability) to purchase per,.Mentaup and EUA Power would each be obligated to pay their propertionate share of any such assessment, i Joint owners of nuclear projects are also subject to the risk tha; nne of their ntrber may be unable or unwilling to finance its share of the project's costs, thus jeopardizing continuation of the project. On February 28, 1991, EUA Pcwr, a 12.13% amer of the Seabrook Project, filed for protection under Chapter 11 of the Federal Bankmptcy Code. (See EUA Powr Corporation belev for further discussion). On May 6,1991, New Farpshire Electric Cooperative, Inc., a 2.21 cuner of the Seabrook Project, announced that it had filed for Chapter 11 bankruptcy protection. A reorganization plan, filed by the New Fmpshire Electric Cooperative with the Banknntcy Court in Septecher,1991 and revised on January 14, 1992 was approved by ti.e Bankmptcy Court in March 1992 and awaits the approval of the NHPUC. EUA camot predict the outccee or effects of these bank vptcy proceedings. Ncomissioning: Each of the three operating nuclear generating ccrpanies in which Montaup has an equity ownership 1nterest (see 1taa 2. PROPERTIES -- Power Supplv) has developed its estimate ci the cost of deccrmissioning its unit and has received the approval of FERC to include charges for the estimated costs of deccmnis-sioning its unit in the cost of energy which it sells. Frcm time to time, these ccrupanies re-estinate the cost of decomissioning and apply to FEP.C for increased rates in response to increased decwmissioning costs. Maine Yankee has filed a deccmnissioning financing plan under a Maine statute which requires the establishment of a deccarissioning tmst fund. That statute also provides that if the trust has insufficient funds to deccanission the plant, the licensee (Maine Yankee) is responsibic for the deficiency and, if the licensee is unable to provide the entire arount, the " owners" of the licensee are jointly and severally responsible for the remainder. The definition of " owner" under the statute includes Montaup and may include campanies affiliated with Montaup. The applicability and effect of this statute cannot be detennined at this time. Montaup muld seek to recover through its rates any payments that might be required. Yankee Arcxtic: Yankee Atcxtic anncenced on Febmary 26, 1992 that Yankee Atcxnic will pemanently cease power operation of the Yankee Nuclear Power Station in Rowe, Massachusetts and will prepare for an orderly deccmnissioning of the facility. Yankee Atcznic cited econcmics and regulatory uncertainty as the key factors in the decision to close the generating plant eight years prior to the expiration of its operating license. Yankee Atomic had operated the plant successfully for more than 30 years. Montaup has a 7.8 MW entitlenent from the plant and has a 4.5% equity ownership in Yankee Atcmic with a book value of approximately 31.0 million at Decarber 31, 1991. The plant shutdown should not negatively impact earnings of EUA becausa Montaup expects to recover its investment in addition to on-going costs, including deccunissicning, through rates. 6

-. ~. Seabrook thit 1 Licensing: The last of the Seabr'ok thit 1 licensing issues, an appeal to the NRC of a decision -.of the Atcmic Safety and Licensing Board finding that adequate f provision had been made for sheltering persons 20 might be on the beach. at the tim of an incident, was still pending at Decerrber 31, 1991. EUA believes the operating license will not be pemanently adversely affected and that Seabrook Lhit I will continue to be licensed to operate at full power. Seabrook thit 2: Montaup also hav 2.9% omership interest in Seabrook Unit 2. On tbvmber 6,1986, the joint owners of the Seabrook Project, recognizing that Seabrcok Unit 2 had been cancelled in 1984, voted to dispose of Seabrook thit 2. Plans regarditg disposition of Seabrcok Unit 2 are now under consideration, but have not been finalized and approved. Montaup is unable, therefore, to estimate the costs for Wich it would be responsible in connection with the disposition of Seabrook Unit 2. Monthly charges are required to be paid by Mentaup with respect to Seabrcok Unit 2 in order to preserve and protect its ccrponents and varicos warranties. Montaup is currently recovering its investant in Seabrook thit 2 under a FERC approved rate case settlment. At Decmber 31, 1991, Montaup's unamortized investant in Seabrook thit 2 was $2.5 million. EUA Power Corporation

Background:

EUA Powr was organized solely for the purpose of acquiring its 12.1% nwnership interest in the Seabrook Project located in Seabrook, New Rrpshire and selling in the @olesale market -its share of the electricity generated by Seabrook thit 1. On August 19, 1990, Seabrook Unit 1 ccurenced ccumercial operation. At Decenber 31, 1991, EUA Power's net investment in Seabrcok thit 1, including nuclear fuel and after the provision for the estimated loss on its Seabrook thit 1 investment, was approximately S330.1 million. On February 28, 1991, EUA Power filed a voluntary metition in the Bankruptcy Court for protection under Chapter 11 of the Federal BarJcruptcy Code because the cash generated by the short-tem sale of electricity from its entitlement in Seabrook Unit I was insufficient to pay interest on its outstanding -Secured Notes when interest became due on May 15, 1991 and the prospects for signing long-tem power sales contracts prior to that date wre minimal. Subsequently, EUA wrote-off its entire investment in EUA Power and established certain reserves for contingencies relating to EUA Pcuer. EUA also deconsolidated EUA Power for financial reporting purposes effective Decmber 31, 1990. EUA Power -is now operating its business as - a debtor-in-possession under protection of the Bankruptcy Court and will endeavor to develop or plan of reorganization which would be acceptable to all parties support a (although mrnagement of EUA Power cannot predict the. timing or likelihood of l developing such a plan). On July 2,1991, the Bankruptcy Court tent _inated EUA l Power's exclusivity period with respect to filing a plan of reorganization. The Bondholders Ccumittee has indicated that it may file a plan of reorganization W ich would convert the Secured Notes into all, or substantially i all, of the equity of EUA Pcuer. EUA carnot predict whether such a plan, if l filed, would be confimed by the Bankruptcy Court, t 7

l l While operating as a debtor-in-possessicn, EUA Powr intends to continue its narketing efforts which have consisted of both direct negotiations with utilities and participation in utility spcnsored supply bidding processes. Ib wver, the.econmde conditions in the Northeast, the availability of competing long'-tem pcwr supplies and bidding requirements for powr contracts being implemented by various state utility cctmissions, are adversely affecting EUA Pcwr's ability to enter into long-tem pcwr sales contracts. predict when, if ever, it will be able to Consequently, EUA Power is unable 3 obtain a long-tem pcur sales contract. EUA Pcwr currently has outstanding $279,597,200 of Secured Notes which are collateralized by its 12.1% cunership interest in Seabrook Units 1 and 2. No interest has been paid cr the Secured tbtes since tbvmber 15, 1990. EUA Power also has utstanding 180,000 Contingent Interest Certifi utes (Cics) evidencing the right to receive additional payments contingent upcn and measured by EUA Pcur's inccme in certain years folicving the carreial operation of Seabrook Unit 1. Such Secured ?btes and CICs are sclely the obligation of EUA Pcuer and are not guaranteed by EUA or any other person. On December 13, 1991, S21,000,000 of Solid Waste Disposal Facility Revenue Bonds, issued by the - Industrial Developmt Authority of the State of New Hampshi-en behalf of EUA Pcwr, were subject to a mandatory redmption. Under t. tems of a guarantee, issued by EUA in favor of the bank pursuant to a letter of credit and reinbursent agreement supporting the issuance of the bonds, EUA paid approxirately SL,000,000 to the bank which issued the letter of credit. EUA Power has no employees. Since EUA Power's orgmization, EUA Service has provided, or arranged for, various management and professional services. In February 1992, the Bankruptcy Court authorized EUA Power to enter into a 1992 service contract with EUA Service stich provides E% Power with various management and professional services. Tae 1992 service contract may be teminated by either party on 30 days notice. On May 30,1991 the Bondholders Cmmittee filed a preference suit against EUA. See Item 3. LEGAL PROCEEDINGS -- Other Proceedings. In June 1991 New Hmpshire inposed a Nuclear Station Property Tax applicable only to the Seabrook Projet.t. EUA Pcwr and the other Seabrook Joint Owners believe that the tax is constitutionally invalid. In October 1991 the Attorneys General of Connecticut, Massachusetts anc Rhode Island petitioned the United States Supreme Court in an original jurisdiction case for a deter-mination of the legality of the tax, and in Jamary 1992 the Suprme Court agreed to take the case. EUA Pcur's 1991 asse:sment was approximately $1.4 million. In September 1991, EUA Pcuer paid approximately 50% of that amunt and, subsequently, refused to pay an additional installment which became due on December 15, 1991. In February 1992, the New Hanpshire Attorney General infomed EUA Power that the New Hampshire Department of Revenue Administration would ccxmence litigation against EUA Power in the Bankruptcy Court to collect the tax if EUA Power did not pay the overdue installment by March 9,1992. EUA Powr did not aake such payments and does not intend to make any future installments until the legality of the tax is detemined. 8 i

_.~ EUA Pcwr Liquidity: EUA Pcuer intends, with the approval of the Bankruptcy Court and to the extent its cash ficw pemits, to continue enking pavernts of its obligations under the Seabrook Joint Omership Agreement (JOA). EUA Pomr is required under the JCA to pav its share of Seabrcok thit 1 and Seabrcok Unit ' expenditures includirig, - withcut limitation, operations and mintenance expenses, construction and nuclewr ruel expenaitt es and deccertissioning costs, regardless of the level of Seabrook Unit 1% operations. Under certain circumstances, a failure by EUA Pcuer to mke its monthly paynents under the JOA could adversely affect its entitlemnt in SeabrooP Unit 1. Because of current market conditions EUA Power's short-tem power sales have been nade at prices belcw cash costs. On August 29, 1991 the Bankruptcy Court signed a Stipulatien and Consent Order with respect to debtor-in-xssession financing (DIP Financing) to be provided by certain joint ewners of Seabrcok for the benefit of EUA Pomr. The DIP Financing was entered into by EUA Pcwr, Connecticut Light and Powr Cmpany and United Illuminating (the Participating Joint Owners), and the Bondholders Comittee. The DIP Financing has been approved by the NHPUC and the SEC under the 1935 Act. 4 Under the terms of the DIP Financing, the Participating Joint Owners have agreed to make monthly Advances to the Seabrook Project disbursing agent for the benefit of EUA Pcuer in an aggregate amount net to exceed $15,000,000 outstanding at any one time to cover EUA Pcuer's share of certain Seabrcok Project related expenses, as needed, to the extent such expenses are not covered by EUA Power's revenues from energy or capacity sales. The advances will bear interest at the prime rate of the First National Bank of Boston plus 7% and are repayable in full in August 1992, subject to extension. The DIP Financing provides a priority lien on all of EUA Power's assets for the benefit of the Participating Joint Owners over substantially all other claims against EUA Pcuer including those of the Series B and Series C Secured Noteholders. The DIP Financing further provides, that in the event of default on repayment of the principal or interest on the mnthly advances, the Participating Joint Owners my purchase EUA Powr's Seabrook Project interest for 75% of the lesser of fair market value or bcek value, and my apply all or part of amounts owed under the DIP Financing against the purchase price. As of March 20, 1992, EUA Power's outstanding unpaid debt was $9.4 million under the DIP Financing. At current prices EUA Pcur's revenues from the sale of electricity are below its cash requiremnt. If this trend continues, short-tem power sales will not provide sufficient revenues to repay advances on the maturity date. In its filing with the SEC in connection with the DIP Financinr, EUA Pomr indicated that funds for repayment of the advances may be provided from all or any of the following: (i) revenues derived frm future sales of capacity or energy to the extent such revenues exceed then current conthly costs; (ii) proceeds frce the liquidation or sale of the assets of EUA Pcver pursuant to an order from the Bankruptcy Ccurti (iii) subject to the appropriate regulatory approvals, furth'r debtor-in-possession financing; and, (iv) pursuant to a plan or reorganization approved by the Bankruptcy Court. Frcm time to time, EUA Power has reduced the advances with funds generated frmi sales of its Seabrook entitlement. l 9 I ,,, +

EUA Power cannot predict whether it will be able to enter into contracts for the sale of its share of Seabrook Unit 1 capacity or energy prior to the maturity date, if at all,'at prices to cover its cash costs and provide for repayment l of advances or whether altemative debtor-in-possession financing can be ar*anged to repay advances ender the DIP Financing. Seabrook thit 2: EUA Pcver also has a 12.1% omership intereat in Seabrook Unit 2. On November 6, 1986, the joint cuners of Seabrcok Project, recognizirs that Seabrook Unit 2 had been cancelled in 1984, voted to dispose of Seabrook thit 2. Plans regarding disposition of Seabrook Unit 2 are now under consideration, but have not been finalized and approved. EUA Pcuer is unable, therefore, to estinate the costs for which it would be responsible in connection with the disposition of Seabrook Unit 2. Pcothly charges are required to be paid by EUA Power with respect to Seabrook Unit 2 in order to preserve and protect its ccuponents and various warranties. Decccmisr.icning Fund: 'Ihe agreements of purchase and sale under which EUA Power purchased its Seabrook interest, required EUA Power to establish a fund of $10 million to secure payment of part of its share of deccmnissioning costs of Seabrook Unit 1. thder an agreement entered into among EUA Power, a bank and the other joint owners of Seabrook, one mthod of securing release of the fund was for EUA to issue a written guarantee of EUA Pcser's deccumissioning costs. In May 1990, EUA guaranteed this obligation and obtained a letter of credit supporting the guarantee, and the entire fund was released to EUA Power. EUA has not provided a reserve for this guarantee because management believes that it is unlikely that such anuunts will ever be paid. Public Utility Regulation Eastern Edison and Mcntaup are subject to regulation by the MDPU with respect to the issuance of securities, the form of accounts, and in the case of (- Eastern Edison, rates to be charged, services to-be provided and other matters. Blackstone and Newport are subject to regulation in numerous respects by the RIPUC and the RIDFUC, including matters pertaining to financing, sales and transfers of utility properties, accounting, rates an service. EUA Power is subject to regulation by the-NHPUC in many respects including the issuance of securities, contracts with affiliates, forms of accounts, transfers of l utility properties and other matters but excluding the rates charged for sales of electricity at stolesale. In addition, by reason of its cunership of fractional interests in certain facilities located in other states, Montaup is subject to limited regulation in those states. l L QFs, including those in which EUA Cogenex may have an interest, uust satisfy the regulatory requirements of PURPA and are exmpt frca most state and federal laws - regulating power generation. IPPs, including OSP in which EUA -Ocean State has a 29.9% ownership interest, do not benefit frcun the PUPPA exemptions and may be subject to FERC regulation under the Federal Power Act as well as various other federal, state and local regulations. The EUA System is subject to the jurisdiction of the SEC under the 1935 -Act by virtue of which the SEC has certain pcsers of regulation, including 10 a

[, jurisdiction over the issuance of securities, changes in the tems of outstanding securities, acquisition or sale of securities or utility assets or other interests in any business, interempany loans and other interccupany transactions, paynent of dividends under certain circumstances, and related matters. Eastem Edison, insofar as it may be deered to be a holding cenpany under the 1935 Act by reason of its ownership of securities of Montaup, has been exarpted frcni registering as a holding cmpany by ecnplying with the applicable rules thereunder. See Rates with respect to regulation of rates charged to customers. See Enviromentat Regulation. See Fuel for Generation with respect to the dieposal of spent nuclear fuel. See Environmental Regulation of Nuclear Plants and see Nuclear Powr Issues with respect to regulation of nuclear fac!'ities by the NRC. See also National Energy Poliev. The Retail Subsidiaries,- Montaup, and EUA Power are also subl >. to the jurisdiction of FERC nder Parts II and III of the Federal Pcuer. set. That jurisdiction includes, among other thmgs, rates for sales for resale, intercon-nection of certain facilities, accounts, service, and property records. Rates Rates charged by bbataup (which sells power only for resale) are subject to the jurisdiction of FERC. The rates for services rendered by the Retail Subsidiaries for the most part are subject to approval by and are on file with the MDPU in the case-. of Eastern Edison and with the RIPUC in the case of Blackstene and Newport. For the twelve months ended December 31, 1991, 681 of EUA's consolidated revenues were subject to the jurisdiction of FERC, 12% to that of the MDFU and.15% to that of the RIPUC. OSP is also subject to the jurisdiction of the FERC. Both OSP units are fully subscribed and all OSP thit I contracts have previousiv been approved by FERC. OSP thit 2 is billing its wholesale customers at fil'ed rates on a subject to refund basis pending final FERC approval. EUA Pcwer's rates are also subject to the jurisdiction of FERC. 11

F-L Recent general rate increases for dbntaup and the Petail Sul -4 diaries are as folicvs (dollars in thousands): Applied For Imp 1mented (1) Effective (2) Return on Annual Annual Annual Cctmon Revenue Date Revenue Date Revenue Date Equit,y -Federal- - tbntaup M-12 20,500 03/05/90 20,500 08/19/90 20,000 01/23/91(3) 12.00 M-13 10,500 03/06/91 10,500 05/07/91 8,100 12/03/91 11.72 2 Massachusetts - Eastern Edison MDPU 100 11,876 06/14/88 7,500 01/13/89 12.50(4) Fhede Island - Blackstone RIPUC - 1946 4,912 11/17/89 3.600 06/01/90 12.40 -RIFUC - 2016 5,140 6/17/91(5) 2,999 03/16/92(6) 11.43 - Newport .RIFUC 2036 7,344 12/27/91(7) Notes: (1) tbntaup's rate increases were implemented on a subject to refund basis. (2) Per final order or settlcsnent agreement. (3) Still pending is Phase II which deals with the Seabrook Project pm dency issues (see FERC Proceer r belcw). (4) Rate used for AFUDC calculation prposes. Settlement contains no specific finding on allowed carmen equity return. (5) Reduced frce $6,027,000 as originally filed. (6) The new rate to-be applied to meter readings taken thirty days after the date of the order. (7)- Assuming full suspension period, decision expected in Septaber,1992. FERC Proceedirgs: On March 5,

1990, Montaup filed its M-12 request based on a

forward-looking test year beginning May 1,1990. The requested arnual increase of $20,500,000 primarily reflected the increased operation and maintenance expenses and full rste base treattrent of Seabrook Unit 1. 'Ihe application included a request to add approximately $124,389,000 of Seabrook Unit 1 constmetion ' costs to Montaup's - rate base in addition to the S74,571,000 of Seabrook thit 1 construction work in progrecs previously allowed in rate base. 'Ihe annual increase also included $7,000,000 for the implementation of consenation and load management programs in the service territories of Montaup's affiliated cmpanies. On April 25, 1990, FERC authorized the implementation of the rate increase, subject to refund, effective with the camercial operation of Seabrook Unit '. On May 22, 1990 a FERC achinistrative 12

law judge _ issued an order to separate the M-12 request into em phaces. Phase I was to address all cost of service issues other than Seabrook Unit 1 prudency concerns, and Phase II would address the Seabrook Unit 1 prudency issues. On August 19, 1990, cmmercial operation of Seabrook Unit I was declared and the M-12 rate was made effective, subject 'to refund. On October 22, 1990, Ebntaup filed a sett1 ment agrement with FERC with respect to Phase I, reducing the original filed rate by $500,000. The Phase I settlerent agrement was approved by the FERC on January 23, 1991. On Decmber 6, 1991, the FERC administrative law judge presiding over Phase II of Montaup's M-12 rate case proceeding issued an initial decision finding that Montaup had beer. prudent in its oversight of its Seabrook Unit 1 investment with respect to energency planning and reemmended no prudency disallowance. Exceptions to the initial decision have been filed by the intervening parties. A final decision with respect to Phase II is expected to be issued by FERC in 1992. Montaup is recovering its investment in seabrook I Unit 1 through rates, subject to refund. On December 3,1991, FERC approved a settlemnt agreement betwen Fbntaup and the interveners in Montaup's March 1991 wholesale rate increase request (M-13). Montaup had filed for an annual increase of S10.5 miUion and FERC allowed implementation of the new rate cmmencing May 7, 1901 subject to refund pending final adjudication. The approved sett1 ment agreement called for an annual increase of S8.1 million. Montaup refunded the difference collecied to its wholesale electric utility customers in Decerber 1991 billings. After the acquisition of Newport, Montaup and Newport had Ltstituted a 90/10 allocation of the energy savings which the two ccrpanies realize through their treatment as a single entity in NEP00L in recognition of the difference in the size of each cmpany. On December 20, 1991, after discussions with the staff of FERC and in cmpliance with their position, Montaup and Ney,rt filed with FERC an application to have a proposed 50/50 allocation of their energy savings ' approved. Protests and mtions to intervene opposing the filing and seeking' a larger allocation of the savings to Montaup were filed with the FERC in January 1992 by the HDPU, the Attorney General of Massachusetts and Montaup's-non-affiliated customers. FERC has not yet acted upon the filing. s realized, estimated If FERC approves the 50/50 allocation method, the saving'ted S1.4 million through December 1991, will be shif to Newport, and at Montaup's customers will ultirately bear the cost of that shift. Massachusetts Proceedings: On Dececber 30, 1988, the MDFU issued its order in response to an $11,876,000 rate increase request of Eastern Edison. Tne S7,500,000 rate filed relief granted represented 63% of Eastern Edison's initial rate request in June of 1988 and based on a 1987 test year. The new rates filed in .ccepliance with the order became effective for sales subsequent to January 13, 1989. In authorizing the increase, the MDPU accepted a settlement proposal offered jointly by Eastern Edison and the Massachusetts Attorney General, the sole intervenor. The sett1 ment stipulated the total revenue requirement while disclaiming any comment on the merits of specific adjustments underlying the total increase recpested. The settlement also specified the depreciation rate and the comon equity ccuponc.t of AFUDC. The cmposite rate for the 13

depreciation calculation is ncw 4.071, up slightly frm the 4.05! previously authorized. Solely for the purpose of calculating AFUDC, the corron equity retum ecmponent-is set at 12.5%. Eastern FAison's last allowed retum on cctnen equity was 15.25I established in a 1984 MDPU order. Rhode Island Proceedings: - On Novmber 17, 1989, Blackstone filed a request with the RIPUC f' an annual increase in revenues of $4,912,000. Be RIFUC issued its order on June rate relief of $3,600,000 annually, which was 731 of 4, 1990 panting Blackstene s initial rate request. In authorizing the increase, the RIPUC accepted a conditional offer of settlement offered jointly by Blackstone and the RIDPUC. Le settlemnt stipelated the total revenue requirement wi.thout ecment on the writs of any issue underlying the total increase requested. he sett1 ment did specify a ecmen equity return of 12.41 inplemntation of revised rates on June 1,1990, acceptance of the Ccupany's depreciation study as reasonable, and a filing require ent to be mde within ninety days after Blackstone refinanced its 14-1/41 Series A First Martgage Bonds. Also Blackstone agreed to various requests for information to be supplied to the RIPUC and the RIDPUC and to a 42% mininun equity ratio by December 31, 1990. Blackstone refinanced its 14-1/41 debt in Novmber 1990 and made the required filing with the RIPUC in February 1991. his filing had no inpact upon the settled revenue increase. In addition, at Decenber 31, 1990, Blackstone's ccman equity ratio exceeded the udnirun required by the sett1 ment. On June 17, 1991, Blackstone filed with the RIPUC a request for increased annual revenues of approxinately $6 million or 5.01. Subsequently, Blackstone reduced this request to S5.1 million or 4.21. On March 16, 1992 the RIPUC issued its order granting Blackstone rate relief of S3.0 million or 58 percent of the requested amount. The order included an allowed return on ccrron equity of 11.34I. On December 27, 1991 Newport filed an application with the RIPUC for a total rate increase of $7.3 million, to take effect in two steps. Phase I would increase annual revenues by S6.1 million and is related to increases in Newport's cost of service and a decline in kW sales. -In Phase II, Newport proposed to increase rates by an additional $1.2 million, to take effect in January 1993, den Newport is required to adopt Financial Accounting-Standards Board's Statement of Financial Accounting St'ndards No. 106, " Employer's Accounting for Post-retirment Benefits Other than Pensions." A ruling from the RIPUC on Newport's rate case is not anticipated until Septaber 1992 unless Newport is able to reach an earlier negotiated settlement with intervenors. Environmental Regulation General: he Petail Subsidiaries, Montaup and EUA Power and other ccrpanies owning generating units frce dich xwr is obtained are subject, like other electric utilities, to standards adanistered by federal, state and local authorities with respect to the siting of facilities and associated environmental factors. QFs and IPPs in sich the EUA Systm may have an interest are also subject to environmental and land use regulations at the federal, state and local levels. 14

Le EPA, and certain state and local authorities, have jurisdiction over releases of pollutants, contaminants and hazardous substances into the environmnt and have broad authority in connection therewith including the ability to require installation of pollutien control devices and rewdial actions. Both federal and Massachusetts legislation require consideration of reports evaluating environmntal inpact as a prerequisite to the granting of various pemits and licenses, with a view to minimizing such inpact. Federal and Massachusetts air quality regulations also require that plans (including procedures for operation and mintenance) for construction or mdification of fossil fuel generating facil' ties receive prior approval from the DEP. In

addition, in mssachusetts,

certain electric genera

ion and transmission facilities on which construction comerced after April 1976 will be pemitted to be built only if they are consistent with a long-range forecast filed by the utility concerned and approved by the Massachusetts Energy Facilities Siting Council.

In Rhode Island, siting, construction and modification of major electric generating facilities nust be approved by the Rhode Island Energy Facility Siting Board and the Rhode Island Coastal Resource Maagment Council. Montaup, its affiliates and non-affiliates with which it has power supply arrangements are also subject, like other electric utilities, to regulation with regard to zoning, land use and similar centrols by various state and local authorities. Under their continuing jurisdiction, the EPA and state and local authorities may, after appropriate proceedings, require modification of generating facilities for which construction pemits or operating licenses have already been issued, or irpose new conditions on such pemits or licenses, and may require that the operation of a generating unit cease or that its level of operation be tmporarily or permanently reduced. Other activities of the EUA 9ystem fram tire to time are subject to the jurisdiction of various other loc. ~, state and federal regulatory agencies. It is not possible to predict with certainty stat effects the above described statutes and regulations will have on the EUA System. Be Retail Subsidiaries and Montaup expect that ccupliance with applicable environmental regulations will require additional capital expenditures by them during 1992. Such expenditures are not expected to be significant. Some of the generating facilities in which the EUA System companies have an interest, and are required to pay a share of the costs, have encountered and may in the future encounter problems under governmental regulations, particularly those relating to nuclear facilities or to protection of the environnent. Such problems may result in increases in capital costs and operating costs which may be substantial, in delays or cancellation of construction of planned facilities, or in mdification or terrination of - operations of existing facilities. A number of scientific studies in the past several years have examined the possibility of health effects from D4F that are found everywhere there is electricity. While scxne of the studies have indicated some association between exposure to adF and health effects, many of the studies have indicated no direct association. In addition, the research to date has not conclusively established a direct causal relationship betwen D4F exposure and humai 15

health. Additional s tudies, hich are intended to provide _a better w understanding of EMF, are continuirg. Sam states where the EUA System dvs not operate have enacted regulations to limit the strength of magnetic fi<. is at the edge of transmission line rights-of way. legislation has been introduced in the United States Congress -and in the legislatures of Massachusetts and Rhode Island that wold prohibit or limit construction of new lines until nore definite conclusions on potential EMF health effects are reached. Scme proposals provide funding for additimal research. Vanagement cannot detemine at this time shat effect these laws or any new regulaticos, if passed, will have on the EUA Systm's construction program and its reliability. Vanagement continues to monitor the research and has established an internal EMF task force to provide guidance as the issue merges. The EPA has issued regulations relating to the generation, transportation, storage and disposal of certain wastes under the Resource Conservatior and Recovery Act of 1976 (RCRA): in Massachusetts, the requirments are irplemented and enforced by the DEP, whereas in Rhode Island, RIDEN implements and enforces its cvn regulations in this area under a state statute cmparabic to RCRA as wil as pursuant to EPA authorization. There is an extensive body of federal and state statutes governing enviremental narters, including CERCIA, as amnded by Superfund Amendments and Reauthorization Act of 1986 and, at the state level, the Massachusetts Oil end Hazardous Material Release Prevention and Response Act of 1983 shich pennit, among other things, federal and state authorities to initiate legal action providing for liability, ccnpensation, cleanup, and emergency response to the release or threatened release of hazardous substances into the envimand una for the cleanup of inactive hazardous waste disposal sites which constitute suostantial hazards. Under CERCLA, joint and several liability for cleanup costs may be inposed on, anong others. the amers or operators of a facility where hazardous substances wre disposed, the party who generated the substances, or any party who arrcnged fer the disposition or transport of the substances. Due to the nature of the business of EUA's utility subsidiaries, certain materials are generated that may be classified as hazardaus substances under CERCLA. As a mle, the subsidiaries enploy licensed contractors to dispose of such materials. See Its 3. IFAL PROCEEDINGS -- Environmental Proceedings ~. Water Regulation: The et scrive of the Federal Water Pollution Control Act is to restore and maintain the chemical, physical, and biological integrity of the Nation's navigable waters. The elimination of pollutant discharges (including heat) into navigable waters is one goal aimed at achieving this objective. Another step mandated by Federal Water Pollution Control Act was the creation of a rigorous permit program. All water discharge pennits for plants in Massachusetts, including those for the Scraerset and Canal plants, are issued by the DEP under delegated authority frm the EPA. Under the Federal Water Pollution Control Act, the Massachusetts Wetland Protection Act and the Rhode Island Freshwater Wetland Act standards have been established to control the dredging and fillir.g of wetlands. The EPA and the DEP are pursuing a non-degradation (no loss) policy for wetlands. 16

~. - _ I Under the Massachusetts Water Managerent Act, the DEP is responsible fer prcru1 gating regulations relating to water usage and conservation. Most of the generating units frce which Montaup obtains pcuer operate under pemits which limit their effluent discharges into water and Wich require monitoring and, in scme instances, biological studies of the impact of the discharges. Such pemits are issued for a period of not note than five years, at the expiration of which renewal cust be sought. Air Regulation: he EPA has established clean air standards for certain pollutants, including standards limiting emissions frcxn coal-fired and oil-fired generators. Congress passed amendments to the Clean Air Act in 1990 which created new regulatory programs and generally updated and strengthened air pollution control-laws. Rese amendments will expand the regulatorv role of the EPA regarding anissions frctn electric generating facilities. Title IV of the Clean Air Act amendmrts establishes a tw-phased utility power plant pollution control program to reduce missions of sulfur dioxide and oxides of nitrogen. EUA Systm generating facilities will nost probably be first affected in 1995, when EPA regulations will take effect fer facilities owned by the EUA Systm. In Massachusetts and Rhode Island, various requirements of the Clean Air Act amendments are implemented and enforced by the state agencies under delegated authority frcrn the EPA. In Rhode Island, the RTDEM has established cleen ait standards for certain ncr.-criteria pollutants for which no federal standards have been prcrtulgated. The DEP recently issued regulations pursuant to the Massechusetts Acid Deposition Act of 1985. These regulations estrblish a statwide cap en sulfur dioxide emissions and require Montaup's facilities to meet an annual average anission rate of 1.21 pounds of sulfur dioxide per million B'IU of fuel input by the end of 1994. Montaup is essentially required to neet this sulfur dioxide standard by the year 2000 as a result of Title IV of the Clean Air Act anendments: the major effect of the DEP regulations therefore is to require empliance six years earlier. he DEP also has authority for negotiating with representatives of other states and Canadian provinces regarding regiond progrms for the reduction of acid rain. As required by the regulations, Montaup submitted its plan detailing how it would meet the sulfur dioxide standard by substituting leur sulfur fuels and utilizing emissions trading. Montaup already burns coal with 1cw sulfur content at its somerset station. Tests of even lowr-sulfur coal at Montaup's Smerset station indicate it will be able to utilice lower sulfur coal than is already being burned to meet the 1995 air standards with only a minimal capital investnent. Title I of the Clean Air Act amenchents addresses ozone non-attainment. Oxides of nitrogen are one of the precursors of ozone founation. Be anendments required the femation of the Northeast Ozane Transport Ccanission which has jurisdiction from Virginia to Maine, including Massachusetts and Rhode Island. his commission may reccrmend more st" ngent nitrogen oxide l mission controls than mandated under Title IV the Clean Air Act l amendments. At this tire, EUA and Montaup anticipat uterial inwet frcm I the air toxics provisions. EUA and Montaup intenc _ continue to nrnitor 17 l

regulations prctuigated under the Clean Air Act rewbr s to evaluate the inpact on their business and operations. AH dcnestic fossil fuel plents frm which h>ntaup obtains pcver operate under pemits which linit their emissions into the air and require n,nitoring of the emissians. Air quality requirerents adopted by state authorities in Musachusetts pursuant to the Clean Air Act, as mended, impose limitations with respect to pollutarits such as sulfur dioxides, oxides of nitrogen and pa rt iculate tra t te r. K,ntaup Screrset Station currently is pemitted to burn coal which results in sulfur dioxide missions not in excess of 2.42 pounds per million FTU heat release potential (approxirately 1.5% sulfur content coal). Re Canal Station is pemitted to bum fuel oil which roults in sulfur dioxhk inissiers not in excess of 2.42 pounds per million B1U heat release potential (approximtely 2.2% sulfur content fuel oil). We Llean Air Act renchents provide EPA with broad new pemitting authority, with the gnal of having states issue federally enforceable operating pemits which will outline limits and conditions necessary to cmply with all applicable air requirerents. Accordinn ( to the Clean Air Act anenients, each source of sulfur oioxide missions will receive allcwances equal to the tons of sulfur dioxide it is pomitted to mit. If a source reduces its missions beyond those required by law, the extra allevances crn be traded to another source. Re Clean Air Act a~endrent 's pemitting program will be phased in frm now until 1997. %e inpact of these requirerents are not expected to have a caterial irpact on EUA. Environcental Rerulation of tOclear Pcw r he NRC has prmulgated a variety of standards to protect the public frm radiological pollution caused by the nomal operation of ruclear generating facilities. For exmple, the tac requires licensed facilities to develop plans to respond to unexpected developments. In scue environmental areas the IEC and the EPA have overlapping jurisdiction. Bus, NRC regulations are su' ject to all ecoditions inposed by the EPA and a variety of federal unviromental statutes, including obtaining pemits for the discharge of pollutants (includir - heat) into the nation's n navigable waters. In addition, the EPA hn asthhed standards, and is in the process of reviewing existing standards, Nr artcin toxic air pollutants, including radionuclides, unt.er the Clean Air Act which apply to NRC-licensed facilities. he effective date for the new 7 dimuclide stan6ds has been stayed as to nuclear generating units. Ine EPA has also srcculgated enviremental radiation protection standards for nuclear power plants which regulate the doses of radLation received by the general public, he IMPA provides for development by the federal goverrant of facilities for the disposal or penmnent storage of civilian nuclear wasta. For #urther details about tMPA see Fuel for Generation. Le NRC has also prcculgated regulations regarding the disposal of nuclear waste materials designed to protect the public frm radiological dangers. c has Enviromental regulatiu of nuclear facilities in which the EUA an interest or fr m @ ich they purchase power my result in > ptficant increases in capital md operatinf costs, in delays or cancellation of construction of plarmed inprovements, or in modification or temination of existing facilities. 18

tbtional Energy Policy thtional energy legislation, dealing with coal conversion, gas deregulation, energy conservation, energy taxes, non-utility generation and utility rate regulation becam effective in 1978. One portim of this legislation, PURPA, is designed to affect state regulatory policies, expand the wucces of pcwr generatim available to utilities, and bring about extensive changes in rate structures, pricing and cost nethodology. Generic hearings on these and related subjects have been held before the MDPU and the RIPUC, and various requirments have been instituted or changed. Comencing with the late 1980's, FERC issued a series of emoany specific opinions and proposed regulations addressing electric util:.ty industry structure and pricing. These decisions addressed such mtters as mrket based pricing for existing pcuer ?lants owned by utilities, cmpetitive bidding arrengments as a means of allocating powr sales contracts, and opportunity cost pricing for transmission services. . In 1991, President Bush proposed a National Energy Strategy. Irgislation pending in Congress includes proposed revicians to nuclear powr plant licensing under the Atomic Energy Act and holding empany regulation under the 1935 Act. Prowsed regulations and legislation, as well as cases at FERC that: my establish new generation and transmission pricing approaches, my inpact the business of the EUA Systm. It is not possible to predict fully what fucther effects changes in legislation or regulatory policies, and regulations wW.ch have been and may be adopted to impiment such changes, will have on the EUA . Systs, including rates and fuel supply. Item 2. PPDPERTIES Power Supply Pursuant to EUA's acquisition of Iksport, as of April 1,1990, thport's two solely-owned diesel generating units, Jepson in Jamestom, Rhode Island and Eldred in Portsmouth, Rhode Island, began supplying the EUA Systm with 8 W and 8.25 W, respectively. With the exception of these two peaking generating units and !tntaup's two jet fuel turbine generating units referred to in the table below, which are also peaking units, Mmtaup's solely-owned generating units have not been increased since 1959. Montaup's Somerset Units 5 and 6 were converted frcra oil to coal buming in 1983. The EUA. Systm has found it mre econmical to join with other utilities in the joint cunership of large generating units and in icog-term purchase contracts, and to supp1 ment these sources with short-tem purchases as required. EUA believes tha': spreading the EUA Systm's sources of electricity mang a nunber of plants should improve the reliability of its power supply and limit the financial exposure associated with a prolonged generating unit outage. l In addition to its participation in the generating units described under j Item 2 - Properties, Montaup has negotiated a purchased xuer contract with Aquidneck Power Limited Partnership for 85 W of capac:.ty. The proposed facility will be a peaking power unit buming No. 2 fuel oil. l l 19 l l

Montaup is recoverine through rates approxinntely $13 million annually for its conservation and load canagement (C&114) programs. C&1li is designed to (i) decrease existing energy datand and (ii) offset future load grcuth through cmservation incentives thereby minimizing future need for large capital investnent in generating facilities.

Ihe peak EUA Systcm derand experienced to date was 878.6 FM on July 19, 1991.

i i 20

..-.. - -. - -. ~ _ ~ ~- -~ . - - ~ -. ~ - -. 4 (UA til!!N CAPAljtiff ese3.................................G.t.h t.t A l l h G..U.n i f l. t u $.t t y l C.E.. A l.o.f D.I.Ci. mal t 31, 1991.................................... hlutta Ca0$$ mast o caots hit is lilita CL Almt D liittu velf listts $tavlCf least CAPAlltiff SMAtt $A t.t $ ins &t

e. A.f t......UW i f k Ant.......... 8U.I.L..f v P t......Ca t.a /..O.Pi.t A10R..........

...t..........................................d.........av 1 aw nw i e.0C1..O.w..l.t lW I P 1 1951 $>ttlif 5 CCAL MCafAUP (Lftit!C CO. 100.00 68,75 68.75 0.00

68. 75 1959 53nft$ti e COA 4 nomf AUP (LttitlC CD.

100.00 106.84 106.64 0.00 106. lw. 1970 Somittgf Jt att Olt sontAup (LICttlC Co. 100.00 24.00 24.00 0.00 24.00 1971 S0stt$tt J2 Jtt olL Mou1AUP titCitlC Co. 100.00 24.40 24.40 0.00 24.40 1915 PAwfvCati NYD00 atDio SLACalt0ht v&LLif (LEC. 100.00 1.28 1.28 0.00 1.28 1961 JIP50m Oll$tL ht WOA1 (Littt'C CoaP. 100.00 8.00 8.00 0.00 8.00 19rg (Lett0 OltstL htwP0af titCielt CoaP. 100.0V 8.25 8.25 0.00 8.25 SUS 10fAL: 241.52 0,00 241.12 .J0..! W f..O.w..l.t t. u l P 1976 CAkat 2 40.6 OIL CA=AL (Ltttelt comPant 50.00 $84.00 292.00 216.50 75.50 1979 vvmas 4 (van 4) ho.6 Olt CruttAL MAlti P M t Co. 2.63(1) 619.2$ 16.28 0.00 16.28 1* mlLt570ht 3 hvCttaa honistatt utiLillts 4.01 1146.00 45.94 0.00 45.94 > N9 $tA6:0tst huCLEAR NEW pAMPlNltt TAbitt 2.90(2) 11$0,00 3}.}) 0,D0 }} }} 387 '.57 216.50 171.07 $UBf0fAlt t o.u.r.n..C.W..t.t 1 N I P..: .i 1948 Cohn.v&httt hvCLiat C0hv.14hdi AttulC PMt 4.50 59U.00 M.5% 0.00 26.15 19f2 MAlkt YAmstt hvCttAt sulht TAhtti At0Mit Poutt 3.59 860.00 31.61 0.00 31.61 19A1 matf.Y Ahttf(tM ) hvCttaa vaatti ATCPitt ELICitic Co. 4,g0 173.05

7. N 0.U0

1. 79 1

... 70 0.00 11JD 11 1972 vtt o f TAhtti huCLEAR vi. TAhttt butttAa P M R 2.s$ $20.00 $Ut101AL: 77.65 0.00 T1.6% PUR C.H A S.E.D..PO.W.i.t.s see.. 1968 CAh4L 1 ho.6 OIL CANAL ILttfalt COnP&bt 2$.00(3) 572.00 143.00 0.00 143,00 1972 PILGalu 1 NUCLEAR 80510e (Ditos C3nPAuf 11.00(3) 669.20 13.61 0.00 73.61 19M Politt 2 CA5/Olt StAlu18tt EttC.Licui DEPT. 41.67(}) 96.00 40.00 Og 40.00 1975 CLEAnf 9 GAT /Olt f autt0m muult.LIGuilkG 13.64(a) 110.00 15.00 0.w 11.00 1982 $f047 St0 Cut FA h0.2 Cll mall.MuslC. W ottSALE Co. 64.12 85.00 37 10 0.00 37.$0 .MuulC. pott 1Att Co. 44.12 81.00 37.30 0.00 37 $0 1966 $10hv 6 00A 2s Wo.2 OIL mass.Duf IttCitlC POWER 11.24(4) $3.00 8.08 0.00 8.0% Vits 1954 NChtlL WOOD 1979 WTmau 4 ho.6 Cat Cthf A AL MAlmt PMB 0.81(4) 619.25 S.00 0.00 5.00 1972 1Attu 184 4 ho.6 OIL htW ENGLAND POWtt 1.13(4) 443.50 $.00 0.00 $ 00 1974 BaAVTON 4 h0.6 OIL htW thGLA40 POWit 1.13(4) 441.55 S.00 0.00 5.00 1990 CSP 1 GA$ DCE AN $f Af t POWER 28.00(5) 284.00 79.52 0.00 79.52 1991 Osp 2 CAS OctAs staff PWie 28.00(6) 268.00 15.04 0.00 75.04 1991 hta CAS hostatAtt (Wtasi ASSOC 4.62(7) 336.00 28.96 0.00 28.96 tU $ LICE

IVA 1970

$MCW J11.J14 Jtt CIL h04tutAlf Ufitifffs 0.97 195.60 1.90 0.00 1.90 1949 C05 CD4 10 12 Jtt DIL hoef>tAlf Ufitifitt 0.97 71.10 0.69 0.00 0.69 1971 MotivlLLE 6 h0.6 CIL N08thta$f Utillittl 0.86 410.00 3.51 0.00 3.51 1964 MIDDLif Nu 3 h0.6 OlL WotfutAlf UtiLiflis 0.86 240.00 2,06 0.00 2.06 1973 ul00Ltt0Wu 4 ho.6 OIL h04thtAlf U11Lifft$ 0.86 400.00 3.42 0.00 3.42 1960 hoaWAtt >BA 1 40.6 Olt h0AtatAlf UTILlitts 0.86 164.00 1.40 0.00 1.40 1963 hothAtt use 2 h0.6 CIL hostatAlf UflLiffts 0.86 172.00 1.47 0.00 1.47 1970 m!LLtt0ht 1 huCLEAS hottMEAlf UTILifttl 0.65 659.50 4.29 0.00 4.29 1975 Mittsteht 2 huCLEAR h0atetA$1 UTILiftts 0.49 662.00 4.26 0.00 4.26 1986 Mittsf 0ht 3 kuCLEAR hoefMEAlf Utill1845 0.61 1146.00 6.94 0.00 6.94 1972 CfLO G 1 4 PtMPLO NTDA0 WOSINEA$? U11Liftt$ 0.99 1080.00 10.T0 0.00 10.70 Sutf0fAL: 593.85 0.00 593.85 k V C.t o..Q.U.E.B.t.c..t.h i. l f L.t.ut u t. ... 33 0.00 49.33 49 1991 NYDeo outStC I&ll NY000 MG / HEP 004 4.06(6) 1215.00 ............................................ s..s. 01 A. L..:..................... uf TOT AL GaOSS SflitM CAP AIIL ITY (MW) "*""""".." ".*""* 1349.92 Lill belf CONitACT SALT $ (MW) " " " *" " " " " " " " " " " " 216.50 1133 42 .............................................O.T A L..h i.t..S. t $.1 t.M O. AP A 81 L. i f.f.. (.MW T thCtu0tl.67% Caost $tsitu $mAnt NILO 87 htWP0af. 8:0ft1 (1) (2) mohf AuP J0thf OWhit$ntP ShAtt PERCthf AGE il 2.901 WICN 18 thCLLCEO IN EUA $f $ttM CAPA81LITY StPORilhG 10 htPCFA. EUA POWtt C0APORAfl0W JQlWI OWhit$N]P $NARE PtkCthf AGE 15 (QUAL TO 139.52ted of 12.13% WWICH WAS PURCHAsto Wilm Tkt thithf 10 atSELL AhD, thittFORE, hof RETAlat0 AS PAtt Of htPOOL EUA $15f19 CAPAtiLiff. (3)

LIFE OF unita PueCmAst CohitACT.

(4) PuttnastD PCh44 Of htWPoet. (5) Comm!*CI AL '- Stevit! DAf t 12/31/90. MONTAup 18 A POWtt PutCnAste Wlin 221 tuflTLEMthi Aw0 htWroni is a POWtt PURCnA$tt WifM 6% EkflTLEMthi, EUA OCEAN STAft MOLC1 29.9% toulff Istittsf lu OCIAs $fA11 POWER PAtthtt$ NIP. (6) COMMERCIAL lu litVICE DAtt 10/1/91. M0hfAup l$ A POWit PURChA$tt VlfW 22% (WilfLIMthT Aho htWP0Af 18 A PWtt PvtCMAstt Wif N 61 tufl1LEMthf. (UA OCIAN STATE HCLOS 29.9% EQUlf f thittilt is DCLAN STAtt PohEt PAsihtmlMIP. ComtaCI AL IN StevlCE DAf t 9/1$/91. (7) (8) HvDto QUESEC PMAst il fits tuttGY ComitACT DETWild htP00L PAtilCIPAufS AND NYDto outBEC DEGAN 04 T/1/91. 21 I rr-- ,. ~, _,. - _,. ,_r,_.__m.

ti,ntaup's participation in generating units of Wich it is not the sole cuner takes varicus fe m.s including stock cunership, joint ownership and purchase contracts. In rest cases (other than short-term purchased pcser centucts) the purchaser is required to pa" its share (i.e., the sam percer. age as the percentage of their entitlenent to the cutput) of all of the costs of the generating unit (whether or not the generating unit is operating) including fixed costs, operating costs, costs of additional constmetion or redificatie, costs nsociated with condmnation, shutdcun, retirment, or deccanission?.ng of the unit, and certain transmission charges. See Note K of tbtes to Censolidated Financial Statments contained in the Frgistrant's Amual Report to Shareholders for the year ended Deember 31, 1991, ( h hibit 13-1 filed herewith) conceming Montaup's guarantee of its pro rata share of a certain obligation of Maine Yankee. Under its contracts with Paine Yankre, Ccenecticut Yankee Atcmic Pcuer

Cmpany, Venent Yankee Nuclear Pcsvr Corporation, and Yankee Atcmic and, under its agrements relating to Phase II l

of the interconnection with Hydro-Quebec, Montaup my be called upon to prc, vide additional capital and/or other types of direct or indirect financial support. Other Property We EUA Systm owns approxirately 5,100 miles of *ransnission and i - distribution lines and approximtely 110 substat.'ons located in the cities and tcv.s served. In addition to the above, the Retail Subsidiaries, Montaup, and EUA Service also cun several buildings which house distribution, nuintenance or general office personnel. See tbte H of tbres to Consolidated Financial Statments contained in the Registrant's Annual Poport to Shareholders for the year ended Deconber 31,

1991, (Exhibit 13-1 filed herewith) regarding encumbrances.

Item 3. IIGAL PROCEEDItCS Rate Proceeding See descriptions of proceedings under Its 1, BUSINESS -- Pates. Fankruptev Proceeding See descriptions of the Chapter 11 filing of EUA Pcwr under Item 1 BUSINESS -- and -- EUA Pcuer Corporation. Enviremental Proceedings

1. In March 1985, Blackstone was notified by the DEQE, dich is now the DEP, that it had been identified, along with other parties, as a potentially responsible party under Passachusetts law for a condition of soil and ground water contamination in lowell, Passachusetts.

We site in question was occupied by a scrap netal reclamtion facility Wich received transfomers and other electrical equipment frcm utility ccupanies and others from the early 1960s until 1984 Amng the contaminants apparently released at the site wre PCBs. he potentially responsible parties (PRPs), including Blackstone, oerfomed site studies and proposed a rmedial action plan, which was approved ay the DEQE several years ago. Since that tine, the PRPs have negotiated over 22

access, taxes and similar issues with the site cwer and other parties. The reredial option selected but not yet empleted is a process of solidification, however, a risk assessnent ttut any now be required could lead the PRPs to choose capping as the rmedial option. The cost of inpimenting either remdy (which is less than the total costs for parties associated with the site) cculd vary frm $600,000 for solidification to $250,000 for capping. Blackstone is alleged to be the fifth ranked generator out of approximately twenty potentially responsible 3arties. Howver, Blackstone's estimted 2! share allocation is considera>ly less than the shares of ttw four largest contributors at the site. As a result, Blackstone expects to be offered a dmininus party buyout sett1 ment frm the nnjor mnbers of the site PRPs in the near future.

2. Blackstone wn notified by a letter dated ibvmber 21, 1986 from the DFl}E (now the DEP), that the DEP had reascu to believe that earlier in this century Blackstone arranged for the disposal of hazardous materials consisting of coal tar mterials containing a form of cyanide and other substances at tvu sites in Attleboro, Massachusetts.

The description of the mterials indicates that such disposal, if arranged by Blackstone, occurred before Blackstone transferred its gas business to another empany in 1961. The DEP's indennification issues between Blackstone and this other empany have not yet been resolved. The DEP's letter cites Massachusetts statutory law inposing joint and several liability, without fault, for actions resulting in releases of hazardous unterials. Blackstone also received a letter dated' tbvmber 25, 1986, from the office of the Attomey General of Massachusetts, with respect to the same matters, stating that Massachusetts had incurred costs of approx-inntely S2,164,000 in connection with assessmnt and rmoval actions at one of the two sites and that further assessnent at both sites was proceeding. With regard to the first site, Kassachusetts has instituted legal proceedings in the United States District Court in Boston against Blackstene and other parties seeking reimbursment for past and future costs associated with this site. Extensive discovery has been conducted. Until recently, pending before the Court were the parties' cross-motions for sumnry judgment on the issue of whether the substance renoved frm the site was hazardous pursuant to CERCIA. At a hearing on Novmber 20, 1991, the Court denied Blackstone's notion for simary judgment and granted Massachusetts' notion finding the substance to be within the CERCIA definition of " hazardous." The case is now noving into additional phases that will address issues of notice and due process, achinistrative recorde, and the reasonableness and consistency of cleanup costs incurred by Massachusetts, On February 14, 1992, Blackstone filed a Motion for the Cmrunwealth's tbtion for Reconsideration of the Court's opinion grantingity, Blackstone entered into an Partial Sunmary Judgment. While denying liabi. Administrative Consent Order with the DEP in 1987 concerning the second site under which Blackstone has perforved assessnwnts of the site in order to detennine what rmediation, if any, is necessary. Phase II testing results were submitted by Blackstone to the DEP for review and approval reveral years ago, but Blackstone has never recefved a response or DEP authorization to proceed with further studies or remedial actions.

3. Blackstone received a letter dated October 28, 1986 frm the R1DDi stating that there ray have been a release of hazardous mterial at a fonmr coal gasification facility in Pawtucker, Rhode Island, ncv owned in part by Blackstone, which had been found to contain cyanide contaminated waste caterials as well as a large amount of petroletn-contaminated soil due to tanks forrerly located at the site.

Blackstone, stating that it had not assuird any 23 L

I liability, had a fence erected and has cantracted for an assessrrnt of the site. Blackstone has been requested by Valley Gas ccupany (Valley) to indennify Valley against liabilities resulting frcm thin site Blackstcne has not yet responded to Valley's request. Blackstone has undertaken scre twoval of meerials frca the site during 1990, under RIDW approval and surcrvisico. Le RIDW initiated a site investigation at this facility in 1991 shich constitutes the second step in a site screening and assessrrent process established by EPA. Be results of the site investigation will detennine whether the site is a candidate for the Hazard Ranking System.

4. In 1087, Blackstone cleaned up a PCB spill which occurred approximtely 18 years age and was discovered in 1986 at the Davies Vocational School in Lincoln, Rhcs Island.

We C<mpany is negotiating post-closure care at the site and has entered into a consent agrement with the RIDm.

5. !kmtaup and EUA Service have received a tbtice of Responsibility on July 27, 1987 frca the DEP for suspected hazardous sterial at a site owned by Montaup on Hortonville Road in Swansea, Massachusetts.

EUA Service has contracted for and received an envirtwental site assessmnt for the property identifying the previous property owner as the party likely responsible for the deposit of' suspected hazardous waste mterials on the site. Bis assenment has been submitted to the DEP, identifying the previous property cuner.

6. Blackstcoe received a notice frcm the EPA dated July 29, 1988, stating that Blacksteme is potentially liable for the alleged disposal of hazardous waste on a hazardous waste site in tbrth Smithfield, Rhode Island. Le EPA has conducted a reedial investigation and a feasibility study for this site and is seeking participetion in clean-up activities.

Blackstone is attmptint; to detemine whether there is any basis for the liability claind by the EPA. Individually and as a mmber of a group of approximtely ciphty PRPs, l Blackstone has conducted negotiationa with the EPA concerning sett1 ment and concerning the need to grant access and use rights over land cuned by Blackstone that is adjacent to the waste site. In Septmber 1990, hcwver, the EPA served a nunber of parties (not including Blackstone) with unilateral administrative orders to ccupel such parties to carry out remdial activities at the site. Separate sett1 ment negotiations mong Blackstone, the EPA and the parties that are subject to the adninistrative orders resulted in a sett1 ment agrement between Blackstone and certain mjor generators of mterials at the site, effective as of March 1, 1991. he parties (not including the EPA) have indenified Blackstone against liabilities and acticns l associated with the site in return for a sett1 ment payment and Blackstone's I agrement to convey to the parties an easment and access agrement over land i adjacent to the site to facilitate site rmediation. Negotiations between Blackstone and those parties over certain tems of the easemnt and access agreemnt are continuing.

7. In February 1988, Blackstone was notified by the RIDW that it was the apparent owner of property located in Lincoln, Rhode Island, which property was on the EPA's list of potential hazardous waste sites.

In October 1990, Blackstone petitioned the RIDW to have this property delisted. Testing has j shcun that Blackstone's parcel is not contaminated, nor is Blackstone l responsible for any other parcel within the site. EPA notified Blackstone on June 25, 1991 that Blackstone's parcel was one of eleven that would not be delisted due to lack of information about the site. Blackstone believes that 24

i l i the parc+l will be deP ated in the ini'fal phase 01 the site accure nt process. i 8. During Kirch-April

1990, Eastom Edisen conducted a

limited f its Dupont enviremental investigati m Okse I study) of a port im o Substation in Brockton, MA. Ibring the investication, Eastem Edism notified the DEP that it had encountered oils and PCBs. On Hay 3, 1090, the DEP notified Eastern Edison of its liability for releases of oil and/or hazardour mterials at the site, and requested a ' copy of the Phase 1 study. Pollwinr its review of the Phase I study on January 23, 1991, the DEP issued a Notice of Cmprehensive Site Responsibility to Eastem Edison requiring a Phase II Investigatier.. Q1 February 12, 1991, Eastem Edison notif!ed DEP that it will i perfom the Phase 11 and continue to work with the DEP at this site. A scope of u,rk for the Phase 11 study was suhnitted en April. 1?, 1991. Eastem Edison i will proceed ence the DEP approves the scope of work. 9. Blackstone received a letter dated May 25, 1990 frm the RIDW l requiring site assess &nt and rtwdiation activities relative to casolire contamination eticountered at Blackstone's Operations Center in Lincoln, Rhode Island. Gasoline contamination was encountered during an underground storage tank runwal and replacment prnject. Enviromental assesswnts have been l f ccnpleted and sulritted to the RIDm. A rtwdial system was designed, pemitted and put in service in July 1991, i Blackstone, Eastern Edison, Montaup and EUA Service are unable to predict the outccm of any of the foregoir.g enviromental mtrers or to estintte the potential costs which my ultimtely result. It is the policy of these 'ecepanies in such cases to provide notice to liability insurers and to mke ~ claims, but with respect to the foregoing mtters it is not possible at this tire to predict whether liability, if any, will be assuned by, or can be enforced against, the insurance carrier. Under CERCLA, each responsible party can be held " jointly and severally" liable for clean-up costs. EUA or a subsidiary could thus be held fully liable for envirotwntal damges for which i they were only partially responsible, lkuever, EUA might then be entitled to recover costs from other PRPs. As of December 31, 1991 the EUA Systm has incurred costs of approxistely $2,100,000 in connection with the foregoing envirotwntal matters and estimtes be incurred through 1993 up to $4,300,000. Of that additional expenditures my $1,900,000 these anounts, approxim tely of incurred costs to date and approximately $3,600,000 of the estimted future costs relate to Blackstone. As a general matter, the EUA Systm will seek to recover costs relating to enviromental proceedings in their rates, although there is no assurance that they will be authorized to recover any particular cost. Blackstone is currently recovering in rates certain of the incurred costs over a five-year period. Montaup is currently recovering certain of the incurred CoFtS in its rates. Estimated amounts after 1993 are not now determinable since site studies which are the basis of these estimtes have not been ccupleted. As a result of the recoverability in current rates, EUA believes that the impact of j ultimate enviromental costs are not mterial to the EUA Systm or to any individual subsidiary and has not recorded a liability for those mounts. l 25 i

i Sharehnider Proceedings On Januarv 22, 1991, an cwer of 200 EUA camn shares filed a class action suit on behilf of certain Et% shareholders in Superior Court of he Cmrerwealth of Rassachusetts (Superier Court) naning EUA and certain currmt and fotrer Trustees of Et% as defendants, he suit alleged that El'A issued tw;erially nisleading statment 2. and r.isrepresentations about the financial

tatua and prospects of EUA Pcuer and their impact on the financial status and prospects of EUA. thereby fraudulently inducing certain EUA shareholders to purchase ccrmn shares at prices in excess of their fair valun.

The plaintiff sought

a

damges, costs and

expenses, includinr, reasonable attorneys' Tensatory fees, and other relief.

On Septmber 9,1991, the parties signed a i sett1 ment agrement. On t'ovmber 14, 1991, the Superior Court signed a judcment, shich was entered en January 14, 1992: (i) approving the settlemnt as fair, reasonable and adequate and directing the parties to connemte tlw settlement according to the tents of the sett1m ent agrement and (ii) dirmissing the action in its entirety on the nerits and with prejudice and barring and perwnently enjoinine each nerber of the plaintiff class frar l prosecuting against any of the de/endants any claims or causes of action which I cerbers of the plaintiff class had, have or' night in the future have against any end all of the deferdants arising out of or relating in any way to (a) the emplaint filed in the action or (b) the purchase or sale of EUA emnon shares during the period P. arch 1, 1987 through January 23, 1991, inclusive. We settlenent agrement provides that the plaintiff class includes all persons who purchased conmon shares of EUA, including through EUA's Dividend Reinvestwnt and Ccrman Share Purchase Plan, durir4; (1) the period Kirch 1, 1987 through February 15, 1990, inclusive, and did not sell all of those shares until, if ever, after February 15, 1990, and/or (ii) the period February 16, 1990 through January 23, 1991, inclusive. Be sett1 ment agrement provides further that after the judgment signed by the Superior Court is no longer subject to review, EUA shall pay $2.75 million plus accrued sinple interest at an annual rate of 6.257, frce Novmber 14, 1991 into a sett1 ment fund, i on tbvember 19, 1991, a former shareholder of approxinutely 540,000 cmmn l shares filed a notion with the Superior Court requesting exclusion frca the riaintiff class in the class action suit which had been filed in the Superier Court on January 22, 1991 by an cuner of 200 comon shares. he notion alleged that the shareholder did not receive notice in tire for it to exclude itself from the plaintiff class by the exclusion deadline of tbymber 14, 1991. On Decmber 23, 1991, the-shareholder filed a second notion with the Superior Court requesting the Superior Court to re-open the question of the adequacy of the class notice. EUA has opposed both notions. To date, the Superior Court has not ruled on either notion. On February 11, 1992 that same former shareholder filed a suit against EUA and three officers of EUA in the Federal District Court for Massachusetts, alleging fraudulent and negligent misrepresentation and violations of Rule 10b-5 under the Securities Exchange Act in connection with statments made regarding the business prospects for EUA Power and the portion of EUA's ccrmm share dividends attributable to AFUDC from EUA Power. EUA and the three officers named in the Federal District Courr suit deny all allegations of liability and all of the clains and contentions alleged by the fomer shareholder. If the Superior Court denies the former shareholder's moticns, EUA believes that the district court lawsuit should be barred by the sett1 ment of tho class action suit which was approved by the Superior Court on tbvmber 26

_._.~. _ _ _ __ 4 [ i1 I 14, 1991 with judgnent entered on January 14, 1992. A provision of the sett1 ment agrement a11cvs ELR to teminate the sett1 ment agrement if mre than five percent (5%) of the eligible shares elect to be excluded frm the

class, In the event that the Superior Court were to detemine that the notice to class had been inadequate, it is not clear what inpact such a deteminatim l

sould have on the sett1 ment agrement. l If the setthnent agrement becmes final it should not negatively inpact earnings subsequent to June 30, 1991 because of a reserve of $1,500,000 (after tax) established by El% in the second quarter of 1991 and contributions frm insurcnce proceeds. Et% and the thirteen fonwr and present Tmstees of El'A nmed in the class action lawsuit, have denied and continue to deny all allegations of liability and all of the claims und contentions alleged by the plaintiffs in the lawsuit, but considered it desirable that prolonged and costly litigation be avoided and that the lawsuit be settled and dismissed with prejudice. El% and the officers of El% named in the district court lawault deny all allegations of liability and all of the clains and contentions alleged by the fomer shareholder in the district court suit. If the forner shareholder is successful in its motion requesting exclusion furn tl e plaintiff class, EUA intends vigorously to defend the discrict court ruit. Other Proceedings, On Kay 30, 1991, the Bondholders Comittee, filed a preference suit against EUA in Bank:vptcy Court seeking to recover S38,452,500 plus interest in alleged preferential transfers frcru EUA Powr to EUA. EUA believes that it has an adequate defense against such suit, but cannot predict the outeme nor the effect of this suit or any other action which my be brought against EUA by the Bondholders Ccmittee. On June 23, 1989, the Intemal Revenue Service (IRS) issued a report in connection with its examination of the consolidated ineme tax return of El'A e for the year 1984 'Ihe report included a aroposed adjust: ment to disa11cv i Montaup's Seabrook Unit 2 abandoment loss decuction of M,7 nu111on clained i in the return. EUA has bem advised by the IRS Regional ~ rector of Appeals that th? IRS has reached a settlenent on this issue with other affected taxpayers. 'Ihe sett1 ment pemits an abandonment loss deduction in 1984, as criginally claimed by EUA, but provides a reduction of the loss for salvage of ap 3roximnely $1.0 million which would be allcwd as a tax deduction in Although there can be no assurance that this sett1 ment will su> sequent years. be applied to EUA, based on preliminary discussions with the IRS, EUA believes it vill reach a cmparable settlenent which vill not have a mterial effect on the Etnancial statennnts. On June 30, 1987, the MDPU ccxmenced a proceeding for the purpose of inves-tigating Eastern Edison's power planning process after rejecting a proposed One of the purposes of this proceeding Purchased Capacity Adjustmrmt Clause. is to investigate the prudency of Eastern Edison's all-requirments contract with Montaup. No procedural dates have been set nor has any other activity i occurred in this docket. EUA cannot predict the outccxm of this mtter at this tire. I l 27 i I l

e i On January 6,

1992, the Massachusetts itnicipal kholesale Electric Cooperative and its umber mnicipalities, all of dich are nubers of NEP00L.

filed a suit in Massachusetts Superior Court against the investor-cuned utilities that are also mxbers of NEKOL. The suit alleges dmuges by NEIOOL's establishment of minfrun size requirements for generating units designated as pool-planned generating units. The suit nmes as defendants mrbers of NEKOL, including Blackstone, Fastern Edison, El'A Power, Montaup and l thport (NElYOL nmbers of the EUA System). Panagment cannot predict the ultimate cutecw of this proceeding at this tine SFC Review in Januarv of 1991, the SEC's Division of Corporation Finance ccrrenced a review of EUA's Annual Rexrt on Fom 10-K for the year ended Decmter 31, 1989 and subsequent Quarterly Reports on Fonn 10-Q.. El'A suhnitted written responses to all of the inquiries mde by the Divinton of Corporation Finance. In May of 1991. EUA was informd by the SEC'c Division of Enforcerent that it umld conduct an infonel review with respect to certain issues addressed by the Division of Corporation Finance principally relating to the accounting for the capitalized financing costs related to EUA Pcuer's investrent in Seabrook Unit 1 and the effect which recording such amounts had en reported earnings for 1990, 1989 and 1988. EUA infonred the Division of Enforement that it would cooperate with the infonm1 inquiry and in July of 1991 EUA empleted its [ responses to the Division of Enforcemnt's initial inquiries. EUA has received no corrunications frcin the Division of Fnforecomt since EUA cctpleted its responses in July, 1991. EUA cannot predict the outccm of the SEC's review. The SEC could require that EUA restate its financial statewnts for 1990,1989 or 1988, or for any quarterly period during such years. EUA continues to believe that its financial statements have been prepared in accordance with generally accepted accounting principles and present fairly the financial position and results of l cperations of EUA. Item 4 S1*BMISSION OF MATTERS TO A WIE OF SECURITY H01DERS tbne. EXECtTFIVE OFFICERS OF THE PEGISTRANT The nmes, ages and positions of all of the executive officers of EUA as of March 22, 1992 are listed below along with their business experience during the past five years. Officers are elected annually by the Trustees at the meting of Tnastees next following the annual weting of shareholders. There are no family relationships mong these officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was selected. 28

4 thee. Ago and Position business &perience During Past 5 Years Richard M. Bums, 54 CaTtroller since 1976 Assistant Secretary Cmptroller (1) since 1978, and Assistant Treesurer since April 1986. Chief Accounting Officer of El%. Arthur A. Hatch, 61 Executive Vice President since January 1990: Executive Vice President (2) President of Fastem Edison frm June 1986 to December 1989: responsible for pcwt-supply, rate activities, infonmtion sys-tms, strategic planning, purchasing ren-agment, engineering and operations of the transmission and distribution facilities of the El% Systm. Clifford J. Hebert, Jr., 44 Treasurer since April 1986. Responsible for Treasurer (3) financial and treasury activities of the El% Systan. Willirm F. O'Connor. 52 Secretary since 1971: responsible for corpo-Secretcry (4) rate affairs and hunan resources activi-ties of the EM Systan. Dor H G. Pardus, 51 Chaiman since July 1990: Chief Executive Chau nan of the Board, Officer since April 1989: President fran 011ef Executive Officer Decmier 1985 through June 1990: Chief and Trustee (5) Operating Officer frm January 1988 to April 1989: Chief Financial Of'ficer fran 1979 to January 1988: responsible prin,ri-ly for the overall tranagment of the EUA System. John R. Stevens, 51 President since July 1990: Chief Operating President, Chief Operating Officer since January 1990: Senior Exec-Officer and Trustee (6) tive Vice President fran January 1990 to ~ July 1990: Er.ecutive Vice President frm June 1987 to Decmber 1989: prior to that time he was a Vice President of Bostm Edison Caupany for mre than five yearsi responsible for corporate ccmmnications, retail operations, new ventures and the financial affairs of the EUA Systm. (1) Vice President, Cocptroller, Assistant Treasurer, Assistant Clerk /Secretarv and Director of EUA Service and EUA Powr Vice President, Assistant Treasurer and Assistant Clerk / Secretary of Eastern Edison and Blackstone Cmptroller, Assistant Treasurer and Director of El% Cogenex Vice President, Assistant Treasurer, Assistant Clerk and Director of Montaup and El% Energy: Assistant Treasurer of EUA Ocean States Vice President and Assistant Treasurer of hport. (2) Executive Vice President and Director of Blackstone, Eastern Edison, EUA Ccgenex, EUA Energy, EUA Ocean State, EUA Power, Et% Service, Fbntaup and ?ksport. 29

(3) Treasurer of Blackstone, Eastern Edisco, EUA Energy, El% Ocean State, !tntaup, EUA Service and thporti Treasurer and Assistant Clerk / Secretary of El% Cogenex and El% Power. (4) Vice President,

Clerk, Secretary and Director of El%

Seevice: Secretary / Clerk of Blackstone, Eastern Edison, Et% Ocean State and Newport: Clerk and Director of Et% Cogenex, El% Energy and tbntaup Director and Assistant Secretary of El% Power. (5) Chairtran and Director of Blackstone, Eastern Edison, EUA Cogenex, EUA Energy, Et% Ocean State, El% Pcwr, Et% bervice, Montaup and Newport. (6) Vice Chaitran and Directer of Blackstone, Eastern E ': son, El% Cogenex and Newport President and Director of El% Frergy, Et% Ovan State, El% Pcwr, tbntaup and El% Service. Fr. cept as described below, there have been no events under any bankruptcy act, no criminal preceedings and no judgements or injunctions nnterial to the evaluation of the ability ed integrity of any director or executive officer during the past five years. On February 28, 1991, EUA Pcwr, filed a voluntary petition with the Pankruptcy Court for protection ender & apter 11 of the Bankruptcy C<xie. EUA Pcwr, a wholly-cuned subsidiary of EUA, was organized solely for the purpose of acquiring an interest in tha Se ibrook Project and selling in the wholesale rarket its share of electrictuy generated by the project. Messrs. Burns. Hatch, Hebert, O'Connor, Pardus, and Stevens are also officers or directors of EUA Power. PART II Item 5. MARET FDR REGISTIM'S C01DN EQUITt AND RELATED SIDCKlKEER MATTERS The informtion set forth under the caption Quarterly Financial and Cccron Share Informaticn included in the Registrant's Annual Report to Shareholders for the year ended Decmber 31, 1991 (Exhibit 13-1 filed herewith) is incorporated herein by reference. The closing price of the Registrent's Ccnnon Shares as reported by the Wall Street Journal on March 3, 1992 was $21.125. Item 6. SELECTED DATA The infomation set forth under the caption Selected consolidated Financial Data included in the Registrant's Annual Report to Shareholders for the year ended Decenber 31,1991 (Exhibit 13-1 filed herewith) is incorporated herein by reference. Item 7. MANAGDM'S DISCUSSION AND ANALYSIS OF FINANCIAL OEDITION AND RESULTS OF OPERATION The statements' and information set forth under the caption Vanagmamt's Discussion and Analysis of Financial Condition and Results of Operations included in the Pegistrant's Annual Report to Shareholders for the year ended Decenber 31, 1991 (Exhibit 13-1 filed herewith) are incorporated herein by reference. 30

m. _._ Itm 8. FINA!CIAL STATDEM AND SL'PPLDiNTARY DATA The following consolidated financial statomnts of the Registrant and its subsidiaries, included in the Registrant's Annual Frport To Shareholders for l the year ended Decmber 31, 1991 (Exhibit 13-1 filed herewith) are incorporated herein by reference: Consolidated Statement of Incme for the three years in the period ended Deceber ?l, 1991. Consolidated Statment of Retained Eamings (Deficit) for the three years in the period ended Decmber 31, 1991. Consolidated Statewnt of Cash Flcus for the three years in the period ended December 31, 1991. Consolidated Balance Sheet at Decmber 31, 1991 and 1990. Consolidated Statment of Equity Capital and Preferred Stock at Decmber 31, 1991 and 1990. Consolidated Statement of Indebtedness at Decaber 31,1991 ond 1990. tbtes to Consolidated Financial Statments at Decmber 31, 1991, 1990, and 1989. i Report of Independent Certified Public Accountants, dated March 11, 1992. The statments and information set forth under the captiens Quarterly Financial and Conron Share Infomation included in the Registrant's Annual Report to Shareholders for the year ended December 31, 1991 (Exhibit 13-1 filed herewith) are incorporated hereir. by reference. Item 9. DISAGREEMENIS ON ACCOUNTItC AND FINANCIAL DISCIDSURES i None PART III Item 10. DIREC'IORS AND EXECUTIVE OFFICERS OF TFI REGISTPANT The information conceming trustees and executive officers set forth on pages 2 through 5 of the Registrant's definitive Proxy Statement dated March 26, 1992 and filed with the Cmmission is incorporated herein by reference. See also " Executive Officers Of The Registrant" following Itm 4 herein. Item 11. EYECUTIVE C WPENSATION The information concerning executive compensation set forth on page 5 of the Registrant's definitive Proxy Statment dated March 26, 1992 and filed with the Cmmission is incorporated herein by reference. It m 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The statments concerning security ownership of certain beneficial owners and management set forth on pages 3 and 4 of the Registrant's definitive Proxy Statment dated March 26, 1992 and filed with the Cmmission are incorporated herein by reference. Item 13. CERTAIN REIATIONSHIPS AND RELATED TRA!GCTIONS None 31

PART IV Itm 14 EXHIBITS, FINANCIAL STATIEEST ECFEDLES, AFD REPORTS ON FORM 8-K (a)(1) Financial Statemnts 'lhe response to this portion of Itm 14 is set forth under Item 8. (a)(2) Financial Statement Schedules The following additional consolidated financial statment schedules filed herwith should be considered in conjenetion with the financial statenents in the Registrant's Annual Report to Shareholders for the year ended Decenber 31, 1991 (F# ibit 13-1 filed herewith): 1. Financial Statenunt Schedules: Property, Plant and Equipment for the three years ended Schedule V Deceber 31, 1991. Accuculated Depreciation, Depletion and Anortization of Schedule VI Property, Plant and Equiptent for the three years ended Decenber 31, 1991. Valuation and Qualifying Accounts for the three years Schedule VII ended Decenber 31, 1991. Short-Tem Borrcwings for the three years ended December Schedule IX

31. 1991.

Supplemntary Inccm Statement Informtion for the three Schedule X years ended Decmber 31, 1991. All other schedules have been cmitted because the required infomation is not oresent or not sufficiently material to require submission of the schecule, or because the infomation required is included in the financial statments or the notes thereto. 2. Rewrt of Inde xmdent Certified Public Accountants (Coopers & Lyarand) for 199L,1990 and 1989 included in the Registrant's Annual Report to Shareholders for the year ended Ihccmber 31,1991 (Exhibit 13-1 filed herewith). (a)(3) Exhibits (* denotes filed herwith). 3-1 - Declaration of Trust of EttA, dated April 2. 1928, as amended Exhibit A-3, File tb. 70-3188: Exhibit 1 tc EUA's 8-K Reports for April in each of the years 1957, 1962, 1966, 1968, 1972, and 1973, File tb.1-5366: Exhibit A-1 (a) Amendmnt tb. 2 to Fom U-1, File No. 70-5997: Exhibit 4-3, Registration tb. ' 72589: Exhibit 1 to Certificate of tbtification, File tb. 70-6713: Exhibit 1 to Certificate of tbtification, File Ib. 70-7084: Exhibit 3-2, Fom 10-K of EUA or 1987, File tb. 1-5366). 32 1

4-1 - Fom of 8; Debenture Bonds due 2000 of !bntaup (Fahibit 4-10 Registraticn tb. 2-41488). 4-2 Fom of 8-1/4; Debenture Bonds due 2003 of tbntaup (Fxhibit B-3, Fom USS of EUA for year 1973). Fom of 141 Debenture Bonds due 2005 of tbntaup (Exhibit 4-11, 4-3 Registration Ib. 2-55990). t Fom of 10! Debenture Bonds due 2008 of Ftntaup (Fxhibit 5-3. 4-4 Registration tb. 2-65785). Fom of 16-1/2I Debenture Bonds due 2010 of tbntaup (Exhibit 4-5 4-11, Fom 10-K of EUA fer 1980. File !b.1-5366). Fom of 18% Debe'.ture Bonds due 20U of Fbntaup (Exhibit 4-12, 4-6 Fom 10-X of El'A for 1981, File th.1-5366). 4-7 Fom of 17I Debenture Bonds due 1992 of Fbntaup (Exhibit 4-1?, Fom 10-K of EUA for 1982, File Ib.1-5366). Fom of 12-3/8% Debenture Bonds due 2013 of bbntaup (Exhibit 4-8 4-13, Fom 10-K of EUA for 1983, File !b.1-5366). Fom of 10-1/8% Debentures due 2008 of Fbntaup (Exhibit 4, Fom 4-9 10-Q of Eastern Edison for quarter ended Septmber 30, 1983 File Ib. 0-8480), Fom of 91 Debenture Bonds due 2020 of tbntaup (Exhibit 4-10 4-10 Fom 10-K of Eastem Edison for 1990, File !b. 0-8480). Indenture of First tbrtgage and Deed of Trust dated as of 4-11 Septmber 1,1948 of Eastern Edison (Fxhibit 4-1, Registration tb. 2-77468). First Supp1 mental Indenture dated as of Febmary 1,1953 of 4-12 Eastern Edison (Exhibit A, File tb. 70-3015). 4-13 Second Supp1 mental Indenture dated as of May 1, 1954 of Eastern Edison (Exhibit A-3, File No. 70-3371). '1hird Sup>1emental Indenture dated as of June 1, 1955 of 4-14 Eastern Ecison (Exhibit C to Certificate of tbtification, File Ib. 70-3371). Fourth Supp1 mental Indenture dated as of Septmber 1,1957 of 4-15 Eastem Edison (Exhibit D to Certificate of Notification, File No. 70-3619). Fifth Sup11emental Indenture dated as of April 1, 1959 of 4-16 Eastern Ecison (Exhibit D to Certificate of tbtification, File !b. 70-3798). 33 N

Sixth Supplenental Indcnture dated as of October 1, 1963 of 4-17 Fastern Edison (Fshibit F to Certificate of tbtification, File No. 70-4164). Seventh Supp1 mental Indenture dated as of June 1, 1969 of 4-18 Eastern Edison (Exhibit D to Certificate of !btification, File Ib. 70-4748). Eighth Supplanental Indenture dated as of July 1, 1972 of 4-19 Eastern Edison (Exhibit C to Certificate of tbtification, File !b. 70-5195). Ninth Supp1 mental Indenture dated as of Septeber 1,1973 of 4-20 Eastem Edison (Exhibit F to Certificate of Notification, File ib. 70-5379). Tenth Supp1 mental Indenture dated as of October 1, 1975 of 4-21 Eastem Edison (Exhibit C to Certificate of Notification, File tb. 70-5719). Eleventh Supp1 mental Indenture dated as of January 1,1979 of 4-22 Eastem Edison (Exhibit 5-24, Prgistration tb. 2-65785). Twelfth Supp1 mental Indenture dated as of October 1,1980 of 4-23 Eastern Edison (Exhibit F to Certificate of Notification, File Ib. 70-6463). 'Ihirteenth Supplanental Indenture dated as of July 1,1981 of 4-24 Eastern Edison (Exhtbit C to Certificate of tbtification, File No. 70-6608). Fourteenth Supp1 mental Indenture dated as of June 1,1982 of 4-25 Eastem Edison (Exhibit C to Certificate of tbtification, File No. 70-6737). Fifteenth Supp1 mental Indenture dated as of August 1,1983 of 4-26 Eastern Edison (Exhibit F to Certificate of tbtification, File No. 70-6851). Sixteenth Supp1 mental Indenture dated as of Septenber 1,198'e 4-27 of Eastern Edison (Exhibit 4-31, Fonn 10-K of EUA for 1984, File No. 1-5366). 4-28 Seventeenth Supplemental Indenture dated as of July 1,1986 of Eastem Edison (Exhibit F to Certificate of tbtification, File tb. 70-7254). Eighteenth Supplenental Indenture dated as of June 1,1987 of 4-29 Eastem Edison (Exhibit C to Certificate of Notification, File tb. 70-7373). 4-30 Nineteenth Supalenental Indenture dated as of Novmber 1,1987 of Eastern Ed:. son (Exhibit C to Certificate of Notification, File tb. 70-7373). 34

y l Twentieth Supplemmtal Indenture dated as of niy 1, 1988 of 4-31 Eastern Edison (F.xhibit C to Certificate of tbtificatim, File Ib. 70-7373). i 4-32 Twenty-First Supplmental Indenture dated as of Septmber 1, 1988 of Eastern Edism (bhibit F to Certificate of tbtification, File !b. 20-7511). Twenty-second Supp1 mental Indenture dated as of Decmber 1, 4-33 1990 of Eastern Edison (Diibit 4-34, Fom 10-K of Eastem Edison for 1990. File !b. 0-8480). Indenture dated as of Decmber 1,1990 of Eastem Edison with 4-34 Citibank, N. A., as Tmstee (Exhibit 4-35, Fom 10-K of Eastern Edison for 1990, File No. 0-8480). First Mortgage Indenture and Deed of Tmst dated as of Deca +er 4-35 1,1980 of Blackstone (Exhibit A, Fem 8-K of El'A dated January 14, 1981 File tb.1-5366). First Supp1 mental Indenture dated as of August 1, 1989 of 4-36 Blackstone (Exhibit 4-33, Fom 10-K of EUA for 1989, File ib. 1-5366). Second Supp1 mental Indenture dated as of tbvenber 26, 1990 of 4-37 Blackstone (Exhibit 4-3, Fom 10-E of BVE for 1990, File Ib. 0-2602). Indenture of Mortgage dated as of tbvmber 15, 1986 of El% 4-38 Power (Exhibit 4-1, Registration !b. 33-10978). First Supplumntal Indenture dated as of February 24, 1987 of 4-39 EUA Pcuer (Exhibit 4-35, Fom 10-K of EUA for 1986. File Ib. 1-5366). Second Supp1 mental Indenture dated as of May 1,1988 of EUA 4-60 Power Corporation (Exhibit 4-40, Fom 10-K of El'A for 1988 File tb.1-5366). 'Ihird Supplumntal Inderture dated as of Novmber 1, 1988 of 4-41 EUA Power Corporation (Exhibit 4-41, Fom 10-K of FUA for 1988, File tb 1-5366). Fom of tbte Exchange Inducement Agrement of El% Power 4-42 Corporation (Exhibit 4-6, Registration No. 33-23127). Fom of Registration P.ights Agreamnt of EUA Power Corporation 4-43 relating to Exhibit 4-6 (Exhibit 4-7, Registration No. 33-23127). 4-44 Ioan and Trust Agrement mong Industrial Develcprent Authority of the State of New timpshire, EUA Power and Shamut Bank, NA, as Tmstee dated as of Decmber 1, 1990 (Exhibit 4-44, Fom 10-K of Fl% for 1990, File Ib.1-5366), 35

~ I tbre Purchase Agreenent dated as of January 13, 1988 of Service 4-45 (Exhibit 4-38, Fom 10-K of EUA for 1987. File tb.1-5366). tbte Agrement dated as of June 28, 1990 of EUA Cogenex with 6-46 the Pmdential Insurance Cmpany of America. (Fvhibit 4-46, Fom 10-K of EUA for 1990, File tb.1-5366). Fom of 9 3/81 Debenture Bonds dec 2020 of Montaup (Exhibit 4-47 4-11, Tom 10-K of Eastem Edison for 1990, File No. 0-8480). Form of Eastern Fdison Medium Term tbte (Exhibit 4-36, Fom 4-48 10-K of Eastern Edison for 1990, File Ib. 0-8480), Indenture of First tbrtgage dated as of June 1, 1954 of l 4-49 th port, as supp1mented on August 1, 1959, April 1,

1962, October 1,1964, April 1,1967, Septenber 1,1969, Septmber 1, 1970, June 1,1978, October 1,1978, May 1,1986, Deceber 1, 1987 and tbvmber 1, 1989 (Exhibit 4-49, Fom 10-K of EUA for 1990. File ib.1-5366).

United States Goverment Snn11 Business Adninistration loan to 4-50 thport entitled, " Base Closing Econmic Injury loan", signed May 30, 1975 and amended on October 6,1983 (Exhibit 4-50, Fom l 10-K of EUA for 1990, File tb.1-5366). Indenture of Second Mortgage dated as of Septaber 1,1982 of 4-51 thport, as supplemnted cn Decmber 1, 1988 (Exhibit 4-51, Fom 10-K of EUA for 1990, File No.1-5366). Ioan Agrement between Rhode Island Port Authority and Econmic 4-52 Developtrent Corporation and N~ mort dated as of' Septmber 1, 1982 (Exhibit 4-52, Form 10-K or EUA for 1990, File tb.1-5366). i letter of Credit and Reimbursment Agrement dated as of 4-53 Decmber 21, 1990 betwen EUA Power Corporation and Citibank, N. A. (Exhibit 4-53, Fom 10-K of EUA for 1990, File tb.1-5366). Guaranty, dated as of Decmber 31, 1990 by Fcstern Utilities 4-54 Associates in favor of Citibank N. A. (Exhibit 4-54, Fom 10-K of EUA for 1990, File tb.1-5366). tbre Agrement dated as of October 29, 1991 between EUA Cogenex

4-55 and Prudential Insurance Cmpany of America.

thte Purchase Agrement dated as of January 16, 1992 betwen

4-56 l

EUA Ocean State Corporation and John Hancock Mutual Life Insurance Campany. Employees' Retirment Plan of Eastern Utilities Associates and 10-1 its Subsidiary Companies Trust Agreement as amended and restated, effective July 1, 1981 (Exhibit 10-1, Registration No. 2-80205). f Employees' Retirment Plan of Eastem Utilities Associates and 10-2 its Subsidiary Cmpanies Plan as amended and

restated, l

36 I

effective January 1, 1985 as arendod as of January 1, 1985. July 1, 1987, Jarvary 1, 1989 and Neder 30, 1990 (&hibit 10-2 Fom 10-K of EUA for 1985 File tb. 1-5366: Exhibit 10-77 Fom 10-X of El'A for 1986, File tb. 1-5366: D.hibit 10-118, Fom 10-K of EUA for 1987, File tb. 1-5366: Exhibit 10-95, Fom 10-K of EUA for 1988, File !b. 1-5366: Exhibit 10-79, Fom 10-K of Eastem Edism for 1990, File flo. 0.8490). Pom of Service Contract betwen EUA Service Corporation and 10-3 each of the other canpanies (including EUA) in the EUA Systm (D.hibit 13-1, Registratien tb. 2-55990). Advisory Service Contract betwen EUA Service Corporation and 10-4 Stone & Webster Managment Consultants, Inc. effective as of April 1, 1982 (Exhibit 10-3, ReFistration th. 2-80205). Montaup Contract, as mended (Exhibit 4-P, Registration tb. 10-5 2-14119: Exhibit 13-A1, Registration tb. 2-14718: hhibit 4-B-2, Registration !b. 2-26509: Exhibit 4-B-3, Kegistration tb. 2-33061: hhibits 13-3 and 13-4, Registration tb. 2-48966 Exhibit B-2, Fom USS of EUA for year 1974 and Exhibit 5-40, Registration tb. 2-62862). i Stockholder Agrement (cmposite copy) betwen Yankee Atanic 10-6 Electric Company and tbntaup dated Decenber 10, 1958 Exhibit 13-6-A, Registration tb. 2-15748). Pesearch Agrement (cmposite copy) betwen Yankee Atmic 10-7 Electric Canpany and Montaup dated Jur.2 30, 1959 (Exhibit 13-6-B, Registration tb. 2-15798). l I Power Contract (canposite copy) betwen Yankee Atmic Electric 10-8 Company and Fbntaup dated June 30, 1959 as Revised April 1, 1975, as further amended October 1,1980, April 1,1985, May 6, 1988, June 26, 1989 and July 1,

1989, (Exhibit 10-6, Registration tb. 2-72655: Exhibit 10-73, Fom 10-K of EUA for 1985 File tb.- 1-5366: &,hibit 10-96, Fom 10-K of EUA for 1988 Fila tb.1-5366: Exhibits 10-93 and 10-94, Fom 10-K of EUA for 1989, File No. 1-5366).

Transmission Contract (cmposite copy) mong Yankce Atomic 10-9 Electric Company's Sponsors, including Montaup, dated June 30, 1959 (D.hibit 13-6-D, Registration tb. 2-15798). I r Power Contract (cmposite copy) betwen Connecticut Yankee 10-10 Atanic Power Cmpany and Montaup dated July 1,1964 (Exhibit B-1, File tb. 70-4245). Capital Funds Agrement (canposite ccpy) between Connecticut 10-11 Yankee Atmic Power Cmpany and Montaup dated Septmber 1,1964-(Exhibit B-?, File No. 70-4245). Transmission Agremxmt (canposite copy) mong Connecticut 10-12 Yankee Atanic Power Cmpany's Sponsors, including tbntaup, dated October 1, 1964 (Exhibit B-3, File tb. 70-4245). l 37

i 1 10-13 Stockholder Agrement (ccuposite copy) axrc onnecticut Yankee c Atanic Pcwr Canpany's Sponsors, including !bntaup dated July 1,1964 (&hibit B-4, File tb. 70-4245). 10-14 Trensmission Agreemmt betwen Poston Edison Camany, !bntaup, New England Pcwr Cmpany, Canbridge Electric Light Corpany, Cape & Vineyard Electric Ccupany and New Pedford Gas and Edison Light Capany dated December 1, 1965 (&hibit 4, File tb. 0-688). 10-15 Contract for sale of pcwer to *ntaup by Canal Electric Company dated December 1, 1965 (Exhibit 2D, File No. 0-688). 10-16 Capital Funds Agreemnt (composite copy) betwen Venmnt Yankee tbc1 car Pcwr Corporation and Mcntaup dated as of February 1, 1 1968, and Arendment thereto dated as at March 12,1968 (Exhibit B-2, File No. 70-4611: bhibit E-3, File No. 70-4611). t 10-17 Form of Pcur Contract betwen Vement Yankee Nelear Pcur Corporation and Montaup dated as of February 1, 1968, as amended June 1, 1972, April 15, 1983, April 24, 1985, June 1, 1985, May 6, 1988 (2), June 15, 1989 and Decmber 1, 1989 (Exhibit B-4, File No. 70-4591: Exhibit 13-21, Pegistration tb. 2-46612 bhibit 10-63, Fom 10-K of EUA for 1983, File No. 1-5366: Exhibit 10-74, Fom 10-K of EUA for 1985, File !b. l 1-5366: Exhibit 10-78, Fom 10-K of EUA for 1986, File tb. l 1-5366: bhibits 10-97 and 10-98, Fom 10-K of EUA for 1988, i File No. 1-5366: Exhibit 10-95, Form 10-K of EUA for 1989 File No. 1-5366: Exhibit 10-80, Fom 10-K of Eastern Edison for 1990, Filc No. 0 8480). i 10-18 Sponsor Agreamnt (composite copy)luding Montaupanmg Venmnt Yankee Pcuer Corporation's Sponsors, inc dated as of l August 1,1968 (Exhibit 4-0, Registration tb. 2-33061). 10-19 Capital Funds Agreement (composite copy) between !bine Yankee Pcur Cmpany and Montaup dated May 20, 1968 and as amended August 1, 1985 (&hibit B-2, File !b. 70-4658: Exhibit 10-78, Fom 10-K of EUA for 1985 File tb.1-5366). 10-20 Pcuer Contract (conposite copy) between Maine Yankee Atomic Power Coupany and Montaup dated May 20, 1968, as amended Decanber 19, ~ 1983 and January 1, 1984 (Exhibit B-3, File No. 70-4658 - Exhibit 10-64, Fom 10-K of EUA for 1983, File tb. 1-5366: Exhibit 10-66, Fom 10-K of EUA for 1984, File No. 1-5366). 10-21 Stockholder Agrement (camposite copy) anmg Maine Yankee Atanic Power Cmpany's Smnsors, including Montaup, dated Kay 20, 1968 (Exhibit B-4, File 70-4658). 10-22 Agrement (cmposite copy) among Venmnt Yankee Nuclear Power Corporation's Sponsors, including Montaup, dated as of April 30, 1969 (Exhibit B-7, File No. 70-4435). l 38

Fom of Vetwnt Yankee Tranmission Agreuwnt dated as of April 10-23 1,1971, (Exhibit 13-42, Registration tb. 2-41488). Fom of Agrearnt.rceg Maine Yankee Atanic Pcwr Conpany's 10-24 Sponsors dated as of Kay 20, 1969 (Exhibit B-5, File !b. 70-4658). Form of Kaine Yankee Transmission Agreurnt dated as of April 10-25 1, 1971 and as amended as of March 1, 1978 (Exhibit 13-43. Registration tb. 2-41488: E>hibi t 19, Fem 10-K of EUA fer 1977, File tb.1-5366). Pcwr Con!)any, Participation Agreunent betwen Maine Electric 10-26 o tW Inc. and participants in purchase and transmission Brunswick pcwr, including tbntaup, dated June 20,

1969, suppl unted by Amendrent dated as of June 24, 1970 (Exhibit 4.23.1, Registration No. 2-35073: Fxhibit 13 37, Pagistration No. 2-37944).

Fom of New England Pcwr Pool Agrearnt dated as of Feptemler 10-27 1, 1971, as amended as of July 1, 1972, March 1, 1973, April 2, 1973, March 15,1974, June 1,1975, Septenber 1,1975, Ikcanber 31, 1976, January 18, 1977, July 1, 1977, August 1,

1977, August 15, 1978, January 31, 1980, February 1,1980, Septenber 1,1981, Deceaber 1,1981, June 1,1982, June 15,1983, October 1,

1983, August 1, 1985, August 15, 1985, January 1,

1986, Septmber 1, 1086, March 1, 1988, May 1, 1988, March 15,1989 and October 1, 1990, (Exhibit 13-45, Registration tb. 2-41488:

Exhibit 13-38, Registration No. 2-46612; Exhibits 13-39 and 13-40, Registration tb. 2-4S966; Exhibit B-3, Fom USS of EUA for year 1974 Exhibit 13-35(a), Registration tb. 2-54449; bhibit 13-35, Registration tb. 2-55990, Whibits 5-69 and 5-70, Registration Exhibit 13-35(a), Registration No. 2-54449; Exhibit 13-35, Registration tb. 2-55990, Whibits 5-69 and 5-70, Registration tb. 2-58625: bhibit 6. Fom 10-K of EUA for ~ 1977, File Ib. 1-5366: Exhibit 1. Fom 10-K of EUA for 1979, File Ib. 1-5366: Exhibit No. 10-67, Registration tb. 2-80205: Exhibit 10-65, Fom 10-K of EUA for 1983, File tb. 1-5366; Exhibit 10-66, Fom 10-K of EUA for 1983. File tb. 1-5366; Exhibits 10-75, 10-76, and 10-77, Fom 10-K of EUA for 1985, File tb.1-5366: Exhibit 10-79, Fom 10-K of EUA for 1986, File tb. 1-5366; bhibits 10-99 and 10-100, Fom 10-K of EUA for 1988, File Ib. 1-5366; bhibit 10-96, Fom 10-K of EUA for 1989, File !b. 1-5366; Whibit 10-81, Fom 10-K of Eastern Edison for 1990, File tb. 0-8480). Agreanent betwen Montaup and Boston Edism Cmpany dated 10-28 August 1,1972 and as amended January 1,1985 for purchase of power frcrn Pilgrim tb. I nuclear unit at P1vnnuth, Massachu-setts (Exhibit 13-41, Registration tb. 2-46612: Exhibit 10-67, Fom 10-K of EUA for 1984, File No.1-5366). Joint Omership Agreawnt--NEPCO Nuclear Units dated as of 10-29 January 2, 1976 as amended August 6, 1976 anong New England Pcwr Capany and other utilities, including tbntaup (Exhibit 39

b 13-41, Pegistration tb. 2-55990: Exhibit 5-77, Pegistration !b. 2-58625). Pomr Purchase and Transmission Agrement betwen Montaup and 10-30 mine Electric Power Cmpany, Inc. dated Decenber 1, 1971 (Exhibit 13-43, Registration !b. 2-44377). Unit Participation Agrement betwen Maine Electric Pcuer 1 'l Cmpany Inc. and tbw Smnswick Electric P(ver Camission dated tbvmber 15,1971 (Exhibit 13-43.1, Registration !b. 2-44377). Assignmnt Agrement dated Wrch 20, 1972 betwen Maine 10-32 Electric PcNer Cmpany, Inc. and New Emnswick Electric Pcuer Connission (Exhibit 13-43.3, Registration tb. 2-44377). Agrement dated October 13, 1972 for Joint Omership, Con-i 10-33 struction and Operation of Pilgrim Unit tb. 2 mong Bosten Edison Cmpany and other utilities including Montaup, as arended July 25, 1973, Septmber 15, 1974, Deceber 1, 1974, February 15,1975, April 30,1975 June 30,1975, Novmber 30, 1975 and Decmber 15, 1975 (Exhibit 13-51, Registration Ib. 2-46612: Exhibit 13-56, Registration tb. 2-48966: Exhibit B-5, Fom USS of EUA for year 1974: Exhibit 13-52-A and 13-52-B, Registration tb. 7-53819: Exhibit 13-45(a), Pogistration tb. 2-54449: Exhibits 13-48 and 13-47(a), Registration tb. 2-55990). 10 Agrement for Sharing Costs Associated with Pilgrim Unit tb. 2 Transmission dated October 13, 1972 mong Boston Edison Cmpany and other utilities including Montaup (Exhibit 13-52, Registra-tion No. 2-46612). Agreement dated as of my 1, 1973 for Joint Ownership, 10-35 Constmetion and Operation of New Rmpshire ibclear thits among Public Service Company of New Hmpshire and other utilities including Montaup, as amended as of May 24, 1974, June 21, 1974, Septaber 25, 1974, October 25, 1974, January 31, 1975, supp1mented by letter Agrement dated April 27, 1978 and asanended as of April 18,1979 (two menchents), April 25, 1979 June 8, 1979, October 11, 1979, Decmber 15, 1979, June 16, 1980, Decmber 31,1980, June 1,1982 April 27,1984, June 15, 1984, mrch 8,1985, March 14,1986, May 1,1986, Septmber 19, 1986, Ibvmber 1987, January 13, 1989 and tbvmber 1, 1990. (Exhibit 13-57, Registration No. 2-48966: Exhibit B-6, Fom USS of EUA for year 1974; Exhibit 5-130, Registrati6n tb 2-62862: Exhibit 5-70, Registration tb. 2-65785: Exhibit 2, Fom 10-K of EUA for 1979, File tb.1-5366: Exhibit 5-34 Registraticn tb. 2-69052: Exhibit 20-1, Form 10-K of EUA for 1980, File tb. 1-5366: Exhibit 10-69 Registration tb. 2-80205: Exhibit 2, Fom 10-Q of EUA for the Quarter Ended March 31, 1984, File tb. 1-5366: Exhibit 3, Form 10% of EUA for the Quarter Ended June 30, 1984, File Ib.1-5366: Exhibit 10-70, Fom 10-K of EUA for 1985, File tb.1-5366: Exhibits 10-80 and 10-81, Fom 10-K of EUA for 1986, File tb..-5366: Exhibits 10-95 and 10-96, Fom 10-K of EUA for 1987 File Ib. 1-5366 Exhibit 10-101, Form 40 ,e- + -me. ~n v ,w.. a-- a .,enwe-,mwe - e v- ~ r m -sw-- e r e. e m

_=. - _ - = _. 10-K of EUA for 1988 File No. 1-5366: Exhibit 10 R?, Fom 10-K of Eastern Edison for 1990, File tb. 0-8480). Transmission Support Agreernt dated as of Ray 1, 1973 morr, 10-36 Public Service Company of New Hmpshire and other utilities including tbntaup with respect to New Papshire nuclear units, i as mended February 1, 1983 (Exhibit 13-58, Pegistration 2-48966; bhibit 10-69, Fom 10-K of EUA for 1982, File tb. 1-5366). Purchase Contract between bbntaup and Newport Electric 10-37 Corporation dated April 1, 1973 (Exhibit 13-59, Registration 2-48966). Agrement dated September 21, 1972, Amenchent thereto dated 10-38 April 26, 1973, and supp1menting letter dated K1rch 28,1975 relative to Canal Unit tb. 2 Transmission amng Fbntaup, thw Bedford Gas and Edison Light Cmpany and Boston Edison Cmpany (Exhibit 13-60, Pegistration 2-48966: Exhibit 13-58, Registration tb. 2-53819). Sharing Agrement dated as of Septaber 1, 1973 meng 'Ihe 10-39 Connecticut Light and Pcuer Cmpany and other utilities, l including - Montaup, conceming participction in a nuclear generating unit located in Ccnnecticut (Millstone Unit No. 3), as amended and supp1mented by Amendatory Agrement dated May l 11, 1984 as amended as of April 1,1986 (Exhibit B-17, Fom USS of EUA for year 1973; Exhibit B-8, as amended as of April 11, 1966, Fom USS of EUA for year 1974: hhibit B-30, Fom USS of EUA for year 1976; Exhibit 10-68, Fom 10-K of EUA for 1984, File tb.1-5366; Exhibit 10-82, Fom 10-K of EUA for 1986, File ] No. 1-5366). Agrement for Joint Ownership, Construction and Cperation of 10-40 William F. Wyman Unit No. 4 dated November 1,1974 as mende June 30, 1975, August 16, 1976 and December 31, 1978 mong Central Maine Power Cmpany and other utilities including Montaup (Exhibit B-9, Form USS of EUA for year 1974: Exhibit i 13-58, Registration tb. 2-55990: Exhibit 5-95, Registration No. 2-58625: Exhibit 5-40, Registration No. 2-69052). Transmission Agrement dated Novmber 1, 1974 amng Central 10-41 Maine Power Conpany and other utilities including Fbntaup with respect to William F. Wyman thit No. 4 (Exhibit B-10, Fom USS of EUA for year 1974). Agrement for Joint Ownership dated as of October 27, 1970 10-42 between Carul Electric Cmpany and Montaup (Exhibit 13-71, l Registration tb. 2-55990). Agreement for use of Cmmon Facilitics by Canal Units I and II 10-43 and for Allocation of Related Costs dated as of October 27, t 1970 between Canal Electric Cmpany and Montaup (Exhibit 13-72, Registration tb. 2-55990). 1 41 l l

= _ r 10-44 Agre n nt of 1. case dated as of June 1, 1972 betwen Canal Electric Camany and bbntaup (Exhibit 13-73. Registration !b. 2-55990). Supplerntary Pcwr Contract dated as of April 1,1978, by and i 10-45 betwen Connecticut Yankee Atanic Power Camany and Mutaup (Fehibit 10-45, Form 10-K of EUA for 1987. File No. 1-5366). Fuel Oil Centract dated P>teber 28, 1981 and amnded as of 10-46 October 25, 1982 betwen Apex Oil Capar'y and hbntaup (Exhibit 10-55, Fom 10-K of EUA for 1981. File tb. 1-5366: Exhibit 10-76, Registration tb. 2-80205). Eastern Utilitier Associates Enployees' Savings Plan Tmst i 10-47 Agreement (Exhibit 10-57, Fom 10-K of EUA for 1981, File tb. 1-5366). Eastern Utilities Associates P.gloyees' Savings Plan as amended 10-48 and restated effective August 1, 1983 and as amnded as of January 1, 1985, March 1, 1988 and June 19, 1989 (Exhibit 10-53, Fom 10-K of EUA for 1983, File tb. 1-5366: Fxhibit 10-83, Fom 10-K of EUA for 1986, File !b. 1-5366: Exhibit 10-50, Fom 10-K of EUA for 1988. File Ps.1-5366: Exhibit B-3, Fom U-I of EUA dated March 7,1991, File Ib. 70-7829). Guarantee Agrement (composite copy) dated as of Novmber 13, lbu9 1981 between The Connecticut Bank and Tmst Cmpany, as Trustee, and Montaup relating to debentures of Connecticut Yankee Atanic Power Camany (Exhibit 10-61, Fom 10-K of EUA for 1981, File tb.1-5366). Guarantee Agrement dated as of tbvmber 5, 1981 betwen 10-50 Bankers Trust Company, as Tmstee of the Vernon Energy Tmst, and tbntaup relating to a nuclear fuel sales agrement and related transactions entered into by Vemont Yankee Nuclear Powr Corporation (Exhibit 10-63, Fom 10-K of EUA for 1981, File Ib.1-5366). l tbelear Fuel Sales Agrement of Vemont Yankee tbclear Power 10-51 Corporation and related documents (Exhibit B-1, File No. 70-6569). l Phase I Vemont Transmission Line Support Agrement dated as of 10-52 Deceber 1,1981 and as amended as of June 1,1982, Novmber 1, 1982 and January 1,1986 betwen Vermnt Electric Transmission

Cmpany, Inc. and several New England utilities, including Montaup (Exhibit 10-65. Fom 10-K of EUA - for 1981, File tb.

1-5366: Exhibit 10-72, Registration No. 2-80205: Exhibit 10-64, Form 10-K of EUA for 1982, File No.1-5366: Exhibit 10-84 Fom 10-K of EUA for 1986, File tb.1-5366). Agrement with respect to Use of Quebec Interconnection dated 10-53 as of Decmber 1, 1981 and as amended as of May 1,

1982, l

l-Novmber 1, 1982 and June 1, 1990 am,ong several New England electric utilities, including Montaup (Exhibit 10-66, Fom 10-K 42

of EUA for 1981. File tb. 1-5366: Dhibit 10-73, Fegistration tb. 2-80205: Exhibit 10-68, Fom 10-K of El'A for 1983, File !b. '-5366: Exhibit 10-83, Fum 10-K of Eastern Edism for 1990, File No. 0-8580). Phase I Teminal Facility Support Ar, rem ent dated recerber 1, 10-54 1981 and as mended as of June 1, 1982, tbvmber 1, 1982 and January 1, 1986 betwen tku England Electric Tranreissim Corporation and several tkv England utilities, including tbntaup (Exhibit 10-68, Fem 10-K of EUA for 1981. File !b. 1-5366: Exhibit 10-74, Registration ib. 2-80205; Exhibit 10-68, Fom 10-K of EUA for 1982, File !b.1-5366: Dhibit 10-85, Fom 10-K of El'A for 1986, File Ib.1-5366). Additional Pcwr Centract betwen Vem,nt Yankee Nuclear Pcwr 10-55 Corporation and bbntaup dated as of February 1, 1984 (Exhibit 10-69, Fom 10-K of EUA for 1983, File No.1-5366). loan Agrement betwen Rassachusetts Industrial Finance Agency 10 56 and Fastern Edison dated as of August 1,1983 (Exhibit 1, Fom File 'a. 0-8480). Trust Agrement betwen Kassachusetts industrial Finance A ;,ency 10-57 f and State Street Bank and Tnist Capany dated as of August 1, 1983 (Exhibit 2. Fom 10-Q of Eastern Edison for quarter ended Septmber 30,1983, File !b. 0-8480). Escrcu agrement dated as of August 1, 1983 by and mong 10-58 Eastem Edison, FUIC Indmnity Corporation and Bank of New

England, N.A.

(Exhibit 3 Fom 10-Q of Eastern Edison for quarter ended Septmber 30, 1983, File Ib. 0-8480). 10 Second Supplerntary Pcur Contract betwen Fbntaup and Connecticut Yankee Atcmic Power Ccrapany executed on April 5, 1984 (Exhibit 10-70, Fom 10-K of EUA for 1984, File tb. 1-5366). Additional Pcwr Contract between Ibntaup and Connecticut 10-60 Yankee Atcznic Power Ccnpany executed en April 5,1984 (Exhibit 10-71, Fom 10-K of EUA for 1934, File tb.1-5366). loan Agrixrrnt betwen Rhode Island Industrial Facilities 10-61 Corporation and Blackstone dated as of Decmber 1, 1984 (Exhibit 10-72, Fom 10-K of EUA for 1984 File No.1-5366). Trust Indenture betwen Rhode Island Industrial Facilities 10-62 Corporation and the Rhode Island Ibspital Trust Conpany dated as of Decmber 1, 1984 (Exhibit 10-73, Fom 10-K of El'A for 1984, File No. 1-5366). Rmarketing Agrement between Rhode Island Ibspital Trust 10-63 Ccupany, Citibank and Blackstone dated as of Decmber 19, 1984 (Exhibit 10-74, Fom 10-K of EUA for 1984, File Ib.1-5366). 43

i 10-64 letter of Credit and Reimbursment Agreewnt between Blackstone Vallev Electric Cmpany and Citibank N. A. dated as of Decmber 1, 1984 (Exhibit 10 73, Fom 10-K of EUA for 1984, File tb. 1-5366). Agreaaent for Seabrook Project Disbursing Agent, datcd as of 10-65 m y 23, 1984, as awnded March 8,1985 Pay 20,1985, June 18, 1985, January 1, 1986, !bvmber, 1987, August 1, 1989, and restated as of !bvmber 1,1990, amng the participants in the Seabrook nuclear generating project, including Pontaup and Yankee Atmic Electric Cmpany (Exhibit 2, Tom 10-Q of EUA for the Quarter Ended June 30, 1984, File !b. 1-5366: D<hibit 10-69, Fom 10-K of EUA for 1985, File tb. 1-5366: E>11 bits 10-86, 10-87 and 10-88, Fom 10-K of EUA for 1986, File th. 1-5366: Exhibit 10-97, Tom 10-K of EUA for 1987 File No. 1-5366: Dhibit 10-105, Fem 10-K of EUA for 1989, File Ib. 1-5366 Exhibit 10-84, Fom 10-K of Eastern Edison for 390, File tb. 0-8480). 10-66 Preliminaq Quebec Interconnection Support Agreement - Fluse II dated as of Septmber 1, 1984, as amended March 1,

1985, January 1,1986, March 1,1987, July 1,1987. October 15, 1987, Decmber 15,1987, March 1,1988, August 1, 1988, tbvmber 1, 1988, Jaruary 15, 1989,. tbvmber 1, 1989 and April 1, 1990 mong several tw England electric utilities, including Montaup

(&hibit 10-79, Fom 10-K of EUA for 1984, File !b. 1-5366: Dhibits 10-71 and 10-72, Fom 10-K of A for 1985, File Ib. 1-5366: Exhibits 10-98, 10-99, 10-100 e 10-101, Fom 10-K of EUA for 1987, File Ib.1-5366: Exhibit 104 and 10-105, Fom 10-K of EUA for 1988, File tb.1-5366

xhibits 10-97, 10-98 i

and 10-99, Form 10-K of EUA for 1989, File tb.1-5366: Exhibit 10-85, Fom 10-K of Eastern Edison for 1990, File tb. 0-8480). Agrement with respect to Amen &ent of Agreement with respect 10-67 to Use of Quebec Interconnection dated as of September 1,1985 anong several New England electric utilities, including Montaup (Exhibit 10-80, Fom 10-K of EUA for '.985, File No.1-5366). Agreement Authorir'ng Execution of Phase 11 Fim Energy 10-68 of Septenber 1, 1985, mong several New Contract dated as England electric utilities, including Montaup (Exhibit 10-81, Fom 10-K of EUA for 1985, File No.1-5366). i Purchase Agrement tb. EUA 87-1 dated as of January 1, 1987 10-69 between Wellnore Coal Corporation and Montaup,(&hibit 10-71, Fom 10-K of EUA for 1986, File tb.1-5366). Guarantee Agrement dated as of Septmber 23, 1985 between MYA 10-70 Fuel Cmpany and Montaup relating to a loan Agremt of Maine Yankee Atmic Power Gonpany with MYA Fuel Cmpany (Exhibit 10-84, Form 10-K of EUA for 1985, File No. 1-5366). Guarantee Agrement dated as of August 1, 1985 amcog The 10-71 Connecticut Bank and Tnist Cmpany, Connecticut Yankee Atmtic Pcu r Company and Vontaup Electric Cmpany relating to 44 l l . _, _ _. _, -.. _ _ -, _ -. - ~ _.

Revolving Credit 1. cans of Connecticut Yankee (F4 1 bit 10-P5, Fom 10-K of EUA for 1985. File tb.1-5366). t' w England Pcwer

e. Facilitica Support Agreerent Phase 11

'0-72 dated as of Jur.e 1,1985, between Nw England Pcwr Ccqmny and several thw England electric utilities, including Fbntaup as amended as of May 1,1966, February 1,1987, June 1,1987 ard Septaber 1,1987 (F21 bits 10-89 and 10-90, Fom 10-K of E'% for 1986 File !b.1-5366: Exhibits 10-102, 10-103 and 10-106, Fom 10-K of.:UA for 1987. File tb.1-5366). Phase II New Hanpshire Transmission Facilities Suaport 10-73 Agrement dated as of June 1,1985 betwen ikv England iydro Transmission Corporation and several New England electric utilities, including Montaup as amended as of Ray 1, 1986 February 1,1987, June 1,1987, Septmber 1,1987 and October 1,1987 (Exhibits 10-91 and 10-92, Fom 10-K of EUA for 1986, File ib.1-53k Exhibits 10-105, 10-106, 101-107 and 10-108, Fom 10-K of EUA for 1987. File No.1-5366). t Phase II Massachusetts Transmissien Facilities Supprt 10-74 Agreement dated as of June 1, 1985, betwen thw England Hydro-Transmission Ccupany and several New England electric utilities, including tbntaup, as anwnded as of May 1, 1986 February 1,1987 June 1,1987, Septmeer 1,1987 and October 1,1987 (Exhibits 10-93 and 10-94, Form 10-K of EUA for 1986, File No. 1-5366: Exhibits 10-109, 10-110, 101-111 and 10-112 Fom 10-K of EUA for 1987, File Ib.1-5366). Phase II Boston Edison AC Facilities Support Agrement dated as 10-75 of June 1,1985, betwen Boston Edison and several tbw Dyland electric utilities, including Montaup as amended as of May 1, 1986, Febnsary 1, 1987, June 1, 1987 and Septenber 1, 1987 (Exhibit 10-95, Fom 10-K of EUA for 1986, File tb. 1-5366 (Exhibit 10-95, Fom 10-K of EUA for 1986, File tb. 1-5366: Exhibits 10-119, 10-113, 101-114 and 10-115, Fom 10-K of EUA for 1987, File No. 1-5366). Equity Funding Agrement for New England Hydro-Transmission 10-76 Corporation dated as of Jur.e 1, 1985, betwen New England Hydro-Transmission Corrration and several New England electric u'tilities, including Fontaup as amended as of May 1,1986 and Septmber 1,1987 (Exhibits 10-96 and 10-97, Fom 10-K of EUA i for 1986, File Ib.1-5366: Exhibit 10-116, Fom 10-K of EUA f' 1987, File Ib.1-5366). Equity Funding Agreement for New England Hydro-Transmissicn 10-77 Electric Canpany, Inc, dated as of June 1,1985. betwen New England Hydro-Transmission Electric Conpany, Inc. and several New England electric utilities, including Montaup as anended as of May 1,1986 and Septmber 1,1987 (Exhibits 10-98 and 10-99, Fom 10-K of EUA for 1986, File Ib. 1-5366: Exhibit 10-117, Fom 10-K of EUA for 1987, File tb.1-5366). l 45 [ l- = - -

10-78 Agreerrnt to Share Certain Costs Associated with the Tewksbury Seabrook Transmission Line dated as of May 8, 1986, areng NEPOOL participants, including dbruaup (Fxhibit 10-100, Fom 10-K of EUA fer 1986, File tb.1-5366). 10 Unit Pcur Agreement for the Sale of Unit Capacity and Energy fr:n Ocean State PoWr Project to Montaup Electric Carpany dated as of Kiy 14, 1986 as amended as of August 27, 1986, Septenber 27, 1987, October 21, 1908, July 21, 1989, Febmary 1,1990 and Decenber 21, 1990 (Exhibits 10-101 and 10-102, Fonn 10-K of EUA for 1986, File No. 1-5366; Exhibits 10-106 and 5 10-107, Fom 10-K of EUA for 1988, File tb. 1-5366; Exhibit 10-106, Fom 10-K of FUA for 1989, File tb. 1-5366; Exhibits 10-86 and 10-87, Fom IC-K of Eastem Edison for 1990, File !b. 0-8480), 10-80 Power Purchase Agrement dated as et xtober 17, 1986, betwen !brtheast hergy Associates and Montaup as mended as of June 28, 1989 (Exhibit 10-103, Fom 10-K of Ela for 1986, Filr tb. 1-5366; Exhibit 10-103, Fom 10-K of EUA for 1989 File tb. 3 1-5366), ( Stock Purchase Agreement dated as of December 10,. ' 16, anong 10-81 Eastem Utilities Associates, Citizens Corporation and Citizens Energy Corporation (Erhibit 10-104, Form 10-K of EUA for 1986, File No. 1-5366). Unit Sales Agreerent betwen Fbntaup Electric Company and 10-82 !tssachusetts Municipal Wholesale Electric Company for Purchase of Capacity and Energy fran Canal tb. 2 dated as of ibvember 1, 1986 (Exhibit 10-105, Fom 10-K of EUA for 1986, File tb. 1-5366). Agreement of Purchase and Sale between Maine Public Service 10-83 Canpany and EUA dated April 7, 1986 (Exhibit B-9, File tb. 70-7161). Agrement of Purchase and Sale between Fitchburg Gas and 1S-34 Electric Light Ccnpany and EUA dated April 8, 1986 (Exhibit u 1, File No. 70-7251). Addeidra to Agreement of Purchase and Sale, dated June 30, 10-85 1980, cong Bangor Hydro-Electric Company, EUA and ECA Powr Corpwation (Exhibit B-6(a), File tb. 70-7161). 10 Addendum to Agrement of Purchase and Sale, dated June 23, 1986, among Central Maine Power Company, EUA and EUA Power Corporation (Exhibit B-7(a), File No. 70-7161). Addendum to Agrement of Purchase and Sale, dated June 27, 10-87 1986, among Central Vemont Public Service Corporation, EUA and EUA Power Corporation (Er.hibit B-8(a), File !b. 70-7161). y 46 ) 3/8 ~ 6 a

10-88 Addendum to A,:;reement of Purchase and Sale, dated June 26, 198', among mine Public Service Campany, EUA and EUA Powr Colporation (Exhibit B-9(a), File No. 70-7161). 10-89 Addendum to Agrement of Purchase and Sale, dated June 30, 1986, amng Fitchburg Gas and Electric Light Capany, El% and EUA Power Corporation (Exhibit 7, Fom 10-Q of EUA for the Quarter Ended June 30, 1986, File No. 1-5366). Purchase Agreement for the purchase of coal dated as of July 1, 10-90 1988 betwen United Coal Conpany and Montaup (Exhibit 10-108, Fom 10-K of EUA for 1988, File tb.1-5366). Service Agrement dated as of December 20, 1988 bdwen EL% 10-91 Service Corporation, Ocean State Power and EUA Ocean State (Exhibit 10-109, Fom 10-K of EUA for 1988, File No.1-5399). Sett1 ment Agrement dated as of January 13, 1989 among 10-92 Montaup, EUA Pcuer, certain past and present owners of the Seabrook Project and Yankee Atmic Electric Cmpany (F2hibit if 110, Fom 10-K of EUA for 1988, File No.1-5366). Interconnection Agreenent by and between Blackstone and Ocean 10-93 State Power dated Novanber 1, 1988, as mended and restated effective August 16, 1989 by and mong Blackstone, Ocean State Power I and Ocean State Power II (Exhibit 10-100, Fom 10-K of EUA for 1989, File No. 1-5366). Powr Purchase Agreanent between Blackstone and Blackstone 10-94 Hydro, Inc. dated as of January 8, 1989 and vssigment to Pontaup (Exhibits 10-101 and 10-102, Fom 10-K of EUA for 1989, File No. 1-5366). Unit Power Agreement for the Sale of Second thit Capacity and Iv-95 Energy from Ocean State Powr Project to Montaup Electric Company dated as of Septaber 28, 1988 as amended by an amenchent dated July 21, 1989, and February 7, 1990 and a Supp1 mental Agrement dated July 21, 1989 (Exhibit 10-104, Fom 10-K of EUA for 1989, File No.1-5366: Exhibit No. 10-88, Fom 10-K of Eastern Ediscn for 1990, File No. 0-8480). Ocean State Power Amended and Restated General Partnership 10-96 Agreement anong EUA Ocean State, Ocean State Powr Company, TCPL Power Ltd., Narragansett Enerp Resources Canpany and NECO Power, Inc. (collectively, the ' OSP Partners") dated as of December 2, 1988, and First Amendment thereto dated as of March 27, If 39 (Exhibit 10-107, Fom 10-K of EUA for 1989, File No. 1-5366). 1(, '7 - Assignment and Security Agreanent between EUA Ocean State and Irving Trust Company dated as of December 29, 1988 and Amendment No. 1 thereto dated as of September 29, 1989 (Exhibit 10-108, Fom 10-K of EUA for 1989, File No.1-5366). 47

10-98 Equity Contribution Agreanent among EUA Ocean State Pcwr, the OSP Partners including EUA Ocean State, and Irving Trust Canpany dated as of December 29, 1988 and Amendnent tb. 1 thereto dated as of Septmber 29, 1989 (Exhibit 10-109, Fom 10-K of EUA for 1989, File No. 1-5366). 10-99 Fquity Contribution Support Agreement a: Tong EUA, Ocean State Powr and Irving Trust Conpriy dated as of December 29, 1988 and Amendnent No. 1 thereto dated as of Septmber 29, 1989 (Exhibit-10-110, Form 10-K of EUA for 1989, File No. 1-5366). 10-100 - Ocean State Pcsur II Amended and Restated Gereral Partnership Agreement among EUA Ocean State, JMC Ocean State Corporation, mkowski Powr, Inc., TCFL Powr Ltd., Garragansett Energy Resources Company and Nesport Electric Pcwr Corporation (collectively, the "0SP II Partners") dated as of September 29 1989 (Erhibit 10-110, Fom 10-K of EUA for 1989, File Ib. 1-5366). 10-101 - Assignment and Security Agreement betwen EUA Ocean State and The Bank of New York dated as of Septecber 29,1989 (Exhibit 10-112, Fom 10-K of EUA for 1989, File No.1-5366). 10-102 - Equity Contribution Agreement arong Ocean State Power II, the OSP.II Partners including EUA Ocean State and The Bank of New York dated as of Septaber 29, 1989 (Exhibit 10-113, Form 10-K of EUA for 1989, File No. 1-5366). 10-103 - Equity Contribution Support Agreenent among EUA, Ocean State Powr II and The Bank of New York dated as of Septenber 29, 1989 (Exhibit 10-114, Fom 10-K of EUA for 1989, File No. 1-5306). 10-104 - Servi:e Centract among EUA Service Corporation, Ocean State Powr II ~1d EUA Ocean State dated as of Septarber 29, 1989 (Exhibit 10-115, Fom 10-K of EUA for 1989, File No.1-5366). 10-105 - Precedent Agreement dated as of November 29, 1989 betwen EUA and NE00 Enterprises, Inc. (Exhibit B-4, Form U-1, File No. 70-7677). 10-106 - Amendnent to and Restatement of Stock Purchase Agrement dated as of February 1 1990 between EUA, NECO Enterprises, Inc., Newport Electric Corporation and a special-purpose subsidiary of EUA for the acquisition by EUA of the stock of Nwport Electric Corporation (Exhibit B-3, Forn U-1, Fil'e No. 70-7677). 10-107 - Purchase Power Contract between Newport and 'Ihe Connecticut Light and Power Capany-Gas 'Ibrbine Units (South Meadow), December 1, 1985 through October 31,1991 (Exhibit 10-107, Fom 10-K of EUA tor 1990, File No. 1-5366). 10-108 - Purchase Power Contract between Nesport and Montaup dated July 23, 1963, as revised on March 23,1983 (Exhibit 10-108, Fom 10-K of EUA for 1990, File No. 1-5366). 48

_m_ i e i j 10-109 - Purchase Powr Contract betw*n Newport and Ebntaup for i Centract Demand Service offective May 1, 1983, as amended on July 1, MS3, Decerber 28, 1983 and Noveber 1, 1984 (Exhibit 10-89, Fom 10 K of Eastem Edison for 1990, File No. 0-8480) (Exhibit 10-109, Fom 10-K of EUA for 1990, File No.1-5366). 10-110 - letter amendment dated August 4, 1983 reallocating the participating shares originally assigned to the Chicopee 4 Municipal Lighting Plant and the Taunton FLricipal Lighting Plant under the Phase I Vement Transmission Line Support Agreement between Vemont Electric Transmission Ccnpany, Inc. and several New England electric utilities, including Newport, dated Deceber 1,1981, as amended on June 1,1982 and Novenber 1,1982 (See Exhibit 10-52) (Exhibit 10-110, Fcrm 10-K of EUA for 1990, File No. 1-5366). 10-111 - letter of Assurance in connection with the Credit Agreenent between Vernent Electric Transrdssion Cmpany, Inc. and Bank of America National Trust and Savings Association dated July 19, 1983 (Exhibit 10-111, Fom 10-K of EUA for 1990, File No. 1-5366). 10-112 - letter amendment dated July 29, 1983 reallocating the participating shares originally assigned to the Chicopee Municipal Lighting Plant and the Taunton Municipal Lighting Plant under the Phase I Terminal Facility Support Agreenent between the New England Transmission Corporation and several New England electric utilities, including Newport, dated December 1,1981, as amended on June 1,1982 and tbvmber 1, 1982 (See Exhibit 10-54) (Exhibit 10-112, Fom 10-K of EUA for 1990, File No. 1-5366). 10-113 - Letter of Assurance in connection with the Credit Agrement between the New England Electric Transmissicn Corporation and The First National Bank of Boston dated July 19,1983 (Exhibit 10-113, Fom 10-K of EUA for 1990, File No.1-5366). 10-114 - Unit Power Contract between Newport and New England Power for purchase of 15 FM of pcuer for a ten year period starting Novmber 1, 1985 and ending October 31,1995 (Exhibit 10-114, Fom 10-K of EUA for 1990, File No.1-5366). 10-115 - Purchase Power Contract between Newport and City of Burlington Electric Department (life of the unit contract) for purchase of 8 FM frm Joseph C. McNeil Electric Generating Station located in Burlington, Vermont dated December 19,1984 (Exhibit 10-115, Form 10-K of EUA for 1990, File No.1-5366). 10-116 - Firm Energy Contract between Hydro-Quebec and several New England electric utilities, including Newport, dated ap of October 14, 1985 (Exhibit 10-116, Form 10-K of EUA for o '0, File Ib.1-5366). 10-117 - Unit Power Agreement for the Sale of Unit Capacity ant fp.gy from Ocean State Powc Project to Newport Electric Corporat ion 49

- - - - - -. -.~ - dated May 14, 1986, as amended on - August 20, 1986, July 11, 1988, Septeder 23, 1988, October 21, 1988, July _21,

1989, February 7, 1990 and Decenber 21, 1990 (Exhibit 10-117, Form 10-K of EUA for 1990, File No. 1-5366).

10-118 - Unit Power Agreenent for the Sale of Second Unit Capacity and Fnergy from Ocean State Pow r Project to Newport Electric Corporation dated July 12, 1988 as amended Septeder 23, 1988, July 21, 1989 and February 7, 1990 (Exhibit 10-118, Fom 10-K of EUA for 1990, File No. 1-5366). 10-119 - Purchase Power Contract dated as of April 1, 1073 between Montaup and Newport for shares of Maine Yankee, Veracnt Yankee, and Pilgrim (Exhibit 10-119, Fom 10-K of EUA for 1990, File tb. 1-5366).

10-120 - Fifth Amendment to Exhibit 10-48 dated as of January 1,1992.
10-121 - Fifth Amendrunt to Exhibit 10-2 effective as of July 1,1991.
10-122 - Sixth Amendnunt to Exhibit 10-2 effective as of Septmber 2, 1991.
10-123 - Seventh Amendrnent to Exhibit 10-2 effective as of March 1, 1992.
10-124 - Equity Maintenance Agreement dated as of October 29, 1991 among EUA and The Prudential Insurance Cmpany of America and Pruco Life Insurance Cmpany.
10-125 - Guaranty, dated January 16, 1992 made by EUA in favor of John

't Harcock Mutual Life Insurance Cmpany.

13-1

- Annual Report to Shareholders of EUA Cor 1991, portions of which are incorporated by reference in this Annual Report on Fom 10-K. Only the portions expressly so incorporated under PART II, Itms 5, 6, 7 and 8 are to be demed filed herewith. Direct subsidiaries of Eastern Utilities Associates and the 22-1 state of organization of each are: Blackstone Valley Electric i Cmpany (Rhode Island), Eastem Edison Cmpany (Massachusetts), EUA Fower Corporation (New Hm:pshire), EUA Cogenex Corporation (Masuchusetts), EUA Service Corporation (Massachusetts), EUA Ocean State Corporaticn (Rhode Island), EUA Energy Investment Corporation (Massachusetts) and Newport Electric Corporation (Rhode Island). Montaup Electric Company (Massachusetts) is a subsidiary of Eastern Edison Company. Each of the above subsidiaries does business under its indicated corporate rane. Consent of Independent Certified Public Accountants.

24-1 (b) Reports on Form 8-K.

- On February 27, 1992, the Registrant filed a current report on Fom 8-K with respect to Its 5 (Other Events). 50

On Febnaarv 26, 1992, the Registrant filed _ a current report on Fom 8-K sdth respect to Itm 5 (Other Events), i On December 12, 1991, the Registrant filed a current report cn Fom 8-K with respect to Itm 5 (Other Events) and Itm 7 (Financial Statments, Pro Foma Financial Infomation and F.xhibits). On tbvmber 15, 1991, the Registrant filed a current report on Tom 8-K with respect to Item 5 (Other Events) and Item 7 (Financial Statments. Pro Foma Financial Infomation and Exhibits), i l l I l 51 1

SIGNATURES Pursuant to the. requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Sicnature Title Date EASTERN IIITLITIES ASSOCIATES Cmptroller By Richard M. Burns (Principal Accounting Officer) March 25, 1992 Richard M. Burns Pursuant to the recuirements of the Securities Exchange Act of 1934, this report has been signed be'cv by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Chairman and Chief Executive Officer _ Donald G. Pardus (Principal Executive Officer) Donald G. Pardus and Trustee President and Chief Operating Officer John R. Stevens (Principal Financial Officer) John R. Stevens and Trustee / / Cmptroller / Richard M. Burns (Principal Accounting Officer) / Richard M. Burns Russell A. Boss Trustee Russell A. Boss Paul J. Choquette, Jr. Trustee Paul J. Choquette, Jr. hMarch 25, 1992 John E. Conway Trustee ~ John E. Conway Peter S. Damon Trustee Peter S. Damon Trustee John F. G. Eichoni, Jr. Peter B. Freeman Trustee i Peter B. Freeman Wesley W. Marple, Jr. Trustee Wesley W. Marple, Jr. Margaret M. Stapleton Trustee-Margaret M. Stapleton W. Nicholas Thorndike Trustee i W. Nicholas Thorndike 52

--... = -. -. - 4 EASTET6 !JrILITIES ASSOCIAms n,T) SUBSIDIARY CLEPANIES Item 14(a)(2). Financial Statcnmt Schedules h P h I t l '. l I. l l- !~ L l-l -- l 53

~ 7 a 6-i 6 i [This page left blank intenticnallyl 5 h l 1 9 e f-, itl' l L l ', I l 54 4--u-

iwT

--*r a v-y -w.,n,. v, e-o ,y-I"

1 WJule V Eastern Utilities Associates and Subsidiary Companies Property. Plant and Equipment - (In Thcusands) COL A COLB COL C COL D C OI. E COL F Balan= at Other Charges Halanx at Beginning Additions Add (Deduct) - End of Classification of Period at Cost Re tirements. Desenbe Perud For the Yeat Ended December 31,1991: Production Nuclear. $367.562 $689 $503 $367.748 Production -- Steam 132.527 3.888 12.792 (a) (2)(b) 123.621 Production -- Hydraulic 7.083 7083 Produc' ion -- Other 7,467 399 215 (26)(b) 7.625 - Transtnission and Distnbution. -. 388.987 20.621 6.599 26 (b) 403.035 Genetal P1 ant __ 55.539 1.932 108 (40)(b) 57.123 intangible Plant.. 566 42(b) 608 Electne PropertyI!cid for Future Use.. 824 824 Nuckar Fuelin Senice 15.557 6.343 (c) 3.043 18.857 Construction Work in Progress, 6.809 71 6.880 Nucleat FueI in Process 9.026 (5.023)(c) 4.003 Total Utahty Plant . = 19m4L $25.921 J2A2(q $4 $9Mh07, i _ _ ~ Non-Utility Property 143R3L $10J11. $1 Jg

M1244, 1

For the Year Ended December 31.1990: Produr*. ion Nucicar _ $177.658 $688,750 (d) $96 ($498.760) $367.562 Production -- Steam. 130.605 1.219 $53 1.256 132.527 Production -- Hydraulic.. -- 7.011 72 7.083 Production -- Other-- 4.454 224 48 2.837 7.467 Transmision and Distnbution. 314.711 35.355 5.658 44.579 388,987 Ocneral Plant _ 45.519 10.237 347 130 55,539 Intangible P1 ant. 253 752 109 (330) 566 Electric Property Held for Fwure Use. 608 216 824 Nuclear Fuelin Senice 7.015 8.542 (d) 15.557 Construction Wsrk in Progress. 636.691 (630.301)(d) 419 6.809 Nuclear Fuelin Process 38.157 (855)(d) (28.276) 9.026_ Total Utility Plant 1132h3g. In193J. $ MIL J3477.857)(e) _ 3991 94_7, 3 Non-Utility Property $2&I4R IM24 _E $41023_ For the Year Ended Decembedt,1989: Production Nuelear_. $177.247 $569 $156 ($2) $177.658 Produenon -- Steam 129,730 3.513 127 (2,511) (f) 130.605 Production -- Hydraulic 6.527 74 410 7.011 Production -- Other 4.438 21 5 4.454 Transmission and Distribution. 300.630 17.327 3.179 (67) 314.711 General Plan' 42.753 2.968 186 (16) 45.519 intangible Plant -- 253 253 Electnc Property He!J for Future Use. 608 608 Nuclear Fuelin Senice 9.006 334 (2.325)(g) 7.015 Construction Work in Progress 457.706 125.265 53.720 (h) 636.091 Nuclear Fuelin Process 78,108 18J49 (58.300) (i) 38.157 Total Utility P1 ant._ ~.__ $1.1021% 5MLi20_ SM32_ (19mJ $132462. Non-Utility Property WT7( $1M $31 SMIL (j) $X75 (a) Retirement of Montaup (Units 1 thru 4) $12.370.758. (b) Transfer between accounts. (c) Transfer nudear fuel from in Process to in Scnice. (d) Transfer of Seabrook to Plant in Service ($498.760,000 & $190.000.000 of EUA Power and Montaup respectively) from CWIP. (c) Includes the beginning balances of Newport Electric Corporation as of 4/1f)0 aggregating $63.821.000 and the deconsolidation - of EUA Power's ending balances aggregating $541.811.000 at 12/317)0. (See Footnote B of Notes to Consolidated Financial Statements of the Registrant's Annual Report to Shareholders for the year ended December 31,1990.) (f) Net DCA credits transferred to Construction Work in Progress. (g) Transfer of nuclear fuel from in-service to spent nudear fuel. (h) Net OCA Credits to Construction Work in Progress of($4.580.000), reclassification of purchase price and associated capitalized interest. (See (f) above.) Reclassilation of nuclear fuel for Re -load No. 3 ($4.580). (i) Reclassification of purchase price allocation and related allowance for funds used dunng construction. (J) Transferof Land. 55

Schedule V1 Eastern Utilities Associates and Subsidiary Companics Accumulated Depteciation, Depletion and Amortization of Property, Plant and Equipment (in Housands) Column A Column B . Column C Colamn D __ Column E Column F Other Additions Charges Balance at Charged to Add llalance at Beginning Costs and (Deduct) - End of Description of Period _ Expenses Retirements _ Describe Period i For the Year Ended December 31,1991: Accumulated Depreciation, Depletion and Amortization __$24L121 $31444_ $2 LOR ($$7)(a) _32iL101 Nonutility Property $6a n $620L _ $0. (592)(b) _$13.041 For the Year Ended December 31,1990: Accumulated Depreciation Depletion and Amortization $201990_ $19,310_ $537_1_$6486_ (c) J24L128 Nonutility Property 5221L $LQ22. $1, m __$6.9R For the Yeat Ended December 31,1989: Accumulated Depreciation, Depletion and Amortization __113LQ49_ $21300_ $LBR $ L91(d) $20L990, Nonutility Property SML $2.0fL $11 _12311 (a) FERC audit adjustment due to change in rates, ($57,000) (b) Depreciation adjustment on project equipment sold or traded in. (c) Depreciation of Office Furniture transferred from deferred debits,($101,000) and FERC audit adjustment due to change in rates ($57,000). Also includes the beginning balance of Newport Electric Corporation as of 4/180 of $16,005,000 and the deconsolidation of EUA Power's ending balance of $9,161,000 at 12/3190. (d) Principally the amortization assoctated with the reclassificat.on of nuclear fuel 56

Shedule X111 Eastern Utilities Associates and Subsidiary Companies Valuation and Qualifying Accounts (in Housands) Column A Column B Column C Colum_n D Column li Additions (1) (2) Balance at Charged to Charged Balance at Beginning Costs and to Other Deductions - End of Description of Period ___ Evenses Accounts Describe _ Period For the Year Ended December 31,1991: Allonnce for Doubtful Accounts $731 __ $9131 $3Q (a) __$1JQ$, (b) _$71L 1 For the Year Ended December 31,1990: Allowance for Doubtful Accounts $221 _ _ $till $& (a) $70Q (b) ___$7Al For the Year Ended December 31,1989: Allowance for Doubtful Accounts $219 1391 $44.(a) $gl(b) i___$29L (a) Recoveries of accounts previously written off. (b) Principally Accounts Receivable wTitten off. 57

.~ --...... ~. ....-- - ~. u Schedule IX a Eastern Utilities Associates and Subsidiary Companies 'Short-Term Borrowings i (in Housands) t COLUMN A COLUMNB COLUMN C COLUMN D COLUMN E COLUMNF Maximum Average Weighted Category of - amount amount average - aggregate Balance Weighted outstanding. outstanding Interest rate short-term latcod Average during - during the. during the - _ of period interest Rate the period period (a) . period (b) f borrowinzs Notes Payable 1 to Banks: i December 31, 1991 $118.449_(c) 5.6% $118,449 $E2$3_ 61%. l. 1990 $43.071 9.8% .3102,3.91 $71906, 8.6%, l . 1989. $18416. 9.5%. $91489_ $69.93% 9.8% p l (a) De average amount outstanding during the period was computed by dividing the summation of the wighted daily principal balances outstanding by 365. - (b) He mighted average interest rate during the period was computed by dividing the actual - interest expense by the daily average short-term debt outstanding. r i. (c) Includes $46 million of EUA Ocean State's outstanding notes payable to banks classified as long-term debt for financial reporting purposes. See Note II, Notes to Consolidated Financial Statements. lL 58

6 1 Schedule X Eastern Utilities Associates and Subsidiary Companies Supplementary Income Statement Information COLUMN A C 01.U M N H For the Years Ended December 31, 1991 1990 1989 Charged to Costs and Expense (In ibousanas) Taxes -- Other than Income: (a) EUA Pour Corporation...... $0 $644 Newport Electric Corporation. 3,413 2,313 EUA Cogenex... 238 50 $35 EUA Service Corporation. 1,822 1,718 1,537 Blackstone Valley Electric Company.. 9,403 8,390 7,922 Eastern Edison Company........... 3,529 2.913 2,804 .~ 8_43_ Montaup Eleetric Company._............ 5.068 4.298_ 3 Total........ 23,473 20,326 16,141 Less: Charged to Other Accounts... 987 65 (357) Charged to Operating Expenses._. _122.4M. .__$20,26 L $16A91. Amounts of rents, advertising ( sts and research and development costs did not exceed 1% of grou revenues. Amounts of maintenance and repairs and depreciation expense wre as shown in the income statement and notes thereto. 1 Local NOTES: (a) Payroll Property Corporation Sales and j Taxes Taxes Tax Use Tax i For the Year Ended December 31,1991: Newport Electric........ -- 392 726 $2.283 $12 EU A Coge ne x...,...._ 238 1,601 221 EUA Setvice.... Blaekstone. . ~. -...... 611 3,177 5,615 i Eastern Edison.. _.... 1,218 2,308 3 Mo n ta up.. 715 4.337 16 Total $4J71. $19269 17298_ $1L For the Year Ended December 31,1990: EUA Power.... __.... $135 $509 Newport Electric..... _. 194 513 $ 1,602 $4 EUA Cogeacx. 50 EUA Se rvice..............-... _.. 1,489 229 l Blackstone........ 413 3,083 4,894 Eastern Edison 774 2,114 25 Montaup 529_ 3,749 20 Total. 53.584. _ 310l 92 $M9ft 149 DecemberII,1989: EUA Coge nex... $29 $1 $5 l EUA Se rvice _.............. _... 1,296 228 13 l Blaekstone.. 428 2,706 $4,788 Eastern Edison....._.. 729 2,073 2 Montaup.... 462 3.367 14 Total._... $1934 $8171. 14J R 334 59

a 4 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Trustees and Shareholders of Eastern Utilities Associates: Our report on the consolidated financial statements of Eastern Utilitics Associates and subsidiaries (which includes an explanatory paragraph with respect to uncertainties regarding an SEC review, shareholder litigation, and bondholder litigation) has been incorporated by reference in this Form 10-K from page 36 of the 1991 Annual Report to Shareholders of Eastern Utilities Associates. In connection with our audits of such consolidated financial statements, we have also audited the related consolidated financial statement schedules listed in the index on page 32 of this Form lO-K. In our opinion, the consolidated financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein. COOPERS & LYBRAND Boston, Massachusetts March 11, 1992 60}}

ML20101M013

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