ML20216D924

Forwards 1986 Annual Repts for Joint Owners Identified in Encl

ML20216D924
Person / Time
Site:	Seabrook
Issue date:	06/23/1987
From:	George Thomas PUBLIC SERVICE CO. OF NEW HAMPSHIRE
To:	NRC OFFICE OF ADMINISTRATION & RESOURCES MANAGEMENT (ARM)
Shared Package
ML20216D932	List: ML20216D924 ML20216E046 ML20216E098 ML20216E324 ML20216E368 ML20216E420 ML20216E457 ML20216E508 ML20216E535
References
NYN-87082, NUDOCS 8706300616
Download: ML20216D924 (38)

Text

-,

George S. Thomas

% nm*.cw moom 4

WI i Putse Service of New Hampshire 7 ^

N w Hampshire Yankee Division NYN- 87082 June 23, 1987 United States Nuclear Regulatory Commission Washington, DC 20555 Attention: Document Control Desk

Reference:

Construction Permits CPPR-135 and CPPR-136, Docket Nos. 50-443 and 50-444 Subj ect: Submittal of 1986 Annual Financial Reports

Dear Sir:

Pursuant to 10CFR50.71(b), enclosed is one copy of the 1986 Annual Financial Report for each of the Seabrook Station Joint Owners identified in Attachment A. In cases where the Joint Owner is a subsidiary, the Consolidated Annual Financial Report of the parent corporation is provided.

If you need additional information or copies of these reports, please contact Mr. A. L. Legendre, Jr. at (603) 474-9574, extension 2373.

Very truly yours, C/yh Georg6 S. Thomas Attachments cc: United States Nuclear Regulatory Commission Region I 631 Park Avenue King of Prussia, PA 19406 Mr. Antone C. Cerne NRC Senior Resident Inspector Seabrook Station Seabrook, NH 03874 p;P3ned8188lha ebb 1

I(f P.O. Box 300. Seabrook, NH 03874 . Telephone (603) 474-9574

-n.

~  :- l, ATTACHMENT A l

Seabrook Station Joint Owners 1

- Public Service Company of New Hampshire j United. Illuminating Company '

Massachusetts Municipal Wholesale Electric Company New England Power Company Connecticut: Light and~ Power Company (See. Note 1)

Canal' Electric Company (See Note 2)  !'

Montaup Electric Company (See Note 3)

New Hampshire Electric Cooperative, Inc.

Vermont Eletric Generation and Transmission Cooperative  ;

.Taunton Municipal Lighting Plant  ;

Hudson Light and Power Department-Notes:

1. Annual Report for the Connecticut Light and Power Company and its parent company. Northeast Utilities.

I L

. 2. Annual Report for~the parent company Commonwealth Energy. System provided for Canal Electric Company.

I 3.- Annual' Report for the parent company Eastern Utilities Associates provided for Montaup Electric Company.

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I..............  : . . . . . . . .

- , s 3

. . . , e ,

Dear Shareowner:

The placement of Unit 1 into service . customers in 1986. an increase of

., willinvolve some wrenclung rate. 6Epercent.) And when Seabrook '

o -

, regulatory, financial, pobtical and . Unit I comes on Ime.New: Hamp-

-4 , 'e -

986.was_ marked by a se. ries of . competitive changes.In' recognition shire will have ' capacity .to meet its

.P g - <7:

accomplishments ,for Public -

A

.of these changes, the Company hasi growth,in'the midst of a capacity-

t' - Semce of New Hampslure; J plarined a new strategic dire'ction.N shortYegion, f6r some years to come.

6

. Our achievements during the. 9 -

G %'C a -

- 6/

, -%a year are especially signihcintl D,In' July, PSNH ann 6unced 2000, a plan to begin rec 6veiing its

• Pathway -

• W **##,compen

. W "I

' when one considers the fmancial %invesuhent in Sehbrock iniuch a gpw mcreaspgge strain we'vh beerfundei fM5ispftitivh'and/at the'saine time, for severa!'Dffmanndr

~

c

.#** "# 'N '

aito kee

yeais. We are heartened accomplishments,'akho0gh much bp'thes'e}Mregainlinindial s ~E " health' t g , 7altemau.ve fuels."f6r heating

1. i T "" r-

" remains to be'done. ', . M.c k- W d Pithway 2000 also envisions rnajor

- e u .> .H- poses, conservation arid modest .

1.n February, the Company com . ,3

.jei r6'fforts iri mark'bting and cus-X h ~ G of 6E-

. pleted a 5325 million financing"1 e lrtom' r relations, as dis usshd latei rit6ty b.ar ounour servic is rapidlyI 1

s

,  ;, mortgage composed bonds and 6ftaxdef,_ exempt erred ' interest third ;f programs ypetitive.are'a! Major cusiomers readynowunderwa have pollution control revenue bonds. ^

Oshd PSNH intends to implement the 'numer3us~coge6eration'ahd self-The proceeds were used to fund

• rest as'quickly as p' ossible,'on its " ' .g'

'erieration'hltefnatives.Nashua, -

c,. PSNH's final construction obligationTown.,or with regulatory appr6vs!) jtheisEdorid larbist dity 6n' our '

.for Scabrook Unit 1.. ,y ;when necessary. y w W sfcsystem, hs formed a study corn?

9' '

3 uln May, the Company filed a requesi fWe be$ieve'that the elidtric uiidy- ginittee to donsideiits(energy ' N -

u

. with the Public Utilities Commission'Eindustry is undergoing a basic M ptions mc'uding the, formation' l .

7

" .,4 gPUC) for a two-step increase in' itiansf6rriGtion.The"politicaland [ NII. wn numcipalelectric com-

~ f.

retail rates to cover increase.d ., tec6ndmic' forces that revolutionized C.P2"7: E,fecuve f October 1 Concord c S./ q - El

^

,l . , , p1expensesfand investments not associated to ieflect with ' " tiavel in and'even'the rate base hstal 'long-distance shrvideN.H,ampton Electric telep) honetermi; l Company 'se'rvic' A Seabrook.The first step of this ~ 4 are how'beginning to' focus tip6n i . jpated theitjotal requirements n:

e mg increase, representing a 14 percent - ouF owri t'egulatory dii'jron r . addition to retail rates went into ,

,. , , effect. subject to refund, on Januar Traditionally, the ' coin ~panies iri'our';Dindust'rp ~

hav 1,1987. A final decision is due from' ';rn6nopolies. In ret'urrifor an exclu" .purchasd the.ir energy nee'ds.

the PUC on'or before July 1 of this '

year;it is the Company's c first power fele2tiic in . ...f withiri sive right, s ' defined 6 ' or E8.upplyfranchise, contracts from to'p'r60idegUNI sources y ther than PSNH.S, mall power;

, . <than  : crease three years. sought

. ' < ,' f in;. [acdiptid base' rates in moreJ' ^'h2rvice territofy, the'obligatioh'is d c6mpanies haN ,  ;.

The c6nstiuctiod of Seabiook Uriit -, electridity to all custorfir's'p/ovidewithin'. ,

e 'that territory,'as well as iegulatiori ..Y. pf altemate.capacitgwithin "our - Q

. .1 and,was finish' thEdNuclear during the summst ' 7dve'r p'rics.Inhereritln this frasch'isg ;sernce ' .- t

' ~

in October, ~

. c Regulato'ry Coinmis' s iori(NRC@,$greenst, Evhich 5onic BbseffeiM.plarge indus,tria,1 customers are ,

~

dlab.el the?re.gulitory[ ~gauemptmg to purchase their.powe.r .

-' Jgranthd..

..p full forty ye.a.r the. .lant, subj.

Ndw n o.peraubir.'e'

. . m .g N..fo.r.ar.i.ips.

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nce were w dfru<nd.e<rstan.

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~c. .a t at. levels.whi.

t

.be. s.e.

on ns. o ., , license .,, e ...y nable.

f th,e e .. . . m sts m an . ,t . ir .m tilit transmiss.. ion T-

. wh,ich m.ust be et m.tio.%

pnor to fulli

.re. . . co.very to eam a o,f co.-,

reasonabl'e'3 M Ltem8Y d... A. ~h. n, e .%.,.%.,eown.-ers still s

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S' PO*ir tesung and,the resolutionJNow% m;. vg,..cc . .,, gas andw y hises ;to heaftheir h67rnes' W A ~

wood.;in pla.ce of electncity. -

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' response of issues regarding emergency 6

. q gc' r'icept'Eiid Ame z.

tie *disfdte.6ena'dit'ibEaliat&p' Mmay po planning. At the date of .1dfiking'p'rEs'sisesnith'

. er,pmducer.s, present a g

this report. fuel has, beEn loaded andjalliig acidsi'th'h'dbuhtr'f'OiUr%({[.uhgu(

pre-operational tests have been 3 p. Pop 5fatidffnGionm'eht libe26 fring they are no all completed. Efforts.to ineet theQi *inciE3 singly'c6rnp6Iitive Es's Tesj u,t conditions of the, opera gability to cogpegitj.tojcfipp ,o,thers/,I; hey are 'currently underway,t,ing license.W'of(c6n6mic ap ode %

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requiled by statela'nd feddrilhw t6'.[We'itie'surhou reco'g'ize, n th6u~gh/ ? strides [ '4 a purchaie?all of their'duthtitj il theyh (fat ths'Compinf terrsIhs'under/2 ithit fo$. in jdreatir j '

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g an, enviro l 6me so chb 5se:The reccht rates that N Gevefe 'finahcial' c onstraints' Until JW imong all itserhploye'es. KrecFE'VjW FSNH lAs)Acit reci0 ired l~y'ths' TSEabr7)ok Udit'f starts"tb ' ' YmanagerhEt audit of the~C6mpa?if ? 3,8

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3 PUC tlo pap r these producers for Msh,rviyfind PSNI.i begiri' pfovidethf ' w st s

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' hig ,cre~atirig t2th.'atir,x. .tiUe finaR. .Z,

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p in t.hs.'pl.a. h. t','the C. .o.in. '. iny f.uinb.l.e'7'coEdti.rred.i.i,th

. ctal in.centives to large and smau. . . < to generate sufficient; cash..to fuUy - .lc'uding. .*Th.is core of competent.c.4 ;. 7'r L . ..-

' ' developers hiikeLand unacceptabiel1 p'ay f$r 6;icihting and oth'er tiusiC lc 'clediEate' d $6fsTNis%ives thkC6m'-UVQ M 'N'

, rate' levels for our customers. In' , ? ness Expe6ses'. Iiithisr ' 6ason, 3:Ipanyss'trodg fo'tinda6cn for dealingGS". 0., .

' fact, the" cost'for'this power'is 'about7 s dsidend papinen'ts oit ' hares.of( q,with fut,ir'eJcha11dn l i a '?'

l

. threeltinics the Company's incre- . comsin and preferred stock,which' This $n'd'ir)(t$d${i6N[beliefive'veNN ' Y ~

mentalcost to generate or otherwise were suspendid in the first , quarter. Ilong heli!'a'nQo'istrVnj;t%f this

• d '19" ' I' buy thy same amount of electricity. of 1984. have not yet be,en_ r..csumedi: /Compaii/isits he.b'ple.Ediplopebs ;1i " ~

PSNilis very concemed about the I

impact of these higher prices. both? .;The Company re,matns committed'.fthroughotit PSNH froiiihe'w'peopli 7^

tog process ,that will permit the .q.T at begirineildiels to our 66st .' MY . 6 1

eon its customers-who retmburse resumptiorrofl divide'nd paymentsQsiasonh'd veterahs,IharFariindei M ? '

PSNH douir for dollar for 'such '

. purchasesJand also on the Com-pany's ability _ to pnce electricity

, ewe are need mind for curr,ful of ent return, 1

? ness shareowhers'-

~

to adcept chinge. We think 'as soohjts possible,. Ho .

s

. coinpetitively.We have been seek- ' riding concern must'be,,our and is. the . - over for'their, . i dedicatiori and praEse'ouf and we thank feU6w'ernployee' i 'G.

h:4 ing changes in the policies and rates continued viability of your in. vest -

establishe'd by the PUC withi

~

rnestlt,present, cash conservau-y you.)helhaia6wners, for your,'. . I 2';'ion respect'to sm'111 power producers _ remainsjtn essentialingredient.in 7 paithrddV5hidtffidult years.Xs 3 and it appears that our. efforts are ' the Company's formula for financial we face the.Ehallenges'that remain. @

now meeting with some success. , recoyery. . ' '

l' 1 -

yodr in'tbrists;as' the. Company's '

' The PUC has placed a moratorium ' To meet our heed f5r externaf

'shireodndrsias dell'as those 'of l'

. on fdture small power producer apit'al 'the Company'is currently- our cdst6ihsis an'd' employees. ivill - , -

i filings and set hearings to deter . . . seeking autholization from the PUG c6ntinue (6.tFever-[srcsent~ -

mine new rate levels. In January, it '.

to issue aJditi6nal debt secdrities:It ' in'our min'ds.L

. dismissed over 200 megawatts of ; ' s anticipated ihat the securities to '

~

i O. 9 ~ .f -

i smau power producer fihngs that be issued wiu be a coinbination of # '

~

' l previously had applied for the . deferred interest third mortgage' [

higher rate. '

bonds and tax-exempt pollution ,

While recognizing the immensity of contr61 revenue bonds. Subject tol- . . .

~

the chauenges which we face, we'. . PUC apprbval, PSNH plans to'use N . Robert J.'H'arrison intend that PSNH prosper in this a portion of the proceeds for non/ ' President and. . '-

increasingly competitive environ- Seabrook related cans' truction ' N f

Chief Executive Ofhcer.

ment. As New Hampshire's energy expenditures and the remainder for.. ~ m - C -

l experts, we plan to maintain our - Sbabrook related costs and . ,

I market leaJership through constant ' expenses. We anticipate that .

attention to senice and aggressive ' extended hearings before the PUC - .

4' . '

~

, markeung. We see the chauenges may occur particularly for that pori . ,

which we face today nut as a spec- tion of the fmincing related to ' John C. Duffett ter but as a tremendous opportunity Seabrook. It is not possible to pre- Executive Vice President and to adapt and succeed. dict when the PUC decision on this Chief Operating Officer <

matter will be issued and,if favor-l able, whether it would be upheld .Mitch 5,1987 on appeal.

It is not necessanly thow com-panics which are the strongest in a ,

reg'ulatsd emironment that wiu also

~

excel when ! aced with competition. ,

As deregulation continue's tb ~

change the electric utthty industry.. -

' we believe it is the compinies . -

which are the most tlexible and .

innovative that wtll do best. We al30 *

~..~

beheve that PSNH has made great - -

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, John P. Edwards, Vice President for .

Public Affairs at the Company since June

!. )

}, 17,1985. Vice President-Corporate {

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-.2*

Communications at Public Service of l Indiana from 1982 to 1985. Community

, {

s Affairs FAanager at Caterpillar Inc.from j

, i g 1976 1982. "Our operating environment is increasingly competitive as a result of public policy decisions at the state and j federallevels . . and competition means that there will be both winners and losers.

We intend for PSNH to be a winner."

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"k. N Seabro'ok Stction'.W'gd N ffinndis', tb e5 amine'the e56nts and 7AdditionaUy NHY is pursuing pfN the development of emergenc.y

- W.fqgp a gg4,pf Qcglf f ,j[$tfie g";w design . ' relevance of Chernobyland of that xcident td th'ethe . <response' plans for the Massachu-

' ,, '. .t'M4 3;".. -

he construcuon of Sea-N Msifety of Seabiook Unit 1.'The ^padel sitts comm0nities-a strategy

, . grya dllqq broo,kgiult,;1ps., completed,0 'c"ohclUdei! that designirsi ins't

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yg7Mg upumngr andyn.10ctobe,rN*tiohlil'diffeie'ncss betifeMth'eWo in 'a~sii6ilafs'ituatioii for 'the '

QegRey.lapry3.4%inis ire sd fundaniehTal~tfiat th'e $ Shorehar6 ~Plini oh'12ng Island.

_ t - @d,YNA  ? %;.; RCi psfireJa L ee %grante!f3ScfvEt'ascidin'tJdoes i6ad'df">iftWe h'asiast'dcidb'tlE tti6 '6fficacyrEtYliIl

'J M .3. N J.yNew H,any '

PRijp19[n thf .yr6'yisuide'cisi6ns of '

r . ,:c ' a F ],3.Q  :,J plaht q fullfortyfyeltrsyaryagemept 6peratinglic j prgan3zati.9p3 usifety'ofMmilafd'tdd/cdfiduthd t

s'Sdabro6k!f 9p@la$t.N@Mthe'Shorshar

-e< ') 7 specific conddI6ns. Underj,ense c g cgh;0ftist w! idr the"CdiEnU6whildi Y. h'oGer,'thethatNRCissb' of a prbp5sedidlen'uking

- d , , ' ,Gl. provisions;fullyNHY NEf Massachusitts has successense, riport'e'd findi6gi- Sould alldw a' planilike Seabrook' Tdl.1 aded fuel and,conduc,te;d a moryth@g$Jhich'c!dsely' paralleled

~

e f8 **l.ips og,ppw;eg,sh diahtj Go0erfor Sun'6riu's panel.fthat,'despite theff,best effdrts, a

,7 rior,to P full power operation, two ' QTh,ese conclusions support the 1 dlack of cooperation of states and

-e i, . Inajor L6riditionidust be meifthe Oc. Cordpany's b'elist th5t Siabrook. ,towris prdvents' full compliance -

F ~

t first of whichis t5jeNife ' app ~ rov' af yUnid,6i piobfbl/the si,feitlhiici,sar)with NRC enfergency planning

, , . : Tfor' low power (not more than five'.tu- . requirements. +

, r

• ")Psicent 6f'cipaicityj testing. Whl.le ,' ) power plant ever past built.Jdly, A. the Comp

~

D$sktNfdcifibie9eIdits.;c5f 5 ' +Nh$

l .a Jhe authonzatign,Jp cgnduct pchj.cEthese' studies, the"Comf6cnwdalth .1. ' released the results of an iride

., ,, . . i.tes mg ha' dbeen expecte'd in yJan(uary, t,he NRC decided tha. 6JF , ~.df Massachusetts'stilliefuses th" 2 V dent

. Jhould ca, n tit MF M plann' @ die n'smd@sf ins effoits' thu oc gIifi NHYwas ddtpe$onM Ci$'PLG.The" to is' sess rnahigement's. per-

• 'r;gthe,quego, n ol duct ctlierae further reyiew of J. responsemplans bmitted [@ust..ge becoripleted su,mergency,ggg; tigatf6thsMays'io'lidense Wi

- s planEAfteTcifefully fproces,itnd t6 revidw the ' cost

.w for th full l e - -  :-

v ne - -

, ~< y:i.t belo..e fowten.,.m.,ile.

r P an.n,in8,zo, g.: oevaluating all option"s r"egarding ?

- re. pop:er testing can .,y ., thd 'emeigelicy re'sp6iis'e 'plah'hing V, schedules'of Seabrook Unit I to g M 'q - . pio ess. NfW filed wft'h the NRC ' ~, determine thelt reasoriableness. ~

e commence,.yg,,d 7 E

- 'J.' - ~1The sbIohdEnditi 6 t! resoldNon Dece'r'nbef18 for 'a'leductioH in*!PLG concluded'that nidnagement

[ tion'of iss0esie'glir' ding'ein'ergenbShaErbok Stadon's 6f'ficiAl ' errirgencyyperformance was ' timely, well con-l S response p ' lids'withih a ten-mile. la (esp 6nsdplanning16ndio a'onb! Osiderdd, and therefore reasonable c 'radi6s'of thEplaiitfc6n'tiiidss'io beWihile ridius'around the ~plarii. ' E. ,' Jand prudent.

>;a sub[edoQrestls'crutink. Thel jNHY'reciufstbd'the c' h'trdEihthe f$ Ai yearkend.PSNH's investment in

. , ,, ., , 7pnncipal problems,tn this area are .jdme'rgency'plannirig zbne following '. Unit I totaled over $1.8 billio N a result of,a lack of co.operatiori by  ;

'the,Co,mmonwedh of Massachu;,(y.a'r'eview h completed byihe Brbbki . Co

~

g setts in th,e emergency planning J. M haveiiTre~o7tIdis 'p prepsred u6 der . c'S30 million each rnonth that'6pera

' efforts for the s,tx hiassachusetts

' 6/cbhirili t'o'ths NRC afts NFW, - ition is dela'yed. While'PSNHs.

, communities witlyr[th'Efep-nul e n-r. zone In. . Sept.e.mb. e.a r th.e, G.o.vem..$ o, TMhske'd -

• th'e'NRC t6(revie@*th'ed'd e * . a < owhership

-- in Se u +, - ;o,f -b,iassach. l et<.r . +:.e. up'da~ted s

- +afe*ty assessment

-- v ofs Sea

- u a signtScant invest' ment, t'he Com-

- ~

u.setts -stao ed. that h. s q1 brook Station preparecf by the%r gpa fir +e b'eheves that Seabrook

..P ~nyv,m!

- ~

w .4nwo

. u.ld < n.s. ..o. .t su emer enc m ' s c ~ "va^te c~ -n-n management and e~ngineerewcapacity is an invaluable resour'ce-

'A. .".

i -

gaesporW . nsjog e

pla,,b.<.mg;4 t,, eja $ff.td Ne#Englaad 'onsiEners' c For m

. sens towns.;mamtainmg[tg$$,M i8g corTsiiltirig'filis diPicidrd @hN4this'r t,r3of'i Lbwe$nd Ga/riclilnc3PLGE

. suc.h

'. Het en Brookhaven~,in

~

~ acc'ordancenth

< w % .

~~- ~

ursue the re" solution "t also.. plans, wou!'d be adequ,,at.e.r a g.g'.:PLGi plegged to f allissues re ass;EMd6t7d

. 7 ior(of thet.,1pgpppose,the. opera y-g .

f51.! owed t.he tinfo,hsfectggri,yggg - mas ~ 6ddEiuM6d'6vshtStatioh .< so'thit

~ - thbj+lant' ll methodolo<gy"and c~onc'lu^s ' ions a p* <4 r'ovidm"g service t% customers m ~ x .

e ta at Chernob}l~1a.v.rtu.nate.ac. e.Pcl. which ' X,.em IE v ~ -

cid.e.nt -

% '. M; a s v% +3 .w h s < m suppor "t of a.reduct"on . *the pra e o s'i -k A .a>

int.enstf.i.dd t.h'.e .st A n.l .v

. genera ~

. concern and, opp...n ~ pub cmqpla+nn+mg~zo~ne.gr,c#.cm. e. o.: ,e,

+

r ,. w.sy N

9 .c.. ..r y omemev wemergency r

. . ,4

%. .. dt.

will a n Pm.Wi ~ A Mc. V albun'd i.r ~8 the'.Qildgd ,%"4 ',;osttion to nuclear.Mt,is T . 1ssue a decisiQn on this Ehn % 4.p.. m .p? 7. y e n,ot To better ury.dergtan C.gernobilc.MRigsdtdsF6f tlitoutE67ie

'- W 4ith . egc- .k<

ng w,NM.iv-- y %, . .,wPW r4A W;#.N<

> - New Ha hn - <-~e c .s a

.u- h, . ; ' +gj.a

• 1. Sun.recognged u.- snu.mpshire Go,vernorJo. e w, 4 ~pd remains s  :

m:, . appo n m-e u e

.W of Ju g. m a.,s .-pecia -

w w&.- .. e c - y

<, m -

nu,cle3ry9 '

c/ experts.Inc! tiding two !(6 bel- pnze'gjgg;.oldritdryBislEto*de$op*W*' a ggg g

1. pJ1NNNm

'. .,. . . w. g w -W.y g g','. <

~

,, 4,U. O, naA,,,J,'C. 4c.L9u..tr.j 8,

n 4, c gme"ygency; 4,"< .x Pr>1a legally.b.

4,tnd.ypsigned p with% h, ment

m. - m ts,

' ,8N.g.4.g#.jF yVw pf sy.u

%4e c ' y. o& ~.

'"2.;g. .rv c

s N.,,m.. e g greemftfre 4

amps to W.m c;mm n.*m C. ; . . . ' -

w. a -I a :$ $%?%g%e,7 fk.Q+ e gW M iddTllTN5 N eEnec '#

. e,"f,.W.Q*;W+&.n

, 'PGy . .,4"tQpLef.fgM,Enei'd

'4%)h.th, N M State iEof ~' N New d ^i ) "?m+

bNS  % JE % ' *E

.s '9@,  ? . .-.,y '&y . .,:?...

$* u s- ;

s

& 4 %4-s e the full teno.le mi zone. -

~. 7<'M e w%vMN*MQ i I*.C 9"D*M

.". C - I1 .Y :  ?

%.[fh Y

E,k

{ h ffh. h fh

+

• W ,~f h Q. s 3

..J W: < O i[f( y.

+ fM, a :.(. MWWM.a&.p%g%o..w.%

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e!

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a ..  :. c 4 f.;,' g rg,,fgi,q

• g e 7, .y . i ,,-. s

( . Pathwap000; .c&Cr.~dh"gl,, 7 mzed on the Compacy's p, ewbboksin pgg p 7pgeshnts,waspog?q,  ;... c M a m -;. w j..

,g%y$

p :-:: . gQ

, g1 '

Q w n

. .,::w.w :wt'f:g.3.;f ob%wigtg.syt Service'ofEcw '~ &qwR,5 :nQ.7}93gjfly)g;M;Q.y.;ph,y.h yn&

a:Mk::c QNty.fzyn,@e ggg gggg,$,3,gg,;_ ,pWe.G.: J lfsh'pshile'Iselieves 'thItMM* t,h,,.e

[FJhefuiuie^tioldigreath

^

Wyomise for bhth the Corn ';!"Fltude,w;as

1. hpinYand theWsideEtD g

~ ne in,t,he ful[tielie'lihat h , gggy, .

as p .1 p

/;> Qh ,,g?PCfS,ag , ,

, p;. g,7 g rg y g .7,;7

.y n h6db'isinessefof egNew Ham %hfr'%".as do.

u in Wegestjnter,es,tj.Tlie PR(w.g'p.prQ; Pi,tftw'ayl2000 i Pompany'ig 4Seabroofep,,rudenc,e audit [esults yp y;g@o y*gfy;q,sgh v..p.y y

gC g;[{.,g

, comprehens.

. i,s,.he

. . at s,harcown. h -

o i . e tve, integrated anticipale drid re'spbnd plan. .to .-

to new '%n' uJ dem.onst.r.a,t.ed

~ 4 th.d to l' ll r:e., . er.s.g %@y ,y.

,.2

wpuld,~ bepptgle coyery ofz.p ,,y .-

W.

'challeng8s and op@t0Mtie's'lwhiieX eSeabrook a ,,investment!Ma ih

.y c j, ,f.,2 4 ;,13 carniBg'on andiecovering ib Sejgmen,t egnclu.ded. h'owever, that }

. .7.9.' .

e rates t J , ,i ;

• lirook Unit Coinp'ihy 1 invest' c'a Neventually ment'so regaili f.O;#to a level tha'twhich thyfully,refle,cte made no sense tdseek,to rais,d ltlicy.,yg

• v-g,'y/q

-.Q:* g; m ./ , '

~

~ ;iMCprppany's imestmgr}t in theseg! ~ -g,... '7  ;~ ' ,c  ;;yg?;yw,',A /. ;.5 y jzg;;jg'; 6 ,. ,

~ nnanc.ia.l

,.o heakiC

a. 5 ~% ~' ' :6 a ,< r

?# w . 4 uru,ts if the resu, lt was, to driveda.. . fu' ' '" .

The Pathway 2000 plan .w/4as a un- C i,Uy cuniiisyk 7.9 -36 M'i r .* a

' *Sii '

. Veded this past summer when PSNH N r- - - W r4 - -

expect 5To ble a ,. - .-

y.

f y.c.p. g -,

an'nb6 tic'ed its proposal for refidcic V.T. he_ Company,

- irig th'c Se'2b' r ook'Stapion investment r

- .f rmal requqst ~

,yfor,thepabrookli ,

'iii retail raics?The Company in'di- greases later tjus y,c,g w,h6 g _ f ,

ntedit w'ould selk five adnualin- s m-semce date p(theplant q more -

,. g;.;.. ,s q c.- ;. g(

j ,

y.,

3 g,s

,,y;M

\

crelsEEof 10 i>srcerii in overall rate. certain. According t.o state law.;t.he

'3;f W .

& ,4 -

levels,'ekclusive'of changes in fuel PUC must reach i .,.,

• d. Q.,-

revenues'thr'ou'gh the Energy Costi ,

. request ightqn months of withm 9 ,.1,Pe n decision on the. . ._

Recovbry MechanisniiECRM), the e the proposed effecuye date con- ,,

f i, _

' receipt of the two-stepil4 percent'. O tain_ed in that h!:ng ,although,th~e ~ , ,

and 7 percent) non-Seabrook in'- first increase may,go i,nto crtect ,

. crease desenbed' earlier, and any under bond and subject to retund . -c-extraordinary or unforeseeable ; '.before that date. State law also - -

events.This proposal anticipates. mandates that no rates be collecte,d

,l Customer Residential'Grow.th e

that t1le Company s sharcow.ners to reflect the Company's investme. nt -

- Annu p u.ntd.ne wdf forego sigmbcant future net . in. Seabrook Unit 1 until the plant :

~

income which they would otherwise ; ts adua!!y providm.g semce to ..n 7 ,i have cipected from ' normal' rate- . customers. As a result, the financial ,.

6 l-making. ' rec very process has been initiated

• 4

. with the announcement of Pathsvav .

A .second element of this fmancial - 2000,'but timing remains uncertaifi.' . .' ,

proposal is a Conipany otter not to ~

As part of Pathway 2000. PSNH,w. ill --

.;

• y 7 _

f;_._

seek recovery of its investment in .

the Pdgrim Unit 2 and Seabrook , als ask the PCC to adopt a long-

, ;3  : _

.g Unit 2 nuclear generating stations- term energy policy and formal - ,,

from New Hampshire cusmmers.

assurances which would a!!aw ; :2 -

At this date Pdgnm Unit 2 has shareowners to benett from the- .

3

~

been irrevocably cance!!eJ. %rk cost advantages of nuclear genera- ,

1 tion when oil prices begin their on Seabrook Urut 2 wa3 h.aed in , o. c 19M and in late me. the jant inevitable move upward once aga.tn.

l ,. l .,

Owners detem'. N.i M r. aquoh The prNipimus drop in fossil tuel ' e e u e so .

that urut's cone " m. ta r prices has made it impossible to , .

e mpeauMy prke xabx,ok powa .;

the NRC anJ ate r ze ?.iiY to begin the .<a:e et a:l -ab.a.;eab e oa a traitimi tulcost rcomy ,,,

• ,'- s-cor'uponents and equ7 ment. The basis. PSNH believes it is important , ,

$MS mi!! ion loss a3wated with t look ahead, though,, and recog- ,

mze that Seabrook was budt to .

meet customers' long-term energy' .

,needs. net just for one period of -

' dropping oil prices.Shareowners are bearing the costs no{viit's only ,

fair that they be allowed to share some of the pronts in the future.

6 ' - -

e

( ~_

.maus.= % ... .

2T ~T C 7~T

~ .-

W rv l.

d ,, .g

, j ms

_: s

(. .

a.,9W T

._l .L

$c.

j 8 \

StLEA ,

i i ~

\.

~

3

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- e , :.

e . - ~.-

)

b Wnt.W * . . ,

,unaw%n, n d', - -+ - 'E _ *

{

,.y . ,

..-..-g

,1 3.--.'

y '4 .

g,

., % ,3'.;

, w-h-

s .cq- . .$ .. }

, Robert J. Harrison, President and Chief .

i Executive Officer of the Company since March 1,1983. President and Chief Operat- w . -

', ing Officer from 1981 to 1983. Thirty pg, , , g ,g., ,,, , , , , .

years of service with PSNH "A major

. , , . f ,g 7 . , ,,, ,,

j strength oIPSNH is its peopte Employees t;, , ,,. ,,,. , ,.3 .

throughout the Company share an inde-y,, l . , , , , , , ,

pendent,'can do' spirit I am looking

,, 7, f (, ,,

forward to the future with optimism , , , , , , , , , , .t. .

because of the confidence level of our

,' . ([,' ,,, ,

people and their willingness to accept g., 3 . , ,a ,

and initiate change." l jgf,, , f,,,

r;.L < < , ,; - .

', .d la 5

J

Oi

+ *,

a b4 $h hea t% FI a 4 .[3 m h rCm0fC IJrmYtc.;j<. l'N'.'ll ha.t d:liver;1 TC' lab!C ClC;ir:C r' , ??r:lig'l:Jul the bCatt::f:tl:'J:C ?? .Ncw Il.:nipshgre for Over smr ',:.ir l.:r:cw:1kcrs like Tem \aliten m !ca l.l: uJnack L%trict scri'i e :be C mf. mis net-Work OfliHCS JU fr'ICS WhiGb I.::C a;rOSS th: 5 Jlg. fryvikng Ct'cr;[y' 10 lbs iliNHS d'il bit 3inCSSC$ Oi.NCW

$ $dH!f$bilC. ,

i f

• m$

e g8 i

^

,,. *y. *f*k , yp f

4. vn. isg*;

. :w , .

$"{;&,. 5, , ,As%'Nh] -

w r:ve r. f@j . *

n. . %, T.:eg wn.#ga. ?.%w , .

l ,, ,, .. . . .

i e "e-l p.N

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I-

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d7 ,g ' 'g , if N ' -

1 s 8. ~ N w

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h* ', .'n [, y d' g

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.el

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\' '

9

%N A , ,

John C. Duffett, Executive Vice President f and Chief Operating Officer of the Com-pany since January 9,1986. Senior Vice President from1982 to 1966. Thirty three

, years of service with PSNH."As we prepare to put Seabrook into service, we are doing everything we can to maximize the benefits of this facility.While most media and investor attention has focused on Seabrook over the years, we have continued to operate the ' rest of the i business'-our utility function-in a

, ', commendable fashion." l

a 1

u

, . c ,Y

- +

7Pathway 2000, continued savings for residentialcustomers '* l

.l

. , . . to industrial seminars and. economic . H,

, . development programs.' - 'i

. s the electric business .- . -

, . . becomes increasingly . Pathway 2000 is PSNIfs plan both I

- , - "c'ompetitive.PSNH musty to deal with some serious threats  !

AM

, 4 4* *; 'and has-started treating , .to our business and to ma.ximize ,

,55 7 _

. ( those it serves m6te like : :.new opportunities:De' spite the ; .g., .

> 0 " V ' Mrlcust6mers,andless liEe 'raiepayers.* _ Co,mpany,s' difficult circumstances . l

' . 'i '" The safe and reliabid' electric servicd',' over thy past few years', manage..

,, ' j , - '$which this Company has'pr6vided lf'. . ment believes thatJt pas a salpable;, ,

3' 'i tcIits'c6siomers for the'past sixty . gesource in employees,w th the E ,

.s

- - -  ;" d ' '

y ars is no longer enough:i6 day; 3. talents and dedication to achieve i 5 N

~

these consiimers also want ser.v NPathway 2000's amby.ious goals..

- t

<  ?' ', - N. fref '.vice and options that meet [ahdO ',This conviction way r uently anticipate, both their R'Y .- ported in a management audit " cons l

ch'anging energy needs and their ; ; ducied by Cresap. McCormick and -

> want their~eldctricg ,Paget (CMP),'an indepercient con n

' budgets:

compahy to reThey'spond t6 their criergy u~sulting firm. In

, . ~

' ~

h r,eport, they noted,'Semor ma,nage-

.'p'roblenis can't sneet tiiese and concerns.

expectations,1, lf PSNH sme6t of PSNp! has been successful d l f d

. ciisiomers'may gendiatiorieveritually' install . looking group eveofopinga executive

~

"self ofg6 elsewhe' rep & .in c u ,

.J:;-

2

? managers committed to achieving

~

- ' , , Manageme i - -

l

.6 > ;PSNH. prosper w, ill.nt. . .

in,th.is.isde. mcreas# t, ermined.#t add. Whefcareful t. eselection ,- corporate' and ^ ob 4 l

.ingly competiuve environment.

• ,* )

7'a.h..e.00P.a. l c +-

th, wa78.0.s . .P an. PS

-- - .t n -

. ~

c - -

.->w- -

- 2. .

.. .'r - -teamwork and a destre to success- -

, f ne* narketing i and customer sgr-J'y fully acc'omplish'tisks"to'the

j vice trutiatives. PSNH s marketing Xben' efit bf ratep'apdrs, sliireh'olders, .

group is developmg a more aggres., .

s

.4 sive customer o. rienta. tion. -

tural and on.entation new 4as~not u,-asdonly, Compariy 7 programs 4ill be tn . troduced . '

Ejdvident'to CMP during the a0dit but Prime ,

kthroughoist1987 < .

.. Sales Growth a E .E.'.l 1so confirmed by many external

~

. hundsows -

3 "1

'3 n'd.er the umbrCla of ay Pathw.'i F observers.This core 6f competent,

,i. s - . 2000, PSNH will offer ctistbmers a . - dedicated persons givds the Com- ~ ~

7 #

, +: ~; i.. 1 larger array.of ot tions to incr'eas%.j pany a sirong foundaiion foi dealing :

' / their. control ctver the time, use 'and ' J,with future challenges.' ' "

6

, l cost of elediric energy.Ne$ proMM ,

. v.1 / "

s will also be offeredio he.lp . 4, . , "t

.,3 . b.,?"' -. ...- -

m O, s. gra. m..; -. ho.w. the. Co :n e r; .

.s . . . . . .L..g..mpanys

,a.%W,., c care

. .9 . . , ' .

> unterests ofi.div. ers.,e . needs,a.nd c m..,e. .

and. . .+. . , . '

... , - . , s. , _ '

yc .: s.: :cce.r.n ~ mfo..r the.. . .. m. m <. 7 -

^.;

W ts tir.oad cu_stomer ?~ .s. s-<

t'% , T . .M....xThif.i l.sy Mr,'.W.o.rkin..g dith '. a.s.gs. .'. yW

9. ', Y, b.(7,- wNy u,Q.[c c -M,w .

.,..y.-,', <m...r an. outside o.ns. ltin .

a -

4, , .- w  : .

y1.

9 p. ..< u n*

. ~y

s. S. . empl_o.y~e. .c.f.ro,. e. , '.u. .,iir., ,-.g ~ vgroup,..

. . . . . . PSNH s @c.

i. 2 .

v e,.. es mt u

.c -

,..r. .%. ~

1

.A E.k.,

m. .

,' ' A . %, .Lo.

J ,r.. ,..ia variety of new.

. . .. d.and m.pa.n. . -

progra.m.s. A. , . .U- ,

.4. ..< y " W,d..e.v.

%. . , ,p' ' ,Mt,,

,, y 1. . : ^6 n .

elo.,p -

"v..-

l.. , J. D.

t "fou m .7,9 .w.- -

^ J., -.G.Th'e,s.

.. e e..m .

rcas: resi .. , ,l.o., e . mfoc.us. .ri.e><. -d. . o.n. -m

- e ;. .', '.W. specific x' 'l a.,p y '

o e s.: e 86 i ,

s ksMemn!

' l ' Mh,b. '~[?tomdrs,stikan'd laigdt,b(hiindss, h l 5, % j% , }- {

s tr.au.tn.g . . 'f~.' 4 .. f.R,. ustom. .e. r.s, who.lesale'cu.sto.m. e.r.s., -..y...^

OW.W, A. %h ,.4 '. ; ,' q ..

w a c m m ui sa oexr -

. .. .d the' o. ve. r.a .v . e

., , ll ne d.for

~ e the.Com.i 3,W

%m5 W. . ..,'r,r. . w,y ,,3. . :3 .- . .

V

, y. .. i 2uM. ./,r%. . ~ '.an.

s .N n..Pa

. ' ' mon .-a.h. d. .i.ts. regulators-t,o 2 -

% $ ,W.  %

t e w'J. '.re .-flexible'and

. F, M.rn;?..Y .

i V inn -6v ".

, [ 'Y M S.

N .m

,hr,ai,ns . e t.i.d. t d..id s r'ME[$d%gl.il.@S.,@W? .%..

.;..'.j

Dl[Mdf  ?, , t

.e.. .- t . w ^. ,.7 e already being 'Aj. ' ~s:

,,.l 5,.b@'. 5 N,iim. i/ . plemeiited.'Tiiey

'.4 tory approval ar.o. Widd t i ,

Mvef'a 48@. e

~

l ., .

( . 3- r-:

s. . .. a v. ,.,

.s . ,m.. ". 'm s u p * ., . s ,. e f. rang. . .  ; - .~

ests , . from. ener.gy

. ... - . W. ~.. - .u.,. d . , . . - . .n ,.,... -

a..

. . . .-Li, ' ....,..r;.3,

'sv,s ,7,,.., .

t,.

.9

,. ... - s!

s-e.;c

. / +, > wl n1.t g.3 # .N*g(c.,,y,,QA

g. g - -ieq

• . Q . . / y g. g ;g~@f. g.M.,,, a, lQ. . 'h.'Y %.. +M* ptt *e o.I tnter.gk,,;;;c l . sk;'. q;. , ef ,l.

's y $'s y : *h,*. .y .4,.

', '..*.. ,  : ~4 -

..*r . .M % - .

• y+!i' .g.J. 4 y g.'g;gg g.) ','k (? %j.f,, . L*W-~' =J,,. .'p'{.= 7

,' w' l} ,, , ,

. . . . , . h. ,t . ?f. M

f*..'f'w lL.t

.E:.),*.{ L*.k.

%QE.

.f;f *q =.p .&g..

4 QQ;it'.tA 9sd

' , [**WQ  ;**".;$g' t';We ..* , Q <

..,' s * . . & t T . ' :* T.;m. f ". ,.;?Q *%a. , ,%

..,7- w t % ~p"

, . t , f. i 9 . .

~ * .l1- . sf. 5..  :*% Q*,* 1 */ ',1 *'g..*f;*.Q',-Q QJ q g' T \.,t *

+t f.h*b Y f.\ %:._ ; Q (. .*s

.. .e.:.. n, Wm', *s~ 1,3 g.. . k'z*

r

. Wr .* y.Q. .;,,r.

w s,,o dg w.*dJ. .

t . c. n.1, . .. . .. . .

s t,m %.n.. ..

a x.. .~ . , . L

.u, . ~ . . ' * .m*% ~r P. ~ * , ' 11

, 's * * . , A D}'4 s-s' y.l;;^ W5,Q,j;yf - Q r ;[ 1;' - ,.

. ;,l . .; - .u

, r...} .' n *.Q .j,r,.s h,.r, f;c.y,;;, g-,.pe.p.. >a N ; g * , ,.

s. . 4. , p y , . , , .4, . . - -

w *. . ,

<3 ,

~

i u

% [ I *

. < ~

1. .a g

...',*lw.*y ,*e,  !' s '6.% . . -

./ .4 n

• a. a g

. s .m a , ;u . .. , \ .p .

n ., % ,

%* f s.yw,f.. . :- r pot,h,qh % i.1- p q f ':;j.p.c; ^ ,,

-r- -r > --

g** ,p+ . " . , , -., ; -

- :.Q. a, .a7 %, ,-.M

.',, s , ,s '. - '

'%.:g,, 4:d W. y ,3)e; %ut. .,/,. .e ; , _ ,

g..0 ,o

.-l9 o. ,3 R ,, ,. s.. :.s wg .. s. :Q

.g..,. _ ,

placi R tirc .;

m, . D. ,,

J (,Ca.d Re..t.ts ,.e's.d. m es the past.sdeca,d,d,

.,1:V IO> q~ PSNH Ove. h.'a,s..'t r . -

7 - .l. l711rn.F.x. system 6f .;".

a.n,uary 1987,.,. .ak,w...as.:, 'de.w w,.a,nd., ,- .:in.c.pW. ,.T[,...

an pa e al. tern.ative.s thaw Com, p.y.y: an

.;,. . quiru.ne ,,,A. tspjg, ua r go.og . , .

r g; M. du.. cit s . .. ..

.u. ld e, . n : .->mpany,~ _. (,,shor a '

ce 41 e m,. 3

- r.

m. . . ywe c.m g.epen a. ence on reign ot!.w, x.

. ds e wit ..- hn.,t u.

o. ~fa m. ustomer .z.2ts ownsc,e.t.i_ng ..

%, 4 > c.o y ha o'ftfall,%1iist.kMe W p5"*[".

.Engla.nd s- . ,.

ss~

trong '.W h.f.W'qQhhipdig'tE,rne w continue today. PSNH ts

~

, growing

- frfeddsmes'e'effo.n6Tif6f .- w 4 energle'tWdp e . it.Gser0e,fup"P y, fE6mHsriiN}iffe'e.A,p,e s

l

-r ku fC P WE * -

. CConomic

.ofre - ; - - recovery y .vanety m .. rconservauori, vload ma.nc

- o. :

o s 4

i anagemen.t,%u%.

> *a/ N ding

>w

~

4 p.1 + es me r r.

~ re. + sources f opuo"ns,,'.

a owever.%

.r

.--- a

.w. < lupursuingv neig%

~ . cl c, r .

s j w . teh re mu n-

, . . . , v. 2 ~ "

,m.ost catego+nes.h,cen.t ew Hamp.s h.ir.e,is

.s

.-w ye.arseln. . .

of h oop-

~ e -- %g in w% ~m: a .c

..xtr he importation ower frorn; NEPOOL'P .ger nl19 recast - . ,, .%,,h. m.4 '& ' .*

at. w n s per - - - - .

- ~

fo.the top oth,ew vw-rmance. Fo~r example,.

E glan'd.

9 n urc ~ e aw . . '""*

Hanipshire is icading th,New , - >. .g.f.m  : Caurada~a"nd~the p. . Nhase of ne<rgy, .F Ne 1 ~

~ ~

w.

e North ,, . rom smai1, in t

.c.. s.. "depe'nde e

' east in pyulatfoh'ind'edip!dyYnint . ;Iri April 1986, the, c  : .,nt"p>ro'du~

N c"ers.*%

, , -f mad,-' ven wit -

Company addedM ~

E the.e 1990ge r . ; h S,f ' '

. .; growth -sw'elliry from 830.000 Q., ,

33 me'gawatf0MW) t6its , systerh$p ' Ug;it.1 and{ha Jresidents'irU975 (66vh ur:5"thillibn 3 hen,th'e'Mi1Is'tb^n~h ill }iiIcte'arS .

d .JC

'lada[y,Mith employmen,t risins by , (plant begaEproyidirQsFrvicejo-(?

[.f egk,, ,

- more.than 60 percent at the'same gg g, 4;gs.w g r ; -

time. Iri fact.'as of December 1986,- .; customers.Jhe Company owns;2.8gp,s..:,,ppercent of the Conne

Ne'v Harppshire boasted the lowest L riuclear pl.intQyri,en'Seabrobk i Mir]ob PSNH has'ddne successfuUy rt'

J uheinp' loymen't erat' of any statifor/. comes bn,lifid PSNH killEdd an 7f"fornii.d0"farsiAshe~Fchallenges* .V f v

. the siiteenth consecutive month ' additi8nal 409 MTV,to its capacity.V/ a'rElieEhfib'csies hvolbe:thetomE . ~

in a rbk. 7... ~ ',. - "'No additional.b'td,eload capa.ci.ty's # .

e ' b. en.efs. E.- ".T B " ' ' ', ' ' 'd I

.should h}, be '-j required un. l the late . %' w'd6EbinifaU

.. - ti h. oenever possible, cont

-[ "e

'and th den d r el c c go .1990s.;. , .

!wdinihand, PSNH is w6rking ~ s PSNH isla inerhber of NEPQOL,:. ,,ug@ew Hampspre s erggy ,

both'indhpendently and in concert l arid operates onb of four NEPOOL , , , needs now and .

,tn'ths, future. g- l, W.,, f7Yh.

satelbte control'c' enters in New'. ~ W C,iQ with other New England utilities

' through the New England Ibwer England. Among strides NEPOOL .y . ,;y, $(M , " ^ VG C Rxyl(NEPOOU to secure a diverse' ..has taken to augment New . ~ , , . g ., _ , V. -

mix of energy resources that wiu ' England's energy supply is the ,

if- Q ,n ', * * ' ' .

support this region's continued  ; negotiation of an Il-year agreemenP .'d X~a Mi ' "" . .

economic growth. ., with the Canadian utility HydroO b', . -

c, for,the purchase of surplus 2 ' [Sourcis ~ ~

Recent competitive and regulatory ,

1. [ n of capacity -

trends, coupled with an increased

. hydroelectncity. Phase 1.of.a Pro ,r" s se r.rcn -

' p sed twoghase interconnection ' gy.q ;'.f.n.n.ma,gg .

demand for electricity by New l Hampshire businesses and resi- was placed tn service last Octobe_r, . g . .. 1 100 ' , _. , .g l dents ahke, have prompted PSNII and will provide New England with jg , , . L

• m ,3 , ,

' ppmMmately 33 btllion kilowatt 's a to adopt a least-cost planning' philosophy that focuses on cus- hours of.e.lectncity o the contract. PSNH. .ver the.h.fe of , 7 . . .

,7 y. Q' n. ;' . g 9g . a

- 80

. "=c n; tomers' overau needs for energy s anticipated ,:; -; e p . l: 7,o f. _ .- g ;

services, such as hght, heat and

's e f the Phase I agreement is pd (-

power. instead of the more tradi-presently 7.6 percent. Phase

n. 116f Wh{ ; Q:b. 2, -

the pmject is slated for completion; tional focus on kilowatt hour sa'es. '- 7s' '- ,No The goal ofleast-cost planm.nos ta in 1990, and'will Provide New .s  ;. ,

y evaluate both suppivr and demand England with an additi6nal 7.0 billion --

2

• side options. includmg con:.crvan. an - kilowatt-hours of electncity at a

. ,o and non.ca!!ty generb '. and c st below the' average cost of New . : - )

England fossil energy. PSNH's 10 then employ the comNnanon of . particioant share of Phase 11 is mannsses alternatis.es that tu. .,a cu+tomers t

energy requirements in the nnst appr x:mately 10 percent over a 83 84 y 8 89 10-year period. -

, a Nx] ears economical manner. .Managenwnt . . , .g .;. _

• beheves that this apprmch w dl Seab, rook Station was initiated by ,

,,; - aw.

help the Company renum a nurket PSNH because of customer growth 3.

. .,C. , .. y . :eg leader in meeting customers' energy in the 1960s and the Company's - , a smamer Nixers needs affordably, while ultimately expectation that it would continue '

~%

, '.' , ,1*5 -N . 7:.t -

providing a competitive retum ' into future decades. PSNH currently.

to investors. does not have an~ adequate energy -w -

supply to meet its peak de.marids,', : ,>: 'N ' d *-

much less a reserve to fall back on should an urgent situation develop. ,

Prehminary cbta shows that at the ,'

12 .

.t:

L -

./

I 1

k I

l s

tf 97 ., i 4 '

v. . . ,

m , 1

' $ \ '- .' c '

8_$' . ' ,

' L U\ s M. _' ,

?'.

l

.~ . . I.-l,' 1:.

l

y. .U . N. 'g_ .

g !s

, d.\s,$;. \U ' )

y  :. . .

h'. g Charles E. Bayless, Financial Vice '

'\'

President of the Company since March ,_'3$ ' ' ' '

1,1981. Director of Special Corporate Projects for Consumers Power Company 'l hi t':< ' r ^JJt - b 't 'n': ::,tn-in Michigan from 1978 ta 198t. Originally I"J NN F"* i' ' ' 1:1J'.'<

.r. >

joined Consumers Power as an attorney l'?'.M I:4 'JJn':: J3 7. . ' : 'l'i'!i in 1972. in addition to a JD degree, holds t 0 l'?, ' '

i' - ' '-

masters degrees in electrical engineering l' f n J' J'J- -

'l'r-' - "J' '

and business administration. " Pathway i:': ' ': e f ' " -' IJ l ' ' ;'. '

2000 is our plan to place Seabrook into -"::.':n'c r: ! 'cr ci *

rates in a way that will keep our prices l' ! "* ". !!'c l ' " ;' d ' - ' l/ I ' ' ' ;

competitive and, at the same time, enable "- " M! " .'":6;J0"

the Company to regain financial health."  !' ':R ;t . ' ' -

- ' " J. f '

n :wJ x:' ,,'. ' , ! 5: '

cr r; ' ;,

• gr;r r ,

, Ig h '

f, I

f

1

. 1 lg ,-

. II %b <

. , , .i s .. ,

/ . l I . .

((,$

f, \% K

~ '

t .

ef; . l ? - '

• " . /, 'r

/ . - {h t,I . p

[j W ^

f, h f ;7 ' '~ h >

, A. ,[h s ,g b' - -

O. Pierre G. Cameron, Jr., Vice President

' , ' }8 .

/ and General Counsel for the Company f.

/, / ( , J.. "', since September 24,1980. Associate

,.. . f)m/ -

4, l

'b b' General Counsel-Corporate and then 4

. , s. . . Treasurer and Assistant Secretary with

,,: Baltimore Gas and Electric Company in Maryland from 1970 to 1980. Experience prior to 1970 includes four years with the Division of Corpor;te Finance of the Securities and Exchange Commission s in Washington. 0.C, "We are serving a healthy and growing service area

, economy, That economic growth means

. rising kilowatt hour sales.Once Seabrook Unit lis in service, we will have the 4 capacity to meet this growth for some

<s years to come."

. s l L. ,

s Jankee Ingenuity , deposit assessments. Automation l

, , . 3. - ,, .' ,

-~ . applications that were not previ-l

,df

.n p f ,

, m .

ously cost-effective in numerous' (

' , ..,,'_., , ubbe Sem. .ce of New

', smaller offices can now be under- 1 r p q e,,.a ,

,- ; , ,. . - S, .,..o, y. .-

H,ampshire isfery,much. - stakeh for'the Coinpany'asiwhole.

a part of New Hampshire.

m pe , and w, el.l chdra.ct.e.nzed able to' track. ty' pesb.y.hlriaddition',

~ s . , . . -

7.,

s

,a... t

.u - - ~

..~ ,

and.fregue.nctes

, .- .q ., , , o. .,; ..< #_.. v 4.. ..v,.. , ,t; , the, ,sta f ..

an k.e.e.... 9 ~s. - .-

g.. {" Customer inquiriesjor use,in '

',. , \.M , / M Q *y } ingenuity, operatidns fro,m,te,'s,sptnt to,straQ'[ of.T. gfg < 4.*M

• $ , [.; ' , -

, i

, 4

, . t ...g.utegic plannmg, PSNH employeeserj c.%gg

• ~

. ./;> : ,

m.. 4;r.

e dn'd often iriiovative ways 9 A new., du-. rate jiliiig sys. tem was ;

('v yo:y, .;ito vjf. ,"Ise'ek do thel nesv.ijobs Ths folkWing high gintroducedl dear t

' ' . lights are iepr~essntative 6f, but do .* Y. ear The new system gives PSSH 4' Ynot fully chcompass,'the Companj(spgreater Oexibi 4

"; changing regu,latory requirements. .

many ope 7ating accomplishments in 1986.and . nianagement ; . 7.It' abo. automates tj y >

.. - .,. . y .. . ; , vast am6ents of historical and forci

,- f, . - 3 In July,3PSNH impleme, nte'dnew a. .

casted data needed fof these filings, e ., x. .

s sak managerneig progra'm. en- '

~

, , . , , . cabling management tp more effec- .: enabling th'e C'ompany to file a

' case rnore quickly and kith fewer u

, ,tively m.onitor the perforrnancf of. g egplel p Management c"6nsiders the

c. ,

. operating perspnnel.The com .  ? greater efficiencies and flexibihty g ~*

. 4' ," ,puterize,d prograrr) provides

- %gg systems such as this to be -

, automated report,s on line crew,

~Chrhid!'in"the,Companf;'s bid to a

- . produc .- 4

• m- . . D .. ..

' 4~ .

..su' c h as.tiv. Work force i.tf and o.

utthzation.The 3.

th.er inforrhation..',

'*e,

. r'emain- . competitive 0- , ,

?' :sysisin also tracks'tredas in these .M; < . x sspecial employee task fo

~

, . , [. , ;.

. b. '

. Tindicaiors', h,ividg m'a'nah,crs ari early . ..

./

(' ' ' Marnihg of deVBloping pioblemsf Planmng. created .

, ,'andassisted implementedby Co 3-i'

'The'ieports a're being used bp hne ;a new issues. management tracking '

~L _ isup'e'msors to m' ore:acciirately p'lan gys, tem in 19.86. The system, syhich -

W the time' required to accomplish' 'f . involves the reyiew of selected local

', . wbik,' eriibling 'tli'em' to meet tliel % and natlor}al publications to identify .

.. c grosing demands placid on'the . . ', potential emerging issues,is a 'N -

?sysiem bp high customer j;rowth? M expected to strengthen PSNH's

- - "-' 3 Mariaj;elpent esEimates annualM ; abihty to take advantage of devel-

, E '

savings in excess of $3.6'rn'llick i ' oping positive trends and to avoid ,

? -

~*

from J , : gained v N .efficienciesh:f."

' u ; % O i "fthe 1The impact of negatiye eiemplifies trends.

.E!{N'o N r.tss . P ,l new system the.'

< nn teons oNoc.ye . ' &e In customer semce ,use of a new, .JCompan 's:c6mm!. ment to be pro _ .

i al .. .y. t '. m9gcomputenzed,mem reading l.f/ active,'rath6r than reactive,in . ~

'.30 .

s. . ,. .m. ~.. . . u a device, v. . -

h'a.

rov.e.d.me.ter u . .. ~ a.av dap^ ting to change. e.

-r -

e -

%pM@. -

. ; S. ',b, reading ps gre..atly.im. < . .e As Seahook na v, .g . . .. .

ap..s,tn-servic.e, v'he?s M . training roductivity tiine a~n'd ininualinput treductng e.

@' 2. proac

.~ ,j,J/. D /inefficiericles."ThE'Compahy estj. a operatiorgPSNHj4 dotng eyeryn,

. j'f __ W .5rdates th.it"thErieEdivices hive ;phing ppgble to p Company A.9.M d ' ecrea'shd Jf dN.y'," d biihn[erioWand pg ip pos,ition to maximize 13 -

M,$"J(9.2. 3 Ire'duaed laticifmiiefialandda151tilgf this fac,ilityyh!!e nost' media ,

. D ' fccsts'b'ybre thafiS350,000 anA and inveytor' attention has focused '

p" 4,, a . 'D. g "

.i I.Dnu' illy.The spite (ieduc6s*tfle'l@$6n,Spabrook in recent yests, PSNH 1o s.

A me ti frbm'niete'r'iehding t6 billing '? has quietly,and, effectively con .~

.. ; .E . tinu'ed to pr6 vide eficient.'a6d feli-

, 3

( R.;7%. I to just'orG dafYor the maj{drity.of J.)?g;..T.c '

.s m r a . .M +3.y ..%.N .%.:c. cya.:,.Jn

. .4 Jan.

-n u..ar.y no. 19_8 the.aand

, PSNH.. to.ok.

.- r3,q. o r. ew !pamps3in;..-

Susinesses a. t., .y throughedt

. ,f .

-~

M.o,. ett custome -

o 83. s. .83. . . % m, ..,,i:n+ :s. p. step to t- .-

e. n .

, i;Jg.i pJ ;ghe. n,the s reng~~.~ . r semc.e  ; r.Q.my;.N; g..em.~4.A.

a tengEnDet( Co,mpany opened a newy .

g, y ,ggc,.. ;p%

- %: . centrabze'd customer semcc center.+.r - 13: .n. .,

, . a paneannetz .. .f /e s'S i \ N' h .The Company"is c'e'rEisizing .3cy%%j$

QtlhisRD,t: ';., ,* '..

% a cannms<da.c heterredste.' ;o 4(.M . ,

~

& ,.~

.  :- D'2.c.'n[:W r M..m[ v .v.g , h*, j;h .p-Y .M s. . tite, foirhe'd iriBff@(th),bukt th t.o improve.. kh k$);p.r.o. ddcuv

, . e .~ -%

,Dp .m. , ., . ..r . ' c. .., .

g . y, 3-  ; consistent _treatm*ent of g.y,s,g.J pg mg. ~-

', 2,.2. JV i.r.g...

%  :.. * ,W ' .y; * :,

.r .m ensurQ'e' rs in sticn"s1are."L9 as.pu.[uuy $, t. e.;, w.h,M%Q w

. .. s . +; - . .:f- % -& =n sw

-,.'O'.-

J ;.t F.:.j ;- . *-

I'O. . -

Custom q e~ E r

.',, b. m .  %- #', ,-

, , hap [digr c bditM'Ck.h * * ~

< ?' '.

,v . .. .r- u-. n,.g. t

,9 rw. yc.. w... n . w+,.D y m.r.ewe. n,.4b7 ev.r . , M.h f @h2[ N

. . ,. .m;so.v

w.e.v;j,m,4g 4 v ,

'^ _

.g.y

.n

.Y< 3'

.. ;.. . ,, . p . ..

q ;. - -Wg . %w,..'"','., ,e ' z. ,,

15 "g . , . . . . e ,0,. O .  : 4 3 f o . i ,

-d i a.g . *g P* (* .0 / b.c.,' , q'b..4 '

,,'g' ~ \, pj.6

. '.ys.3)jl7 ~sS 'j. g i,_'.

' .' V s/e'. ,'

,.e' 5

p p$ .'.'r 1%

. - . 6

, '4_

y  ? '

.Q V l Q, W' g e y' ' ' ? Cn - - k

1. .. -w:nmyp;-"wm:.vmW:~.y myy.v;~;x r . 7.m y rmmr ; . v n- . . . ; . mn Y' h E; '

. .Mb~Ik w a s 2 .3 ~ g c. - A w y.e ~

. m;ugg;& t, ; M r::. '

f '

n d Miriale~ineni's y Disius'sio' fCaplt'al eRefruiTements'and LiqEtiditi bMis'sTisiea g'gTha CdrE'M tidi'tNeTom'prehedsive'E.

~

4 C6EdiWon'id~ d Reinlis of *caEh'is'insU!ficieEt to'sausfp its'c'ipital]Eiztfu'e4 '5 sal.". S e!'oje7alWidMC??C discEsid' bEh"diiPTth@ anys~2000 pr,

-lMhSMW.%[d@hm'en'ts'Tr'Y6KiyYdt'8ibst'on th'elCo$ pan,gs*o0lNh p EhpTid'6y'piE c'.% VEbfri5 s'taEdih"g fete di [indebtucfneU6Th76Igfi'

'hTebiGi?yJp88,'thdCoispar@hasMSha6 din financirigkPalhWay%0U0 pr6ddilI8n 4

g g W'@'.g t .- 14lt

" u qp q./Mr&;d'fuhdOu~fficient idffifestirRaibd casiMWindN[ook'ielat6d rate inU6 ' iit'(983 $nd'SAabio62 fifdie'd IEcf65i6' 1 i s .

"1. p%.. + ; $ .se.J c 9. e/m ? icybi/er6.EritsUd.i.il

-. o' ..

. , .e 3.;p t. e e w Companyyid hav~e exh~austed its available> fun c n. -

J.0i)61987,"a't.whEh,'

w L Company his. assume 3 tim,8?the

..E5tE , . ~e'ridi rfo 107'ic r estimauon pur .

~

, ,Y, . h D.,,? M M, ", Cuniess e a -- - ab t8 y ' . . ieFeYe.r-It.rh,.Ei6dFS'Co.li.w.2o.rfip!E.ihTr.w.n .EatI

. w. .m - "" YtE.lt.t.le. ihi.s'efiide. 7. lthou6 m -~ y .

.na l.financtng;The. mpany is tn the process,.of Id bd anuary.1;1988J gh.i tis unlikel ,; m .

' * @ q.; O M,;'

. . $seeking h issuc$ "tha{ths t6%11 be7/ieiUf'5Iiyon,e'df y d@ c t. *'c sufficientfi6m thb.NHPUC huth6rilitionid

• rldcipat inMriiWdebi'snOfitief idNd b7ih'e'NHPUC%

,..f # ' 1 ,jg - $"ldeslj;iedio)yiefd pioheeds td ths'th$lEfe[j6rit'eniplate 'CIimpa5y'e2sth

~

/f '" r 9,

.,f H.dted.to.II.e.ridc'es.,siry t6,Ei.n. ble thh'Coi.npa'ny fife ihErESEiEs W6't fpp'd b iri i,e

~ 3 00lthe'M m , ,

, to satisfy:itrcash equ.irements through..the en e .rerE.

s be.a usted ddj. .

.d.seri.e.s.%.

ww compensacon .$,l'o Since f,'i.nc,

, Yea.s2. .s' r a h'av. h.

it.now ap c 3.1 '

• s-M ,-

, ~' 's6ir6

" E S'upr6ise~C6brt Bf 1988. decisib65 Siffe ihd(NHPOC blis ti$i'ihItd' tal 6f th' iniIial 6orCSeabrook . ' '

ilid tis o8eG Harn;@%rellie X. ninEe'aSe

~

, fm'aRci.ngh fdr Seab.r6Ekf lited/sU'bi.e.quent'd.

necessary.Th,'

Compan . lyis.d.ju,s.t.m.en.

m

, / c.om.preh. . ens. iv.e.i_e.v.iewbf.

~a related expenditures. 'the Company, unable to e y current

~

,.. sdek authoriiatidn to issue initially' $220'.000,000 r'idictifie6'dr if'such rate reIlif'may be granted

.  % L- '

,,4 j principal amdb6t of longJt errii debt ses6titidslthch or'as nE$tionEd'earlie'r,'thf in@fvice' date for s

.. S

% prdiecdiof whic@a;5prokirnatelys'i45:000'000M'SLb'r'ooIiUdiY1'.'lh ad c- '

req'uirernhnts for noh-Seabro6' k related conaK

/ .' i struction elxpehditures during the

'.$' rate6f liicEeEs5 periodMu$.

. pe6ijn"d'rh F a

in load'growthMll av thorization tofraise approximately $100.000.0.00 yg' access to the QMg,ggldG/iiisth,e securities markets to meet Seabrook related costs and expenses . D s'dep6EdeEt nbto' nly'upon (Ed factbrs directh' during the same' period through the issuance of Welating#tbh6' Company's fithncial condition.'but ~

additional long-Prm debt securities'will sObse'- Yalso up6tif35t' ors'not within the Company's con-quentlp be pursued before the NHPUC;it is . . WroijhdM'biheff;ictors include timely regulatory anticipated that extended heartngs and court i Iap i b ' lirdduired for such financings, which in appeals will most l.ke!y o,ccur before such e .1 .7 e; r vath rec'chtpa5t have only beeh obtained a

~

authonzauon becomes final,if at all. If NHPUC; jextidrM'lyldnjthy~an'd contested proceedings'..

approval of the inmal segment of,r.his extcrnal *. ' he eff6 cts 6n the financial markets of the political financmg prc. gram is not granted on a timely'

? uncertainties ' relating to'the licensing of the basis and if alternative short-term financing 7 .

. S6abrook'Pla'niand thd financial condition of (which would not require NHPUC approvall .. s '

r should not be available to re, P .c l 1

.enish c struccon its mW% avai.

progra'ms lab.le-m.- ;oihe' (including

-- electric the other Joint unlit.ies w

~

funds. the Company w 11,be unabic to meet iis.'5[Cirie'r's'of s the Scabrock Plant),'and the accep-obligations as they become due?

4d d@the'5ccuritic's markets of the secunties The Compan/s external finahcili'g'for ihe peii5dh beihg'6ffe$d:The Compinyl5' ability to finance 1987 -1991 is estimated to be 5630 million'. Thath.{inap be amount isc h' eded,in excess of estimated inte'r 1-Id the ioG,li'mited ani66nt'of debt servicenot whichjusttheby Com- market fac nal cash gen'eiation, to fuhd cbnstr0ction expenf MAPyErfasonably expect to carry. This limit d:tures of $482.3 million, to refinance debt - ' y may,de 'functidn not only of whether and when matunties and pay sinking fund requirements ' ' Seabrook.Uniil begins to provide service agregaung S431 million, and to meet workingE , to customers, but of the po!;tical economic capital and other requirements. This amount is and competitiv.c limits in New Hampshire oh predicated upon receipt of the rate increases ' rate increases even after Unit I commences desenbed below, and if such rate increases are .operati6ni i .

granted in part or are delayed, the Company's , ppocgedings bhf' ore' the NHPUC f5r authorizafion extemal fmancing requirements for this penod of the Comssty's financing cbmpleted in Febru-will increase substantially. .

M1986 included among other issues considera-

,7 tion ofilh' e ther the Compan should con

s'incuic'xtbrrGl f;nancing to fund its Seabrook

. VobligatIcins'o'ihbuld r seek protection under the

- e' 5 Bankruptc C6de. In its order ap' proying the O I financtng, t6s NHPUC concluded that bank-ruptcy.of the' Company did not serve the inter-

.s iN m

16 .

.')-

a-a o, j g 1

' ests of the Company's security holders,its' above.There is no issura. ice that the Company

, _  ! customers or the State of New Hampshire. This ; . could obtain such financing. l

' pue may again be tonsidered in proceedings 7 U?cnSter Unit 1 is placed in service, attempts

.. ;invoMng future financings and,if considered,the :

' I, t ,

7; c 0 yCompany cannot predict wgther the NH(UC Finy lohg'ter'r6'g. Emight outagebe made' of Unit to reducs iates in 1lwhich~c6uld

. N ,s w -; -

. j.- i mgCom.e.a. n . . .ill.r ch.the sam.e wh' thsec.onclu..s. ion. In'Unit addition, the ,f,.g .,tw6s.tmpos

.N '

pany,cannot predict er the NHPUC6becadse I c'oiastiiuiEimore'than thirds .

of the Coni

~ - pproceedings i.such.finan.c,t.ng or w ayd any court appeals w;til - u uph61d.M.F so"urc+e o

- ~ . ~ <- '

~ >. significant portion ofits electnc . -

+. . %. i.e. ntly timely,bds.w,. ill be.

y c

m 1 to e nab.le.

ts..m. t h s ecome due.

m: w.~s c.oncidded

-Y & . M.

o. .n.'a s. u

~.rwa ; w:. - x. .-% ;.. -,.

" l-s

, , ... MMResults of Operations'. ; ; i :,  ;

4 -

-(' Pgocc, tin;g ; m.m.the Companys Uriit 1 inve:stment ing~ ."MratGgiehen'uerdec C *' crates ongbasts w;hichukeeps the Company's i

~

f 1.1% 1n 1985' aiid iri&dised 13.4% in 1984, The ..

' , Arafes competitive with other sources of poger *, $ddireasiffreven~ u es for 1986 and 1985 was

) .3hlch mightin s

' , . , ; 7 fentical to theture ,

fu,thewell7 beingshort of term be available the gom.pany. i ts ,1,.,r0 ipanyauh to the decline

, g:lf l. thd, Company were not lower ,

permdted fu' l Eosts,is phme e

toYnesanatt-hour reflect asales'[Jben reasonable po,rtion o its Unit'l irwestment'in . 4 iniased 2.8%.in 19Sd'and 4.7,%'iri 1985, even

', -rates on a timely t bas [s, or if'the Company's rateshafteithe lossIc 1 j becoms so high that a number _of its substiritial dthe Company's~whole'sale cdstoniers, w'h ich for 'I

,, g customers tume.d tb other , sources, it wyuld be t-E h~e t twelve'inonths ended September 30,1986 -

, y Mer[ difficult for the' Company to' meet its.pbli{ j7l;3cegdntedfo(12% of the Company's total prim

'. Sc.s -

o "A ' M. f.(gations

,s as to Financia} Sta,tements.

. s . .. r t they,become

..  : . A;$.hF due.See No,te[l eslFoF198 ofpotes $5dlfiind ippi f u;. The Com,pany 1 nnotca. - . the. . rate

,q. treatment

,.,p, s >trevenues a.v. . cwas  :.f.io.rW p'r,im.

,e, megawatt-sal,due ,to i

. . . , . r .

. ,. predict eased pnme I ' 'S . ; /.t'o be e 6ufsileiof 6 . uA %

~

h,wl

. r ,-

a

+p.,.p;pany. n .w

".a..dh. orgled mU.. n. ..g it 1 b. ylt.he NH.P.UC. .

Th'....r....ComW

- .<r .

anticipates,if the b{HPUC does not agree U.{The aggiisitiof fuelind purchased indinter-(f " , y77somelstmilar to the Company's Pathway 2000 pro,posal or tj,chchEnged poielixpbnse/o plan and the ra,te proceedingshMipcovery rWentie's are based /deifeased 12.2% -

,c ;before the NHPUC fol, low customary rateymaking 9. lor 1986 and 4.1% for 1985 and

,~' _

extenstve con f_ . - .inpractices, those proceedings that regar there will be ding the amou,troversy- for 1984 Other opeiafiit nt,of j in~come tiuieslincreased 11.0% for 1986 snd 16.7%

~

yqth,e costs of constructing Unit l includible in.th:f f6r 1985; resdliinkmainly from increases in main-

. _ ,' ~ - Com, pany's rate base. Allegations have be,en,-

C terianEs~and deprec'istion.In 1984 these expenses

< ,,made managedthat and that construction such mismanagement of Unit has1uhas .+. beenl mis- ?.{ decreased'slightly. W ' , -

resulted in excessiv61y'high'ciistscOn'ly' costs.- .d.c , Jhe A , n..

. *eta..of Operapg F.xpenses

'l, axes op,  ;

p 4tOfoddd incurie'd would b/the"NHPUC be incidded iiii6ECo' to havem'pahfs been . Taxesrudestfy'$gincome on income res.ults in a creditand,Othjr of S30.212,000 In,co '

l ' ~

!i

• i2 3.tidiifih'e rats o bitse.C'ompany's' it'is'p8ssible thafa subsiariilalpork share'of the'chsstrtisfid@

crg come7(I$,dge,pyysents'i tax benefits ansing from

)

J =. 1c6sts'of'Uniil svill not be allowed fiiiafd basef8/ a, net opgrating Icss (excluding AFUDC

'c' /t6 the'ist'sht such d6Ais"aie h8t'illoWed in'ritsifPurposeS3e qc tax begf

1. J dbdselihECoinpd67w66fd b6icij6fiEd td chirgy6% to'4,0%lirl!19,86 full, j. to

, ilhddisiillsvid aniciunt'against' earnings:M5rd-X Uuse of the,3 net operating loss The. s tax Mefif thENHPUCse to' find sorhe p'ortibh~of gJec9grtizedhin 1986 re

' i9. TJdtEs CSEf(ahFishdiEof ex'ceE'bf 6e'C6tEparifs rias'oMibl{nss~ds/thggh%aru,xpgeteil to turr) aroundjit in.thel Unis1'cipacity to beMdersalo( #

ior years

• ~ ,

, WNHPOC cBuld,is was poiMed out in the'dec g' 9Igrgfdgard period"o

' Osibd 6f ihiNew^9ampshiie SuprirrilCdurt Up-l4 nterest'chaigid irleicased sigriificsiitly ovdr 1985

- Mhokling'th~e NHPOCs appr6v'alof th'e'Compan 's Ydu'sTo bi'iss0ainc'EslEFebrudry.1985 AFUDC

,, +fmahcing EoEfipleied in Februiry 19867 Eici %IriffeisE "duTfdtie;iiidelsed' investment in

~

i D8:ihe'gro,uhd..s i s6ch portiorffrom ihi,i'i.t,isnot'.usedthe"Cospanys'ratB bisF{r)M@NilinEliea chiisitrt l

%.k $.d,"

7 a.nd. bs'e'

n- fur ~ until such time as. such apaci c.w.ty is required forethmw ,.s jq

@p, f

@ 4,.g. 47 -

I

- w.ds In u. w. "

dj: N pN

. :. .u. m,...nPCo. w. D,G ..*;1,M, ..9k ;?w%. .:. o9

. mp s6Ba 'e m

, %,c. .. W weeither..i,ri.y's.

~

.such dis

. . .red,.s!!ow,ble.fice.he,'lCom,the ance,t panys fu~ture ,  % gy4.,& Nen.I5l c m. &'s .  !

? J.2W

g. , ,

J.

V4['harhingi6ould tdina'teiially'adveribly;iffedtid vg M im'd Extfridt fini' icing w661dfe et' quired iydQ WdhhdMtQ g,,,, W %WjMMM.O,S ,

c

.% m ~ M.4 M?m f1 'BingthEtpojelts3i;n'tli6Iolecdst wm de'scilbed 'f,?. h "PSg!th ,.y"

~ ' t w y.g,w gm,mt o.q: g .qq:p+Wn tv.3 4 -Q e,.d. f r M TS".c

s. ," .A

.,%.,w,%

%Q  ::. qM.M ym+ K m& q ; Mw 'c ..

ll J Aff@f f f 3.gsg &. $7 gM gggg WQ.%w&g., qWV y o

fMES.S"MO W QiM AZ' 7

,i

. .y_ _ I

C'y") Q?(f& y.Q[$R*Q' ,  ; -

. ~ ' "  ;

':.; - #,ggg ~

wnw c :wkmm:w . n F/*r k .

e : + - , - . ,~ m .

+ -

m .M* . ,. . g .

c .:.u

,# ..M . ~ , . . , - .

y .,[.t,e". .V *u,s..,1 L..c. a. . w .

'CD'n Juifj$l'98 th"e Company a6nounce'd a'-

NFI .gh.%. 4MfIp .~;.jg% prop 6sedTeisiip(rehinhivesMrate . ,

a{s.Spje'd )ldn;known Acibuntidsprindiples a'6 lJated'entErp' for.en rise !

rM g W.cwp+.

.yZn u((.g';g.# .* FMYtRaftfie C8m~p ~'gned to'assur,e  % cWitFcu i ~

. Pathway,2000,9dsi ,

'y. %WW'N -'

nilIY6m'ais'd6mpeiitiVe.5 " YS "E U Nby5hW [N #Ob'" s ' i TOM,,

. e.. ee i.,.dh@n. , ,NWYljfc,.ThIC. -

te P '.

re 6IC.I.ny,b..

00. ~Pr,'op.6sa. l ya. d. iitEii8,s riitithGiay'2. 0.d brook relatdd - costs and -m- rat . increases allowed -

. . ,.- ,_ , .. ,c 14,M,in.19. i~719 . late . --~ cr -

. s

.,a p . g.r.q bu ,-

.la. d non Scabroo.k. e content and 7%. t.n.. .,88. rate.in. b. r. ease.s of ~, ,r.e d ths . .

an FASB o:n~these atters,m.of any staternents then 2 tssue

-n

.. o, 9 ( . - w

>w. , . .

t. . t . , .-

r. .

1.% e.ac,h,o.ver 1 m iv.e.. yea

f. .d. .>c S,ea md

,o.o.k.fe.l.it.ed, req"uired

.+ -

it .- e.is to possi recognize e that loss

. s an

~es: .c..

,', increases mgi.n1988.' o. Another gfprpposed the. s p.rs..co.mmenc.

f~q.

uM, {,g.,'e' ,[e

.s .

M"a.v

'. Company , ~r ~w. l be .an v%

.ery w' offei isf ..that'

- - ~s'retaine 6y ~tliE'CompanEn.ot.t - --

. d earntngs or result .. ~ ~ -in substantial .:-

a~  ?

V -- ~ --

n: L. . .%e .;~ "

,~ 3s . .- fromli.

. Ne*. H4m~psfu.. . ,re. customers .+

of its inve. st cc~--

~,,i retained deficit.s.

m It sa. also+p+o

r. . a.n.s . Unit m. 2.. ...d.. 4-

. . .M.S..

1. n me.nts.h.t, -

~ince t e.Coinpany beh.

Slab.io..6.k -

Pt!gn.

Unit 2;..v. .. f Co"mpany will determine

,. . s any finaljie,ck ! aphropriate. io'capitaliie' APUDC felated tolers M-  %, gon by,th(NHPUC,on.ges,that. tts proposedp jonclude po provtsion for any such recov,lan will;rf6tain SeabrookhosU w

.'g

. , (., .h, , -). .- .< N -

s < Compan.y as,of. Jun,e 30.,,1986,,.rec.c o rded- r -e -.m-~ - - - '

. w -

a e,

@ . ,. D.mncludin. , gest.-imated - net cancella, tion ch.a .e. serv,.e., . ; ratee incred$es arges, t a suff

. ~. .

. W."l p g prpvide for possible non. recovery of the invest.-7 g.erssly affect 6d during'ariy'Ju'ch'pe'ricidcThe^-

, m ,7 . ., '{. ments in,those assets.The(Company has et,ected..: Comp'a'nP,ii curre'ntif unable to predict the level'

' '? e/. . \ ; (m' , . i.;7Co'urt not to file,with the b'ew Hampshire Supre,me- 6 4 7,  ; .,3 any,hiither appeal of the ' decision .

of.pd ;Oor form bf S' abro

- %. g, .t , ,

g  ?.:. NHPUC to. deny r,ecoveryof its investmen$g .'th'e Vdf dny scfditiodal'ststementAisstled by ihs FASB -

C, Pilgnm i . : :. & . , w , e v .W W<' . ..

19,86thattelite't'o'thsE i 7 ,

, Seabroo, Unit 2 In early hovembef k J6 int ' Owners, recogmzing that Seaa.c the .

initt'els.'.; N.L

~

e brook. Unit 2 is e' ffectiv'ely cancelled, Voted to c Inflation coritinues to affect Cornp. . . .any operations.

Jf ' . . ;' ./'~ v

. 'relinquisfito the NRC the constiuctiori peimi[t ; ' . ' since under existing regulatory practice'the ' .

y' ' ' investment,ir[util ty i plant,hEs be6nLiecovered at .

for Seabrook' Unit the dispdsition'of Unit 2 squiptrient having a n'et 2 hnd initiated a'piogram for >i histpf,ical cost but replace

'# ' salvage value. Th' e refor'e, the Ccinpahy's invest.

', '. ~

meist in these asseis was charged agairist the :t~

(reserv6~previously provided.'and the e' stimate'd} }ccumula'tsd inflition ahd cairying costs.may be -

. many y. ears, the raics'necessarly to reco

, c -( .

cancellation charges for Seabrook Udit'2 revissd ' in excess.of what the customers for that power,

' ~

' based on further studj, ' . can piy. Thu' ssomethirig lels,s..than historical cost -

' ts e

4

.In Decembbr 1986., th'e Fidancial Standarcis

~

i Account'ng . ( [e- -

[cf -

s rec ere h ough'

. ..~ Bo.ar.d

. (FASB) issued a.s.tatement ~ tSEM . - ngs,

-90) that significantly changes certain generaUy . ; energy' cost recovery .amechanisms pr rate fih.

as necessdry. ' 7 accepted ;tccounting principles for regulated"  : ... - s. c _ - ~

enterprisei SFAS 90 revised accdunting iequire

• The re. r. .sults of operations discuss ments for plan't abando6rhents, regulitory dis # L notpecessarily indi'cativ'e of futu_r,e eatnings. !t allowances of plant. costs and capitalization of ; ~ ts expected that high'er operattng. costs and .

AFUDC. SFAS 90 will be effective for fiscal 1988i

• carrying charges, on increased investment ini

~

. The FASB has also been reviewing ihe account.- Pl ant,if not; offset by a similar increase in operat-ing requirements fEr phase-16 plans.'After con.. ing revenues (produced eith.ei by periodic rate '

sidering comments received concerning phase-in .. relief or increases in. megawatt. hour sales), will plans'in10i carlici exposure draft,' the FASB con- . adversely affect future earnings. Continued cluded that adciitional consideration is necessary ' gm*th.in negawatt-h6ur , sales wiu be dependent and will consider phase-in plans further at a later on the rate of economic growth in New Hamp-date. The FASB is also reviewing the accciunting shire. weather, the use of oth*e r energy sources and suppliers and the' price'ofl electricity.

requirements for enterpris,es that shoilld nb longer apply current' accounting principles for ~f ,

regulated industries (SFAS 'll) and cciuld. as'a ' _

part of the process, establish criteria for situa- a' '1' ,

tions where it would be appropriate for a regu- f ?, -

, . 1 s., -

w .

• I P( I

~

, .a-

,, ? f,?

. f, ,  :'% .,. 7, .

,(

& - s

?

! 6, ', ll *

- . % d , a'

• 3}

g , * *~

s 18 i J

e e ,, , :O. 4

.y ,

,<. . - y s v. - f. v... * . .

o .. -s .

x1 . o s -

M,0: ^ %'

y i; , .

-/

- '~ % . e .J 7 Report ofIndependent 7 tie Boafd$p "y of Directorsi 0,.% uM S . . . ..

TCertified Public: 'e ' "i PUBUC SERVICE COMPANY OF NEW HAMPSHIRE ~

j fAccoun'tants [ l7M y f(pfy;g Min [dMbceM $d siatements of capitalization of Public Service Company

~

j

' i 2 6f Ndw Hamp'shirei

( ,

r.

m .  ; .g m .w yf 7 gg POSg .s 6f December *31,1986 an'd 1985 and the related statement si

. ,%~ .

,.aope, . - . ...d. d Dec._an.d. dru.ingis.in c,omriiord. iock_equitj fo.r ea.ch.of.th. e') e

~ ..

, m .riod en. ~e - ember ~-31.19.86.O.ur. examinations we.re.m.a.da in. ith. generally decepted n? 3 E. e accountidg..n.ce wsuch other a's g)./ auditing standards andiaccordirigly, included,s,uc s r; - -

,. records and ~

S <

a

. W. ~

s vkr.Udiilng a probiduSSIs%..m 2consideisdiiecdssdr l i

c~. As more wrc , . /

fully $:y v,;*d irtNotc M a ',:~.. 1:.c w.investment . w.

.. 'y i1[he licu'riislascds c '

aJ

.t. scusse the . Company has a substantial Ng.g,

. , 4

, g/ 'IEingd6fdiiETE$ia'tioni,f h Seabrook Uriit l anfidbtainingadequate ratsielief upbn its e-- 7, ; Y 'cornindretal operifidh:a're e d' p6n' dent lipod minffast6rs, miny^of w C." ."contr61/Th6A fEt6fs'in'ciude favorabl6 decisions'from v'aiiouile'gdlatdry tiodies.The Nuclear '

i

~

f. Qjijekula. tory' Comm'isiloh 63s'giantdd an 'oper' iing' a licerise.foY Seabr5ok Und I subje.ct to certain

+

N J -

• y : dconditTons,'the'riibst significant of which is.thd' completion'of thdiological errergencyresponse~ plans

~

Wthat are corisidere'd ' satisfactory b various'regGiaiory bodies. Achieving' commercial operation of

'!..',V ,

. ,f

, , Jl?.i(Sehbr6ok Un. it 1 ad.'d obiainliig .

q.ade'. .uate. . ..

faie iricieases upon its codimarcial cperatidn are ne t/. for.he Compa. t = . ny. . ,to, intain ma its financial viability.Th_e, accompan.. . .ying financidstatements do not T .

E

.. .' o . J . , ' , 9 the ':>a'modnts'and b . Tiscludelany classificatiori adjust'msnts' of liabipties thatrelating r6ight,be nbdessary to'the recoverabiliiy should thd Company and be classificatio unable '!

,a.,.s.

, .'y *

td maintain its fina6Eial viabilityf 4 - . C 3 .m  ?

.' yw ,:[e u

~

< .r 4-  :

g;

.m., e .c .-m: .w ..

' c . ,

% i . t w <. .(vin our report da.o.. w #tsd Februarp 10,1986, our_opiriiori*on the 1985"and 1984 finan H: . '< s1 4 0,j cidahfiec} subjektg the.lrecoveiy'6f the Coinphnysiniestment in Seabrook Un

'i ,

, / Note.1/thd Compaf}y'dedide)!iri1986 n' o f to seelgesofery fr6m its ratep'ayers'o.f its' investment in *

.; f. ..; .f. Seabrook Unit 2. 'A

., , , . s a re' suit, the Companyis irivestmin't 'was ~ charged,tc[ operations as required bp

!c .," ~';, 4 .* generally accepted accounting princ,iples4cc,otdinglf, our prdsent opini6n on the 1985 and 1984 } r

~ .. cs financial qu -

2 - ,.

,uw y. cstitenier.,ts, 7 m r as pr.esented7-h.ersin,is,'no

.

n . . .longe.r.y;.alified ., re. with respect to t.his

- -- ~ matter.' .

S : In ouF6 pinion, subject io the effe' tsc on the finkricial statements of such adjustments,if any,' as' Einight liave bdeiirectuired had'the'o'utcome of the.'uriceitainty'about th~e recoverabilit and cfassifi-

^

fc 3l n '

, '[3

~'

lcatior olreccidid asset anio'urits and the amoitritiahd classification of liabilities referred t6in'the .'

sec6nd predding J iasgiaph' been knowii, ths aforeinenticine'd financial stater 6ents present fair'l/the

.' , .} [~finincial pcditibn of Public S.ervice, Companyo' f Ifep.Harnpshife alDecember 31,1986'and 1985 and

- ~ '. ~ th'elresialts ofits. operations and chinges'in'its fmancial position for each of the years in the three-

jyea;r pdriod erided December 31.1986. in donformitykith'generapy acceptect accounting principles .

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. . .: .cy.

.6 ' ..;: 3, .

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n. ,Taxe.com,e..

onTax.es

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u ptauon' p,

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s'. Prtncipally.fropert

' Qb. kOpdhkMid'9^Taxe. ..M * .

s , "'24.221i '23.330 -

~$

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-2 ,, Ope'raiin't, !$~dmeU c '. N h ,./~' O.[$ "$#1 '.[83.8.8.,8$ " [ *

• 8 l.'173 87.244 Other Incoide and Deductidas i.J'i. ~

A 4 -

v.4f a ' V AlloVahce'for Equity Funds Osed DtAring k s 7 $ . " , Ml e

. . s. .C.,o_ n,s, tru'c,tiorO. Nots 3) ' t. e .N * '- L ,: Jif2'E 4.697\,  ; e 116.228, ' 103.912' ev

~' Ta. x.e. s, on In.co. .m. e (N.otc.' 4.) . W'.

...,.~  ;. . C, /*.g0..... g,73.320.'.

c  % .65.054 ~, s . '49.179 -

r Equity in Earnings of Aftliated Companies , '4 2.722, y '.3.1i8 ' 3.122 i

- Interest and Dtvidends .a v 11.649 -" ' ,15.3,80 - 6.519

.lloss on CanceHation of Nucleaf ' W - 'I * ; .

- '- Projects (Note 1( ~ ( 348321) ' E. .

10ther-Net t

' ' . - (5.207) (5.124) (6.095)

Total Othe'r Income and DedEtions - 1(141.340) 194.686 156.637 Income Before In'terest Charges ~ ,' ,.

.(57.452) '

275.35'9 ' 243.581 Iriterest Charges . .

Interest on Long-Term Debt . ' 206.400 171.989 105482 Othe'r Interest , ...' *

'4.0911 ,8.699 21.920 Allowance for Borrowed Funds Used During

' Construction (Note 3) -

f69375) (5 ).571) (40.121)

' Net Interest Charges -

140.913 121.117 87.281

~

~

. Net indor6e iLoss) - 4 (198.365) 154.742 156.000 Preferred Dtvidend Requirementi?h. . s s

- 40.981 40.981 40.983

. . . . .s i

Earnings l Available for Comm6n Stock  :, .S'239.346) 5113.761 .S115.017  !

~

Weighted Average Commeri and Common .

Equivalent Shares !000's) 37,194 48,128 ~37,920 Earnings Ibr Common and Common Equivalent Share iNote 3) 5:6 44) 5230 $307 Dmdends IW Common Share - -

5033 4

• a I

20 sa a:sune rm=. .a s:a:e ca

o

.s*3 ,2 ,

r , .,, ,

4., ,

f. . .  ? . -

^- . December 31.

. Balance Sheets' .. .

~ . .

.',., (Thousands of Dollarst

1986 - 1985

~

~ ASSEl'S . 4, e v '

. ..u .

. M <

, ,-l:t g; TO. 2 . ( % Utility Plant a,t'Or"igEl' Cost ' '

'/ EJr "$,pSt a.

4 l

g Af.r,;;>;. ~ '

3. .,

' * % . . -*, Electric Plant 1%h A~

V.a A YLessiAc'cuiM!$ed'Pi6visfon for Depreciatidn'i ~.d; 1. ' :NIh4266' .490 .. I 1240.752 .

M.9 %' Q@h .M. $.EE , . ,

G ?% f51894.744; .$ 7.37.010*

• byw f- - ,3 gg..  :.

,ggg. . ,gQ;g. gf.j9 "628.254 W496.258 [ '

W -

. . n,s

+M Unfintsh.

e

!g:hy.qemd',p d . . t: .

Construct

.$. v- $n(Note

.. v w ., a. . w d;. w <.,e1)r . ~{, n e d, . ,.,

N%Q.4

~

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, ' '.Seabrook'Uriit'2 s .

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w . . .. c,.o.tal D . . - .. 4 , ... .

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n. .Fa '..11.874.289 nl.989.164 9-( s'

, ~

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C .pANet Utilit).n

%m tPlan  : Ay. . ,

'. . , ' < ~'n . Z v' .J;

.. . ': w

-;!nyestments am, i.c *.

• Y -

.9 '

CI .

~;Nu' clear Generating Cornpahics . '

1.57.1.

J p ,p,,1].712 , j "]7.644 f; ; Finance Subsidiary C.pc[' '

,l g .;f ;Aa n- . .

~:

k.,t; Real Estate Subsidiary i . <

i, / . ",. . . '; r ts-.7.997 , 9 '/.190 N;' ;+.?Other,'at - , .:

Cd. sti ' * ?. ' .,

4 , '- . .

".3 .

'176 '

~ 191' lp 2. ' Tota!,!nvest.me.nts 5.+ 4 - ,:+ ,,,..

X, e - . w. " :-19.885 . '26 596)

>~ . 7~ . .

., + s..-. . -:-

xCurre;nt Assets' .Hy ,,s- < ~ , 4.

• l . . .. b 1

~ , 'f.  :. A . ~ f >

.. t '. 1 3. ;. ' ' 7. > 5' '

,61541 17.773'.

. -  %' . . ;"f; Cash a'nd Tempoiary Investments  % ., .  ! .

s..,..

• Accodnt.s.R..e.ceivable.'..(Ne.i...of A. llowance.bf..$92.5..a.<nd' 02,..ah. . '. . '. . . .f 34.534 46.573 . 59

."1i61986 and 19.85fre,spectively) ,..

. ,.Unbi.lled Revenu. e Sm. ., y.3.! '

. ~

.... .L ' .O. ~W't. x$. ; P.c. .. , - 114.359 ? . v.12.661 .

1

. . . . M.; 4ygw. M.23.837 f.' %25.647

. . 'y >-

Ayd6 y/1 Fuel. Matbrials and Su,pp@ e a J. lies;at Cost . e' .'.hh@@TO , ' 7.383'.. . . J10.340 a : f.: , w Other .M. , s,, ' .m' ' . .. :. u.

'. Y

1. .- ': 1, s co. .x.c.;- .

,. s 1

. . . .c m, ... . .g.

g.,;mAi4 4'W;..m.,

t; EE 2 142.654 -

,112.994

' .c . ,.vt, Assets Other Nc ,W. 'gym Total q q.Current Asset's ,',. g;' w.g, , * , ,,, ,

m. nu - -

~

. - QSpedial Dep6 sitsP. 2;$m..I l -:e m . >U[. u e1%r Q% ~ ? ', . - 7.641 4- . '3.p58 .

Cost of Cancelled Pilgrim ~ Unit 2 Pr6 ject (Note 1). ' '

. 15.008 '

^

N ..

7.']Other s. .a, I1 .V:fW.A

. m.y p L n~ . ',2 w'% " , . I'x.E" .*v. . -

035.121 '18.406 f, 4A; .n ... Total x Other  :. 'Assa.ts. : 4 o ,. ..iJ c:.V ~ *. .

W,.r u 42.762' , ,

• 37.372

~

W fdf. - ^'.'e$.

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+.

Rm .;; . .' 9 ..

.w.  %.' .d i. % './.9

' $2.707.844 "$2.662.384 V7 4x.j ' ; ~-

AND.UABluTIES ~n ,G:~96E

o

1. ,'.sCAPITAUZATION

. Capitalization (Seelse[iariite statemehtshis :P

, , ~i .

3.I MC Stock Eciuitysl N C'G YY.W '.<

. . ti4 '

I 'i

,4 F '

d@. ommon Pr'Eferie'd SVith Mandatory Re . St6ckNM'demption RequiremF k$ h

$~ ?V(*NV,$[.763.867:j;$ '

• E' .

- Q. v../, A. ,4d ,n . . . m. ..a . e s 7T. %s w. @Q.p.-348 .; M 701.? 48,701 :SM

.k..;

3 e ou n atoryP . . .ti >

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" ~

.a m -<, . F $$ym@.Yh.w!'4.E!CMY

,w h:

M51l372.585.%. '/1.0'89.922

' ~'I 9 .. . o g, g j p ,' %Q%,, 2 542.8D2 y 2.467.5

%.$g g 7

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,d . t,-Term Debi to tired Within'One '

ar -

~42,763 '

M, w M24.495. ' M. .I.3

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~

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\. h!D.Ac.c. w M rued. T.a, x, e.~.,WW. em.Wh.

, W.

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,$$..  % M d2582I[ NI1D k

.,~. .;g'Oqpewews.L . -ihp,thir":MQDl%%Q.

J.%MToAld'urEn#; t M q: :b dihti5s.j,.[.;y%,f %yAO?'QMMiyMhjf45'154Wi

. # . r2:

Df,1greyl. Credits f.,g g/pa y,pH.;

s. ..

g.p,q,,%.44.#g*(3.

Q.pg 9

p g.

, q.3 .s ; a4)M -

3 % Accumulated Defer' red Investment. Tax N ;4 r S 'J ' .' ., l%

C@reditsJNdte i ~

D@17.083.2 MJ7.5

[4 ~ A)Tl.).3.7 dg i

. ..T. . w

. .Q.

. . ..- ic.1W, m a. . p -

376 y . M[Mi?AM6 [Oihir nkv h

.O,pElated m.g h Deferre'd ' h..INbE0'83$.

,9 W O,,lp.888; . -. , " 50.232 '

TasefdrM

. . - ~ . . O2.2 -

.w .,. ,

m 4.'O. . u.d.y.. . .

, a . e "_< f  %,c, ~ . . _ .

q. .g-

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.,f.;y. ,, -s %.i ;,..e ep/.  ;

1

. v.

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< - - my g+f.g;ommitments aric Contingencid1 Notes'&'9

.:52.662.38 2 imiys. :%*;.yn,.p;d, yp%.:

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State'ments of M 'Q,d,%q(,, MGrSMU@ s ihg.x,o. , . 4!.P m .. ,;W. w..e L,, .s N22 R '

', December 31. l (Capit tMr Mij hT(Th6(sinds 'o(Doll.irWM *G i>@ Ql>$5r WP.hiYSN 19 &5' l Wb"U.t.gW:.>.%[,M*y'i u,y

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J..a. Qn ;.Q.p,g,(cr pp .N . . -.

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. i MY:?,h.v.,e $ AWWjj9%Qniti.S[c'ckh$5.RitValuefaf~

, r .. s g:- 00 - t w. u, Q&.r,w.rgy.gi;g s .-

l,,.Q.QQ;:.v . l e-

c. 't <; .-

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c. .. . o " . _1 w s H.e mum.

. . Outstanding 37,1d).

.n. , Sha.

,6. 0.,000.0896'Sh ares m 1986 n a.r.:d res. w.a 37,191,896 . 4 ..

in 1985 : '?.f+e.M.a.n.

M,.S..'m,yl  % g.s <

7y i4 i,'l,ei. Other Pifd-l.h.an Capita.l@ MOW:@4FYiMTV.NN.4 S185.969 #.f."Y,.185.959 '. . M36.2'i8 L 436,219 S.

5 l y.,

s s e w.

',s. a m  ; r ..

g .p* c.; e:

a e y;.

.s,y.;w:z Re+

cp etamed u,;,gy:~ Earmngs , v. (b)gg:p. s w[gng.:

s#x 7g., a

.;.";p mww. y% V. .m. v- w 9 14 p f.6802 . . w "'. . 447.594 '

W.. ..

p '., p,( *

.1. :MTotil CommBn St'o'ck

.4 - w.;34p it Equ,. .m, p ,?p AMy -m.763.867; m. J1.069,772 -

"Cumulitive Preferred StockV WU. W..s.a. @M:4.TFpW,  ?;'.. :.

~-'.- . .i f.'

x x..m.f.p:p . ,. . ,

^

r./

• gM

v. !f.QM C'b s.,i. jf2R' '

6.W) .fl.t P4.Valu'e 'S160 Ni Shsesi SidrWXEtkril$d NP' 1.350,0dO'5 h

~

%'MO.k j~. ", ' 'p' g 7. ! $ MM9:MQOyts'Edini(B15,408 t  :

~ '

, v; y .'n47, . - #, A.- 6 , . d 4, l'.

"4

." Psl4g.

a.

Value .'g.. f .g< $25pr

• Cgut' s

.a Share-dn[ ding 1,0,4 Authonied 6,D00 Slures- 1,000.000 Tj -4 Shares'g,7/.'/.

2 ..

=,

c. ., ,,

2 . .

1

. [ ~. rY , f., j ' 5 'h M Outstanding harKg.]yg h;;.).; ' ' 9.g '

l 7: 's y' ' Dividend: wkW Par Wloe W Cill @ Price;.j.".yl Mr.'

9 ' "' "il;/. ,

' ~

l

% (. ,. . . :: Redemption Re ~ l 4f S,. 4y! ' , , . ' With 7.64%M.:[ Maridatory$.1.YS'100 .  ?.23,120,00d $quirements 'MMI53 B.6 9['chN WP ' l' iD . ' 14,636 12.000 'l

>' T. .A . ..n i

1.200,00di c. e ~K' '. 42,937; ' 30,000 . (

- ' '15.00.%

15

44 - ' W,.O ~ '.,i7: !. gG "25,':/- 25 ~' M, '" 2,400.000 628.86 " J .U.J,427.81 '-

86.634 60.000 I Q .

., j 13.'001 > O,.i N .)25Q. 4

!1,40'0,000?J %28.25 -

• 0:. e . 48.081 ~ - 35.000 13.80 .#'s. ; ' , .?2 51 .'. . .2,400,000. V, .

j i. 28..:457 y:

83.805 /60.000 li,{

. . ,. .../ ,g ? ,e:e.e . 380,389.. 272.840 j-a, . ' .'

. s. '

~

,lis' :s.Preferred St6ck R. edemption Due . ,. s Cd,tre'ntly';.

. .. 's , (22.740F 113:680)

-f. 3 2 357.649 . 259.160

. - .,- . . m. , .

Without Mandatory Redemption Requiiements (b) - , . , ,, .

3.35 % , ' :$100 <.' ' 102,000 ' 1 $ 100.00'. +

- 10,200 10.200 l

. , 4.50l -100. 3  ? 75.000 i

'- ' 102.00' '7,500' ' 7,500 l 5.50 (Convertible) '100 ' ,', 110.008' '. 0 100.00 ' , ,u. 1.001 1.001 . l 7.927 1 i , 100: 150.0001 103.96c .

15,000' 15.000 I

-1100- 25 ' i600.000 26.25 . ' 15.000 15.000 i

. . . \

. . . . u.. . . .,m. .

> . s. s  : 48.701 48.701 l Total Cumulative Preferred Stock--Net- , $406.350 S 307.861-

- , . b.,e , .. ..

~

...l - c e,3.% m f .. . .

.'./a.,

i ,

a

d. .E *# Mk p /  % -

,g .,

g'..-- 4

.. J., -.

~ .

l y .-

, , 1

~

f-

)

~

s. j s /

4 l

J j i

, y . . , * #

e # *

, 2 l m p 4 S

2

--8 .,.e.- .

e.

O -% .

.y -,- ,

4 d s.( g, j

,c, , i,

<..",I. ;f, .N.,.j4.=,

A

1. . .s l

36)

% F g

'f December 31.

, - (Thousands of Ddlars) -

1936 '1985-Long-Term Debt (di - -

'- .. r ' f 'f - First h!'origa'ge Bonds feb ' ._

7. . , p Ji -

• ~'

7 ' Series. . 5 -. R.. ate. ' ~ Maturit > M_, ,.?~

a. 1 ;l ,;

. $i .-

, 3 .

3%% ' - 1986 -

, 4 o .

'S' 6,710 c', o s s - ht 9. "i- '

1

, I' 'l,' A A-O@N@' " < E20,9 1992 E21'034

' K.;N?, h .]b/s',; %S6J/s" ' ?]<1996 7'

~ T15.069

,n.; MO: N 36% . .- .1997e H

',r" %.f . 4 113.462 13343 1, f 7,y g ;M >~ 1998' . , ' '

< % l $ 13343 13,625 7'Q,.7 pg , p< ,% 9 N.' Y;' 2000' l * *

~

, .f ?> ' O . '.18,274 ,. -L~ -18,382 '

a ~- 1.2002 l8,571 7

.R(.J" ~ ;;.7% 1~

5lig$;/ ' . ;M:'. .;18,3' 81

, . r. , 9 S '

9 .. c2004~ ,. ~.N 18,725  :.18.841-

. ; 9Wf , 71 12006 .'

t .' V ; l 14,30.4 .

'<, 4

114.304

, A 1W , # '10 W. *

-1993.

~

,e  !

',J l .v'T ; < j,9,126' .9,658' - E ., 9,727

f,X- '

_ , 1 12 , M /1999

- 5 .,

y 's,

,y- ' _ ; ? l^ . . . ..F24,135' 18 a

• 01989 -

24.135'

Z.

Variable : - :1991'

' 'b ,

$10.080*

?l0.080*

3 i. .

l.

-2 185,662 <

193.299:

' Less: First hfortgage Bon'ds PiPledged as Security for' r' .

, , , iGeneral and Refunding Mortgage Bonds . J  ; y A52.999)l

-(53,127)

.,'s Tota!First Moitgage,Bolids 3. , A..TM ' .h132,663 ' 1140.172 y .; W , ' ' ,Gerieral "f.  ; ;1 V '

N y. A. ,

• 1ahd Refunding Mortgagd .' Bon'ds J 7.by.. U O d 38,160 A 10W%l.

1993i q;c&.c ' 43.620 c

, ',~.', :B.

.C N

~12 : 1999 M M m:  : 60,000'

• 1 60,000 a

4

'.D- '

' ' 14 W ' ' + 2000 >9 7$s"' D - "Y30.060 1 30,000 17 1990 ' @ ,~ ' I ' ,: '

,;23.000 , , ' 23.000

El

e . 18 -

1989. . "J - v. f 7 50:600 < 50,000

.H

~ .

^

{,'., .:Mariable1 '

.- .<: y - :112.500 " . 112.500 "

?1991 . . .

~~

~

Less

. General and Refunding Mortgage Bondsl") '

..~f Pledged as;V 9 ' . Secur

,- : arid Promissory Not'e;Due 1991 J~'

' .' .(112.500) , 1112300i Third Mortgage Bonds. - - '*

l .. j* ' . g . <.. ; .

~

A- ' - 13%% y 1996.J 4. - 225,000 ' <- ,

B . . . J 1.0 W 4 . ..

.'2016_ 1 $. , ,J , ,

.m100,000 *", ,

Less: Third Mortgage Bonds ("*) pledged as secbity for ibllution ; ' ,.C ..f.,

. LContro Revenue Bonds

< Nuclear Fuel Obliga'tionidue'19s1(No'te 5) U 1

~

. -?~' \1 4 v :.L,(100.000) ~

-, i r -45.000

. I , -w D e..M:d5,000d5,00.0 V74 i Eurodollai Teini LoEdue' 1991 (Note 5 .c'.T.#

b- - Promissory Note, duc 1991(Note 5f.t :(C. ~ ', S3 M .22300.

' ~

, , -. Y,./. . ' .Proin.is's.o. ,,j d. '.cl' - Of M.' m- .' OsF.. pW. 'V.s.3, ' C. 0,000 . 22.50 ' l

'.N. .o,ts. ,en.ues,'1. Bo; . 7% D,dh.1986 < . ._ % i:4.1,,1. n ,JJ. , M.u:s,, L '5pM M. s c,' M, a.~M,@.

.. e. , ,

?!.,,1,bilu.

ti.o.g.n.. ,C.ontrol 3198.8;2003 Re. N v..,?,ge.. . ., ., ;,,x,'12 W - 13VW.

' . . . m. . . _ . ..

nds e.

m c.', ls.

% .W;y .s . .g. . 4, . w . W: Wl20.00

.ii20..

.. s ._

,. . A }; .?l0 W c. % '.c , ..  : x.,

i# j ..;

1 Debe'ntuf@,es}.2.'2's,.*T'?',' M2016$p" .,

., , ' ", 'j c 33 , $ % @ .?

(- - A qQ 15%% 3 1, .

• 1988 ; . , . T.h c-7-QW '/'35,000 ?J.75,000 ' h ; .. - ,;

J; % M M M 1'4 % p di J1991 T o 7:g $q y!,W.M.100,0002 011'00,0'00 CY g . . . / .i 15 / - ? ~ 2003 ( -  !

. . . . . ;M.17 W ' ,

. i '2004 ' '

e.l.@i W' % .43,N WIDO,600 r2425,000' "R100.0

- ' ~ Promisso.ry ,a : g No'te'. - Due 19'87 (Note.- 5) c .MM.W:yp,G

, .g % :mM .2.

1 R a, N25,000.'

U.S!15A37L 2 f8.437.

7djui

', Total Long'-Term Debt ..

~

. N: v1 .o..'. '1,227,729 .

'* . .i.essito'ng-Ter'm' te Debt td b8Re'ir' iEWithin 05ETe37.<WM.W

.. ..- {,U,.:rianiortizbd

, w .... .. : m - ;.

Premium nad Disco.udt . , %.r.<$.MM dM< N. (il'?,~6' 80iv... ' 9(95.044if.I 3 ,

.c .. ..

. Term Debt-Net;.r( ,.a ,' 1/  ;?- . f. ' S, , c, ..K g , u 4;p4...g g K, i

. .i.._ ,ton,h. . . . . . - .

r m. ion 4,.4s g~ .e 2p <v.- ,.?g3gga s .- m,pS2$12.8624.52.467.555.

?, ATotg.gtapja,t. ,

, .. a g.,g_. .. ,

. n .. , . . ~ ,

, s **g($' aN t.,, jd* wWe. , , ?,n 'n O {,*.[ <$ .r& *:.lC,W, .Q. x[8 * &.

v.

1. -,'*,q',

[. pr k&, .>} s ' *^ec &+U.lf.$

..[.'- =Y v.< -ID;.' .Ye vN.:.;',s OrrDL,%**$

s e

- o. h ' . y M.- < vu --  ? . :% ~

~*"# $T

. j . g[ .g h #

'A.g'4 4

.-.y

g. ' '

7 , #

• 4.,. =.,.,,.w[e 4 *m, .ea .%

8'*#

.l %"> f * * [*

. g% .

• pe, ^[.=...'4- . 48

• T, n

., ~  %. m.% f o. -p*s e .4 g?6 .. ,r's i * .,,1pp W.6m*

3

.Q y - : *4J , . ; s .dhg v c=+m #,,(.[Y b M MWld%h'h.-), .,[ MhMh. h', cc -4*M' *. e qh' M ,..[ r yh. 5 0.$. grtd[7& ., ,, f.yj a

s W/,Qy;*..y .' %: q,y . .. .

y.; w+ : %..y ..~-L s;..g . Q.i 4,.,cy; & w(

..n:y  % u .

'v . . , .

4 ..n

, , . e c[ x. f.'. wps. .>r.

g s-Q& v . . . . . <

n lg ' -

K, $, :;.,, y c.b; ., I-

%z.

H.4'?4::!,:.g m ,r c. .. m w ,:~ [f. . ? ':. 3..f. n ,.- w. .1.*

y yl{%,Q'$

u w ,* .-

~ ' **

i *

..e ;v,.c.a~w :Ab <MJ ion.'y '23' p ]:l:%

See'accompanymg Notes to Financia!Stitements and to Statementiof italilit Qap:

u

)

. yy :  ;;i,~ '. e s

, n .,ya c. -A 'M *, ,7'

- ,,;;? v.;

'.~g. c 1 e 't , 9. M;;vs: yl m ; y

7 e= . ' $,~.ps, QiNy

. ' _. , G:f;(;).jU;. .m w.w y:f1;.K p sn .C., >wm).g;h :.Qs. y'

_ ; +, M

. . . .s w ~ .'? ,. ' i, . g. '

. ,.

- \

e

• T 'V.10 s r s v" ~* m W vu e a . # '

f9'.f. 3,gm Q.y f *PW.M Q t. W :% &l)ftC'* ~

s a.# ww3 as..v. -.-

M T:$ 7 "~*q.yyy M:- p~m.vopWg%g.cy ' M" - NN .

, W.M,y'0/py GWi w,t r yy* .M'hDG k +,.% Q.n ' c';i'l  ?. .~ ':.,

I

' 'M

.n

,.: :6m js0 h9J,.1 WhWifM;2

~

. ; Notes to Stateinens " 's i DS)lnDecer'n5'6I1

~ thEd6S'E p End'd d'o'fr CapitalliatibriDfy18.375.00DWErahi5 iii'cf$'1f allo #GliN@derifin%{Qt[ajd[n;dE51 t6 the

q. .'%a%.7,',a.4 g wQ e,n v . Qggyb,

%;~ %4('C*abqd yW.>.L w '@w.~lhEEPshiri

~

m

+:'- 6'. f Comm'Est"6Ilf s

rsh~arejheMearrants inco afdh,?~ .

~.s accumuyated ti.~a186n.w.Comh.E.ri$tocR e ~n

• afte anuaryJQ9J8 le~ss the.

~ ~ - s

. .f f

-7 ggqEeg am8Ei3 fall n paid de WP

' o@M.ar , . .'

Q. ,,,%;t.h.'.y

+- o;.Y.NdiEidends.'c8sKaEEs p%WAfieIn y )~Sirice Apnjl984

.. ,, J b 6.exerctse,prge M1991

'e Co..mpany c

onutt c larid.

o6fIUIC6mrnofaEU 2 ' n S ails.'bf PIeferre.3.

~ -

Piefe 1  %

' 7 .s- ,y f , , r 3,1 lj88,Q.

g -

d .: n , ' , ^4StM6Ms'and sWce May~lp81his ndds'nE'ye'ciuire'db. egmgs,bj,S10(g9gerg,gi,ot c ~l '6- , 'f- *kSMh(hj;g Y h', ..

' ystdkinifEhd hayirients dEiKaETl f "Sto'cksc!IWPrefdirEdS'tEk'EfKi3e7 Ids 7r cIlm0Q ,

"latiUe and the'AiticfesT6f Agie$riisni'o~f'theg,$/ fdrIEd$tl20fith'mahdatbTy Fede'mpltioriW",.-

utremsstsloh b '

R Comp'infisciUiie thatthEdiiiddiids"oldhares'6ffrequYe'meEisTeTs j61f5Wsi1987Isid arreariges6

' C Preferr'ed Stock' beMid ifeldie"ahy fiiiidInds4 .[$ 22. 07006M9880$10

,,7' ohlini6f6f Coldmin'S't$ck'ild bFhaid.he Mi$ $13,810,6dd%dild0g 19914515,810.00' 0.NoW' .

- 11

^

'* Upsn[hE)'n6t" iNHPUC hisinix$le'd*a pay di'videBds an E5n'~ditidEthatMe'CdrhTE shale'i'ff Pie-% bien"rfjidtsiEc6 hfay,198d.W@ Pre erredSideklinkiEs' ' WE j!

..ferred ahd.d fist FUE MAMW "MD WD J.o u

by rt erhNHPUQ.5,.c, -

n e go . 9 m-

~

der , h,,ltu.th6fEze.~d16..',db..Md) The Lo 1 -

q. pfu., ommo A-s ~- -

-- - t ec c v.,3.?orwpn

+cel w, Sin' king F,u"nd requtr"ements are as fouows:.c. ,

s

'If and when dividends payablel onSI3M49,000i1990' shards'dfGj;;.S36.808,006.ihd

~

Pre feridd 19912 Sidck; E'ars

• in i 'a

. to idir ' full'quirteil idi9idE6dshh'e"hoide'riof5 $$203:808.0'00lOnddithIterm5 Bfthe Cor6pa6y's(

shai5s bf Prefeire'd Stbck havE th's right'tseldEt f. Tis 5ftfiss indbni6fesTsuEstin'tiIlly an utility If a'mijoritp of the B6hid of D'rEcI6(s.Since i .

• ?,gDrdperty'of thb CorEpany is'subj6d to the lienQ' November 15,1985, the Compiny has failed to ? . / the're6f. , ;3 '

' pay lin' excess of four fullqtiirtsrly' dividends dnUyg(cp:.On J -' .

~ -

a

- > ~

shares of Preferred.S.tock.' arid .thd. hol.ders of thex First Mortgage Inde~nture, i .no s"gntfi^ cant amount Preferred Stock,vottng . as a class, have elected 3 .

a majonty of the Board Of Directors of the ~ . ./ ~bf F isihidrtgaj;c B6 rids map be iss '

" operating license is obtaihed ib(Seabro6k Unit 1.

Company at the annual meettngs held since' r. , .

~

then. Holders 'of the Preferred Stock will reta'in; 3-c .. .,

this right until such time as all the dividend . ,s arrearages are paid in full ~ , 3 The table below indicates tNe amounts of'divis dends in arrears at December 31,1986i 6' Dwidend  ? ,

Rate Shares ltr Share 1 ~ Total  ; ,

With Mandatory Redemption Re'quirements:w, ' .M ; , 'M E

7.64 % -. i 120,000. ~ $2L965 x ? S ' 2.635,800. i , e, ,?

.4 ~ '

1. b m 9.00' i 158.400. 25.875 , 4,098,600 11.24.' l.200.000 . l8.079~ t 29,694,500 . -

W i: .

17.00' 1.200.000 2

12.219 ' f4.662.500~~';E '

. ' N '  !-

15.00 1.200.000.. > 10.781 12.937,500: , .;; _

15.44 2.400.000. 11.098 26.634.000 .j,c . ,

13.00 1.400.000 9.344 . . 13.081.250

• 13.50 2.400.000 9.919 23.805.000 ,

i S107,549.150 Without Mandatory Redemption Requiremerits:' ,

335% 102.000 5 9.631 5 982.358- -

4.50 75.000 12.938 970.313 i .

5.50 ' 10.008 15.813 153.251

[f. , J 7.92 150.000 , 22.770 .. 3.415,500 ,

11.00 600.000 7.906. . -t743.750. ,

n

.~ .1

• ?

S .10.270.202 3 e ' e ',#.

, . "n - -

hy p d.

~

.;ll ,

sy , , - .

s- ,{:-

.s . =

e- g

& e- ..

e, 3

s

.. . ,. - yo9 t W. n a.. .,. ., "r E .

,v.

, e wg . V g [*

e.p <:.:..,,

.,. gm>; w. .. +l

,?, s ., m".,

-, y;y; , e - %,4 .. ,. c~ y. '.

, .*j,,

. s,: ~, . ,,.

• n

1. 4..

3 _ , - .

n }!

StatnnEnts of CliangesMy,F W -

.- .- ~

For the Year Endid December 31.

Jn Financ '

+ ' '

19 % J1985 . 19A s;ggMw@Q.,,lal gyp, e . d i_,.1.n M Wg?y< OSodtbe'of n,/;. M W A & F

. . Position' Funds- M~" .

O, p. .erationsN w;

.m ' y.%Thousa'nds ' . _n, A. 3 4 of o,,,..'. DonarO ~

w . . . . ~ . ,

wu.a %. O. . 3 yy c.' .: ,~ n y, G.y% p..n, ,. ~.w.s $(198.3651'CS 154.74 s - .

c 7 come( n ) .nm.in.

, .A@t. p VK p;'i(m  ; -@w@pMyM.. rom,et ih.9]f!P i i lNo'n-Cash Qharges(Credits /tBIric~ome'(JM;f.MMNO ^ '. ~ Lcss. .

' n,v. .,. . r:S 156.600

.$ 'M$.[:%h2QThkd. ,  ; rncpa gDept,c2iaii' o g;p?$.p.p %.[.MbflgQs29.79'5%h25.6k. (22.728

~

g j' . .,>

yfw4 g.gp.A,JTA.

. Amortization.of Bond Premium and Discount ? -

lld. dan.c.ifcii. E.(l.l.iity.WFunds Used,T. . .1.694 -

/f  : . f.; - g owl . 22...'#m'

, t..l,y. 9.,,n.J ^,

i W.ebMg.n1..W. Mn a.-Y.M.mpM.124.69

~

p.,pDu. ingr Co.nstruction$

, ~

g ,;M,e ,.+,n.g

'j ::jg .

a . i ..f 4103.9121:

ggq eg.gg.eDeferrfdTaiesTridIrssstmentCredit'ndjdstrnents M(30212)W 't13.85' 17 TE. 4.590. i

,c a Era 1 m H 7, V L'dProvision for Cahcellation'of SeabrookE F ' MN? 1,'q:ME e # ~

, m. .J .%.. Gh. ,e. .! . 8.y y;T. . t . Unit 2 Pro r.e .V: h p44.. f5,T.,Pyovision u.

fo.jectiW. f,Pilgr.im;p~. ': M

- m . . -

z

.f Jg'n r Cance!!atio.no U

~

a ',y n.n;. .; ..,ryrw P Unit w 2 Project'4.# - v, 15.008 . t- > -

,,.. J e y

y M,.. .f;. jpc, .

Tota. l fro + x.. m Operation.s . ,

• M. . p i  !., :153.140 . 81.700

., . s , . . e m - mfrom ., e . .s. g ~ . . . .: m; w, .O .3w 'ic/ .37.869, W v

, .;- e .

Outs.de'Sou;r.i ces e . . .

+4 ' # ' ".

~

' ,s

~

w %: % r.Incicase 16 Long-Term Deb't u A ib t})cd . '.281.065

~

l'30.936' .- 341.706 L

, - . ., . - / Sals of Cdmnion Stock snd Warianish iS m A . . ~ S ' '. 7. &$.. 23.841

_ , J gQ% Change in Short-Term.,Borrowings.pf % .:.p,: . -# M i F <(145.485) 145.485..

e. R s 314.549P 5'11.032 T. .. [ e. Totaffroni U.iitiidE.S.o.urce' M. . '.,. L'I15. .h

. . m

,.'.- S' ^

. . . . . . p .-  %.sDeprease in Working  ; v,;Capital y ..2

,, y h,w .s. ,. 2 :.$

s

.7 C../-E:.M257.869 /-.

O ;., D , @,, y

'. s . ,a f

. ; 7Ahpl. .v ,? Tot.al:,;.-f t;'c,Uc / 4M t.9. 9%u(pl

- .c .w r

.o c,Q.$ 318.934 :,s '296.460L 7$ . S 592.732

" a .

M< ' vVi '

ication'of Fynds"m. .x ~

J2: .T'.g? g-%@2MPrcsieMdditioMN$$NCfi@m.,. .M.~ ~ 23 S'3595'O . $

f%d.O %';S36k6lTei8

$ ' 84 342) m L., CTAllopance for Ecluity, Funds;Used i .. ' .. Y  ? M. ; J/'. ,

24Dwidends - .' 9;.,3 b y< '.. 'zl ~ TQ.e:W.,. j(124.697! ~

. t.t w ,

gd , During Construction' .N,.

,mu -

. .: 1., . *(103.912).

55 %  :~

s.

' W..

. 'of Lo_dg,T.. erin.D.eb.t '* -W. ./ . ' N.. "o ...4 .24,701 nf*. 1e.

^c ' Q. .. ,: '<,W.

Y.Redu.ctio'n i22.972 ,

170.381

' Reduction of Prelerred Stock ' '

' - . '; 19.060 i 6,072 -'6.060

^

t hr Y fIncreaseinWorldsgCapital . - 9

• S. - .C i .29,103.s -

247.518

'#, ,,fQ'Special Dep6sitsMW j e,H q * ",'. L. , k.p 3.683 - '

1.527 ' g 2226

?-)+ .1 Other Applicstions-Net?A. J., * * $ 9.396 . . ' V167' ' c(2.384)

Y, ,

e

.4M m, Thid!"4, I . . Y,.,Y

. u, . 4. ,. k$

~ l 's # . .2

. r ,. m,. _&.

'~

'S 3'18.934,YS 296.4601 I $ 592.732J.

,C. ~. . .. . .  ; incre'ase (Decresse) in. Work,.. , '

5

. . , . . . , . s., .

. ~

ing Capital Other~", 7' W. ., ir ; ..* ?. *,;' .'+< , aM W ',...

~.-

T '? . -C. .U. ~scr.:

W.5M+y.Thar.s.Sh.or.t-Term.:4!Vjp.2 Borr5/.i.r.igs . j $ 144.768e.i.' Cash and,Ter6pci x .

• L.'$(244.483M.S.179.769f

' M :(12.039P d@9448) - ' % I3256)

' f .'c1C y 9

%.i C CY Receivables'hWMbMM

,7n [ $;.f.f.inyn'tolij$$N' Long-T bt to Retire ~d Within.-One;Ye te^ 9M tie..

M'is"EM-h 4m

1. M[s ,$$8.N(1.8 18268"u

't,'f/(2.664) $p17.529)

-;'n 4 44 s.

s.

/'- ' -

. U r.@e?"{a - d Stoc Preferreerrn p D. FM9.060) e.kj8.336M'ti Redem $,2480 6tion'Du~

. M J.422.3_33) 6.060) .v (6.060)

~43.799

h. . . l

.Mi^hrGejlTak,ey]%.3,f

1. FAEd6n'ts Piyable?.W.I.y%@*S,i$,$p+f@ g-%gf;  %. m g$}

M" .,2Estirnated Canc~e,t,llatiod. .:g%.c Au / .:

.d T< Accrued Interes. y . .s (16.190) osts for Seabr. oo ,k . itUn..s g+,m..J. 22421 .v"2s315. . -

. ,y . v. 4 m ~

2 W.

9: M ;rv ' r- s. J MO

.W ~ .'.;O.tfuir?g$.0.,M.s.3.

- w .

w@he.c @. W.dr. .

l3.9.6.0)> d,.3. M @D15.323f M E.. @... i.

. 9 D T,oty g .g g /gj; q lj g , K.gp '

MggS 029.103 L.J S(257.869)'. j $ 247.518

' ,o'sht'ioNf N QC i Prhth'ditibh%.f@Mh

$$/' $ @'.

e '

_TP.

~4 " Join

- m w y&,g,kh, 9h.W 5,31.1. 401M. 3'.M.

e w eg lear.fpel G.W h.'g gy ?W 4 4 '

9,445

[. - - jq ;dth

$gy.,g,.e . s, Jg.yh.94N R1J).5.25p. S

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l[,;ro,,t W ,.gw e%i;.@. .w .,.xde  % g m<, Q g . @ g @

gr% "s Ns7;688 %ex$ 36t936 % s 342 O .k h

u. c n w - u y 7 e4. y .3n.. ..

N ..,bn-Ne M ,'dhi$

3,. ,

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M;7 N S

N. g,t %pt m.. p ,t % M7.y mj g ; g , p. g y3 g;3g g,g., g @s. g g y ngat eg g g 4 "go Q '

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Ngpf .yi. f[i*ipgdQDe3%t)MFyf$.hfirFD B.il'sce%Desd$T31M83 7,W.y$ 3@h.327MJM.98k h S4 y# ~ql'U . . .

. , ~.QW "@%'A~

%. h ' s M G Q P'q;#-r'd:dC$fiDiyfde Q ('i R tIncoin,e'.$ 1 ds@,V.RM Q$hj,A .N.Q '.h, MyW$ 156,600 di 15.

1,.', m..:t.:)'l$.$ .

y. 3:ghipyT4cnnrid@(StockaS@fj,e'CS,M,M2:4M ,7 i .'

j -

. , , c c . f.c .

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. ,. ; Issuance.r.e. of Common e. , . .

m$g4l$@.MW,@g$

T ,.4.y.,C..p.9, Wa Wsy.aPli/

x 7

A,t,,ps 19,,610) pj;g;C,f g 00..24.9.y 12 .

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. r,.:M.  : Sto k and.

.. W. . .N..W.. ir'rLits%u, cM JN.n. .> ,pyy, hd70d.A w%

e

.t.,.

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- )

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+

W

,,.; s - ..

y, g, .ca. t 5;.r Issua,c.-

n'ce'. Cost of Pre. ferred Stock;

, s u; ...  : a Dec's. , > rember,31,1984

. w..: ~ w- . ,.ey ? %.,5; ~ ... .. .. . , .

W.e i BalaEce' ' 37.191,067 Pi$ 185.9$53' S 436,320 ? S'292.8523 $ 6915,1272

, ,y;.;*y , 3 A., ,,q;f , ,,A '.< , ?. TLyKddiDeduci)2WSGQ'./ 2 '.R WTM DO:WDMM@M ~ M;

.' 2 1

. ; J.c.piW. , ', . y. .!> N /

1 ' .mUsu~anc'e 7.E M.t o(Co. Ihcd.'me'M'f.'d. g , o.',,gq+.M. Stock. n 5.I.EWlY i[ .ti;.'NYN.%

, . . . . . . . . ~ ..~. n .

,1 Q' , N mmon 5 ., 8299@'e@ .,, .2 , g .- l .' :;,j;n s "

1 106) 9;.

! -r ,c. ' v.  ; ". . 3, C(106)..

" " '. _ . ';'..;p-

.. s

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Cos.t..of.

.. .v .Wa..r.rapts

.. .s 3 . .-

i JBalincelpecembb,( 31,1985 L 0 ' - .37.191,896 F. . ,S185,9  ? 9;fS436.219J.fS447,594 S 1.069.772 c

. +, 4 TAdd IDeduct) i..? ' .'i's.,

'iNet 1ds' O e; $1t/;;Q> . . . , ".h, 4. . . .' . '.h,7 ' ,U.K. fif ,G t 7 ] l 'f' ff* .

5 7.'1198 . . . . 365s u .

(198.365),

, .a R.eclassif.i 'h,Pf 'd .

J W. .; .p....*,~q.;V .. n . .. ,

cat.i..n~to re err.eE.-' , ?.s;.<.i.d,'e.d' il. .,. + ^.,4.

, ;. Stock o. + , ,: em:y e +.'

1~' .

, . . . f c,u,m.ulatwe..,.

. ' <J, c , ..

.. . .. .,. . m

m. 4

.. a dwidends tn arrears tor. g" '. . A , . .jh r, .. ,

iv,.

.r .

• o Preferred'S,'s M.k t w. i.t.h. .

' . ' ','r.f.4.VD., ,. . L . -. g, ... .

ye y . , mandatory redemption; , c ' '

. .requiremants c .' .

. .- . . , ;'W ' (107,549) . di)7.549)~ l

^ .

10i;" " ;(1) 9.

. . Issuance'of Common Stock 2.000 - .-

"4 '

. Bafan'ce- Dec.e'mber'31,1986 . 37.193.896 '-S185.969 iS436.218; S141.680 $ 763.867 .

~.

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,s . .

'h

%, L g_ r 'y _

s s

4

_. E is - s i j ,

5 '.

' Notes to Financial, ,,1 The requirements.This amount is predicated upon

.; Statements

+ , gene, rating plant

^

Company in Seabrodk, is New a 35:6% Hanipshire. joidiohmer ' ieceipt ofof thearatenuclear' increases described below and i S ^

.. ~ Construction of Unit I of the Seabro6k Plant is if such'iale increases 'are gianted only in part or

. 1.Cornniitnients and r i,"c6mpJetelAi December 31.j9863h8.Coinpany's '.. are' delayed,the Company's Eicternal' financing 1

- {4 L Contingencies .1 sil.87'6,050.000, which Griquirhme6ts'for this p6riodiillincrea' se

,r~ 5 ' . ' ' ',1Eih0estmeni , fep'risenti69% of the in Unit 1 @'C6rdpEfs rotal i asse'ts.? '

[, ,

'% ., g ipy,gurs;uirit t6 Ngw Him'pshirela'w,'ri6firt.of the $,1s6bstintiallyf j., , , 3.g Cornpanyp.invesdne,nt,in,tfih,Seabrook Plaht 4. ;rj3 depchdent 60t onlyI@on th'effactois directly 3 ,

s'

{.

'( ,imay tje reffe{d ng segcepthe'Companysl?! fals6 t$oN~faci I <

- .mpnces,pr,cni i

p . , - . . ,/ , 3 ' customers.;j, gyagggg.4 4 g

, Ar' trol.Thsse'ottist factorsiriclUddt'iniety reg'ulatory St ~ 7~ , . , - ~ '

'Insu//fei,qir;CMFliwiC6rrently ths Corhpinp'sf ap'piotils~requiidd for'such.finsn'cings, which.in A-

,v. ..= . -e rit'past hav

.' s.'interrially gene.  : rated. ,ca.s.h,is. .liistiffi,c.,ient'.t.'o sat.isff,/ the, 'r'.c

' tf ,~ w . v v ~ -

- nd contesteql

~

procee. dings,

u. .

its capital requirements.or,to pay mterest o,n they extreme f- 7 wCompany's outstanding' indebtedness.Through.c H the effects on the financial markets of the polit-

~

t.

' tiie, financings completed in Feb' r ba'ry'1986lthe C; ital unceitairities ietating to th6 licensing of the

'.C.o. m. ;E cash r. n. y faised. funds. huff.il, led.foi.Ys estimitid.(,.Seab.r6ok Plaht an. d.

, ,. m ~ . . -

equirements until June 1987, at which time g other ' electric u'tilit2s with . nuclear power con /

! 1 ithe Comp'any will ha0(exhausted its'availabie; .Mstrucilon'ptdgrimi(including the other Joint.

, [ ' ',

lfuri~d s Onless it has bden iblit8 c6/nhlete'inew; TOwndis of the Seabiook Plant), and the accep- ^

.i.

extein'al financing lThe',Co' n %rifis'in the prof # tiiiciby thE sechrities markets of the securities l'

l ~

/

' cess of seskirij fr6fn the NHPUC 'a6'thorizatidni -b'lnfoffeie'

~ ^

' to issue a sufficient principhl Ahibbrit of debt 1

~

e .dThe Company's ability to finance J may be limitbd not'just by'mdrket fa'ctors but 1., , " k. . J sic.'ur.it.E,s.',dd. sign.ed t ,jield pi.cR. h. .bcis

. . . . . t'o. 'thW'3.d.~ eby' tfieTotal. a.mou.K.t of del.st"se'r.v. il..d wh 1 , , ,7 ' 7 'Company. estimated to.be~necessa.ry to enable pCompany can reason. blyae .. .xpect to carry.Tlu.s

,. M 9: . ' ths Company't6 satisfy its Eash reciuifements' ' Slithit may be'a funcition.not'ontf of whether '

~* ,

s Y.. . -

"A. f th~rdUglithEend of1988;Siiice tlisNHPUC irid Marid wh2n'Seabr6ok Unit l'be'gihs'td provide l

.T

( ? tis New Hanipshiie Suprsme Coiist decisioiisMservicd to customers! bui of the political, eco- ' ~

1 ' A inianda'te'a comptshensive"ieviek df firiancirijs3 j- - - ' M ',  : .M :f6r Seibr'o6kihlatdd'expshcliiursi'ihe CompanM;nomic on rate'incrbaseshn'afte'r Unit I coinand conijsetit

~niences -

servMe.T d , 4 % @ ' R' d . - ', -

1 *

. l t ,./tnterids io seek a'uthorizition i6'iss6e initially.M'}$PrNeding '

r F

7,l $220,0g0,000 principil'adddril;of li

~

16ni-te m debt- ( secunties

~

, ! ,145,000,000iwill

$ be,used,tiy ti

,e  ; qmeet'its cash requirements.for.ff . n66-S Company to ; " 1Februaiy 1986 include

reigtyd construction expendit,u,res ,

nng the ' fcohtintie't'o

< du,eabrook, 15 cur 'extirrial fiEinding g.sicleiati6n to fund it's of *he

, s , , ' penod. Abthonzation to raise approximately Z . i Seabfock'obligati6ris#cr should seek protection s

, r. , $J00,,000,000 to meet,Se,abrook related costs and H nndei the Bankfu

, . . f(-

4 -

Jcxpenses,,,dunng ihe,sameyeri

<)ssuance of,additionallongjerm@ debt secunties the NHPUC. concluded that" E Wtll stibsequently'bh'gursued bdfore the NHPUC f finibEsts of'ths C6m"panp's sec'u'rity holders','1

.I Y, J^ .

~ .it,is..anticipat,e'd.,that exten,ded hear,mgs and,courtjfgjfy Bipe SUtebf New Hampshlid..Th

. "appegw! roost,likelyoc,

!! cur,before suc'h auth, issu'8'inapigain tid 6risideisd injroceeclihgs- '

. qnzatgnjecomes, final,if at,all. IiNHPUC jpc.g;fy;jVing; future?firEindirgaEdlif c6n'sikred, th .

( - l8PP!93a(of candoi'p'rdidtivhether,the e NhlPUC

C%f inan,cgn,g ogram M,t@,t,ia,1,segngt $fihis,extynal NCdniiiny'ihiji I basis anj ifayeppg,ippog, andp,qn a timelp[MFreashsho Jg,;. phic;h'wo,uld got requty,NHPQC approvald ,

.,shoufdrtot be wailable to .replentsh its availabib such fiiancins 6r.Et E L ': funds,p6 Company.vgty.be unakle to meet itg.0,tc entif tisdly bMi&EnibId the Chinpiny to ly.gg MGhgall66Ethe d26me'due?

o. .

, 3ifit,Abga,nons mates M,hfFyxiNiit(based on y the they assum%Co become dugg' Tginy,es,tipfQM,;$ f r

ptions Begnbddg*

O -

NRC dahtEd a'J0?yist M(belogthat it will'need ep,erna,1 f,inanctng d

,', , 'dit' ions lFurther G -

.h .e pcnod.1q87,-]9916f approximatElf$fj0 - - g d '

.<l.,,. tn ltion'6f Unit 1,it is '

'[y

• o er .,

a rmlhpgnst, amount is needed,g

. . ssitmated' internal cash generauon, exc6ss,of.K@3y

. frcidrlto consr6en'di n

"< - .; , 2 ,. M.", ,to Eind conn N 1'

, w@e bt. . . idd.t,idn'e...x'

~m.s andperi.ditul,esistimith'd

, ' u. z .wm w to'ti,s'$.482.3.M  ;

.9 < . :y.4

.- a i.st milhoncto.refin. w-.c, e bt matuntie . - - an p~ay .r. .., cW. e -

p ;. T. .o

+

yQ.ylm t.v~ .,W.w<.r-e-,. d

.y 'hi,l y:- - yg f fl , \ $l 94w.e .

• I $ ? ,

.s. , n , s,j? 4mxgw" m ,JE M p p k ;. n . A& .m ee.r u.c . .

Mm  %, 5, w@ W .m f g y.sy.Jp vWn n % -

a j h,e . %. e;Qf.:!%,qdhh. ryn.%;1p&gp.4.m r ., . ,M*-.e.W:%N99 mw- :symm p:T.n. u. , A, .

y ,,.#.!nl.5 w;..: gT m,Q % e. w .e,

' ~ <- 4 2, '

., o 9,, M n . s s .- .

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.,.g. -. .,t.. t L. y , , , .

.[ , ( y;f y'I ,,a ,d *h[ d '. . g a ';.V,* .S j j

',1b ' . '

$ ) hY. .7 e c) 4.. ,. j .

• d g' Nf yy,{J,g'

• gg.Q[.- .p'yfgk*gy,P .% b.,f

m, *wo. a r y h* % m u-r n'%y*=ce g e; f fes.,w r~m*" " **+: * ~*~ ~e . . " . " r% , .: . *~+ ' i' 1' "p y h, is '

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.ar -pow, ,.t

'MN p.

• y0,hh@. L;c/, , saus5 certain pj the other. conditions placedond,requ,e, scessaryg,goj .,. ,du,ct,lo., .~. m .

1

., Y . nylsq

~ -

st far agoperle(natio,na,Ily:The ogle., w .. Com i;Y((, C -

y on W 3h Jg.6the'op(bbdr er'aIinylicdnse.'Ftielloadin$as 65rsplefed f aridlEroincliidinTth hEer"teits hivilicenN%

o inteNenorslifthENRC'pfoc6ddin'gs,9 I itMM YUdt M4  ! dridth'e ' 'Tatsuran?Ittnf EticKifitfrVeittioES-

~ 7, E t.-

QM*h@;' h%["lo%fdt'e'dilEfdweFt'estirigE

,;' ,N. '?.g<p~.

.g.  ?>,e.)4.*go,rg, n.u

.;& tEeWC'iS

-, n..u.tk$. c^eTta$fiEdir

~ K.

site; emergency pre ~paredn.iN,~.w.;tfdis~PS"dtngs ess fuch fin r u- .tcT. P.L vill ho( elap*'6.0.eTati8nTrith.c'e7cisIof c't eg

,- ~ p . .

WA'J n

p Ka

. mare not expected to be made befdre Xpn11987 4 reftEtl to cooperate in the p!dn$ing process u s/.e. . .:;$.gf!' 4Y . J. YM

%, u.

t ,'. : h ii I y > q. A.

,. 5i on YEd.' nEBb

w. y ,. ,q..

> ..'>C..

? make the.h i,i.6,ing.d.,esys. IIth'e..'licensirig'p.i.,cd,,e's@-

a. .ctual.dafe:o NRC an

~

lity

?M) is .9 not.]x.Py trf,nWpted?.

commercia .~. prep.a.d lv e y%' % %qwg.f op:w"rauon inestimable.p;Aby"t

z. e .J fi.-. .':.; .The NRC s curr - re p...s.y & 1. W .g g &d.nNnblitNMW lT llx Y hifob$.. -

/.

.t/- - nm- ~w e

' J' / M py. aer ..e.w.,en.t.%.gulations

-- -. .:43iPt encywill not pe, r.trut , e1 v, p etion ol'co 3

• F pper ra o g .sc.;n y.m gg

~

3 response ^are plans,ation,.until,. ,

in place for' cities and towns diol, g1 cal.cmcrg. on of'the size ofr

.: 3 # Tithin iteMrhill'rdditis.of the S' fab (bold PlanP@yTh,e second thclErrierfe5cpiespcidd$rie'for alternative esaiu' a'li6n Y is re Mwhich*inciuffis'1N6 sis iii NeW Harnpshird nd %Grp6 sis basedIlpd

• ~

. '*', sIMiri KiisiEhdsetti. In'itial em~e rgehcyYdsp6nhef Seabr861Qlahi's des'igrddifsafei fdctoFsia C j

" < Y  ;

1 d aIs pl foiNddismpshire have been'submitie'd

~

~

c $^rFdU' tion ofihe'dOEuati6 '

5

' AOME NNl'aEd revisions to the plani'desip5d .7 radius'p8u'ld'eicliIdithilbGs lo' c at6d irM E

'.- v ' <

s' e

. - > ' l]'ah b@ia'ti6nal drill are

. currentj6 address y beinsevaluated

^

Deccinbdrnitain deficiencies r'evealeddun 2198stiffou'Uner'nbers 6f the 4 .""

. ~ ' by the app'ropriate agencies. Hearings before'anO].. New Hainh

> >'M.

4 - ~'

f

, . .< % ...pRC. . Atomic Safety and L.ic,ensing BcMd onm..> - m the] [ in a,let.i8r t6.th.'d.

,Chiir.m. a. .hT, o ,

adequacy of th'e New Hampshire plans ha,vey 7 their oppos1 tion#to any'acu,on by the.NRC which'

• ' +~

, 5 t ti.e.ch, schedule.d id hiay 1987.. ou d .. -

No plani fdr $Issachtiseits or the sidiassai P.^^*"8 * "*.M. w. w. ld. re' uc, e'th L ' ~ .

I J 8C"CY I ' ""'IC^f I

- ,,emergqncy pgarednns. Q.P *#' P *",lcemba B

' chusetts kxdlities have been submitted by" .

1986 suc.h a pr.oposal was filid with the NRC by -

hiassa.

~ c huser's authonu.es to the appropriate 4 o - -

' federal agencies for review and approval. The . the Jo. int Owners.The Compan. .y is not a,ble to; ,

- Governor of hiassachusetts has stated that h. . . .-e is . . predict when the NRC s.til complete its review .

of the proposal a'nd iake ac. uon . thereon. -

actively opposed to the operation of Seabrook . -

.i and will not submit such plans. In view of the , Consequently, the Com. . .panyy is unable to predict. .

h'f assachusetts Governor's refusal to submit ~

When or'if operation will in fict occur. If plans, there ire only tso altematives for com. Seabrook Unit I were riot 311 owed to com-p!cting the planning process. One altern'ative Is . mence operatio'n the Company ivould then most approval by the NRC of a plan prepared by the :likely be unable to meet its obligations as they Company without the cooperation of hiassachu. become due. 4 ,'gc ~

setts atithenties. The Joint Owners have been For curreht financial forecast purposes, the

, preparing such a plan, but there can be no assur , Company has, ass'umed that operatiorm:ill com-ance that this alt.emative plan of action will . " mence on' January 1.19,88!although it i,s unlikely.

succe'ed in_ obtaining NRC permission to begin. . that it will'do'so). At that time, the Company's' '

operation of Unit 1. In late February, the NRC / . investment in Seabrook U6it 1 is esiirdated -

~

issued for public~c6mment a nbtice'of proposed E .'to b'e $2.060.000,000 (idclu' ding AFUDC of ru!e making to c' hange its existing rules with 5 $960.000.000 but excludins the initial core of respect to emergencp response plinnins. lf the ' '.[uraniurn fuel of $ 75500,000). Delays in 'com-

. rule as proposed becomes fmal. commencement m'e ncement of operation of,U. nit I willincrease of full power ope ~ ration would,in limited circum - .the Compiny's share of the cost of Unit 1, prin-vances, be ' allowed even when there is an ab ' icipally AFUDC, by approxirhately $30,000.000 sence of state or local govemmental cooperation - ? per month.

~

in erf. site emergency response planning.

, Limited Rhenue Flexih!!:y. Reflecting the Com- .

There;is continuing strong local opposition iri pany's Unit 1 investme' nt in rates on a basis which '

hiassichusetts 'and New Hampshire to -

. keeps, thd Compiny's rates competitive with participation in the planning process and the oiher sources ~of power which might in the'short accident at Chernobyl has intensif:ed that . terrn be available is cri,tical to the future well-'

opposition as well.as more general opposi- . beirig of thd Company. If the. Company were not

, permitted tojre'flect a reasonable portion of its Unit l investment in rates on a timely basis, or if thb Compahy's'r'at'es bec'oine so high that a ntimtier of its subsianiiil 20ffbmers tumed to oth'e'r sources, it'would be v'ery difScult for the Company to meet its obligitions as they become 4

, o

. , cop , m .:

; t., - . . , -

• .. ,' . 4

.~

f n f h.' .

.. 1 %dui.EffeitWe'OctobeFI;198d,two of the Com. - electric power needs.The Company cannot pre-

', ~ r r f.; piny's fo'fnefwholesale custbmers,which for

• didt whether such a proposal will be acceptable

~ bthe twelfe' months' ended September 30.1986 r to ths NHPUC. If accepted by the NHPUC. the

, jacc'odst'ed for 12% bf the Company's total prime 1 proposal will result in the Company's share-

,' '?' .

. 1silis' ndn a i

. b- : ,s jfiord,jiiE. e..ppr6xiinalely 8% ofits total revenues '

4

.t.a.le. s.,.

.J

.' .' fi_vs ysai. period.

.. . F. or.the first three years of that

[d-a.8,5Jh.yJ 4 9k. . ..m .. . .x n "lC C CO.'thmo stock W6uld be' negative!Andther result

.a..n

,I

.g,2 pro e w comprehe. . a'nsive rioun.ce'd rate p . ath3N h ' flan. known as 7 s c P

^

%r$ f2000, desighed tb inu/s its custorders : TPayment of divi ed Stocks;cven if n th6 Company's Com-

.c

' Ithitih'e Cdinpa6ys rateswiliisthain'competiX .

men.t of such

' X@Iivel,Ths'Coinpinj's Pathssp rate in- 2000 N.digeg pr6posal ,.

' ' ' ~

j

., oi}t6riipla;tsd nonjS'eabrook Mlated .,p, ,,

_ ' nThe Company anticipates lif the NHPUC does

' MO creas'es,oj l4% r in 1987 and *(% in.1988 andlSeibrook ietated inc' ea

. a ?.,yesif'c' inm6n'cinh d is 1988. The Cdmpany has .ixsal or some similar plan and the rate proceed-

~4

.' Naisjmid forlistimition purposes'th'at the ini : 3i ngs .before the NHPUC follow customary rate- )

J service operation of Unit I would be January 1, m, . making practices, that theie will be extensive

'N " 19881ilthougtg iiis'unlikely thIat this date%ill be . icontroversp'in those proceedings regarding the -

',>'L.,s; [Jinei).If.snp'n ('of these rath'incre'se one a J amo'unt of the* costs of constructing Unit 1 includ.

Mppfoidd bh NHPUCst'the Pathway 2000,ainder the ofrem,leicinnte'mW jible in the Conipjidy's rate

" / ~ @plited the , 3have been'made that construction of Unit 1 has inc d

..rm.

J se,r,i,d. s."w ,reise.s -

'i.t..now a. pea..

m.a'y ha. vi to. .bs.

a v adjus. ts.li fr,ij 3, tieerfrhytnanag's se. e.s.c,o ,n,sabog.,S.ince. initialnon Seabroo.k . . . . increases t , costs found by thexhc~

re ted.r.s that. t e.to.tal . s,r.e.s.ul.t.ed in. ex. ce

~ . ..

.

' NHPUC to have been piu-i'@,wof c$b!dbsTs d d Tde c fed nWo

+ * .. S,,+-l%- y,ysubse~quen.ig .ifica tly le.ss.:'t.h..an. .~.htipin' ~.. n t.h.b~ase.

cont.emp:latsd,-t - . .It,uld.

~ be included. .in is possibleadj~ustments,ma panys rate .

that.a substantial

'.d Compiny is currently unable to predict when - f. po'rtion'of th'e'Companys shaie of the' construe;

-7

~E' Qafid if such*rateTelief d maf be granted or as men '. tion' costs'of Unit 1 r TUnit'1. N' M' ' : 2.S 4 . *M :iai~ tiase, ,

e th Company c6uld be're' quired to 1

5. A$o'thei t bl chaige the' disallowed amount against eamings.

7

< ; d b the CorEdanythe not to seeldecovery p(oposed frbm plan  : In the isdvent 'an ofciffer such disallowance or a pro.-

4 ' 3 New Hampshire cbstomsrs of its investments in . ;l nged phase-in, the Company,s future earnings

' S6ab'r ook Uriit 2 and Pilgrim 'Uriit 2. Since th'c ' w uld be materially adversely affected3nd addi-

.CC6mpahy' believes tha't any fin'a l'decis'io'n' by the ' . tionakxtemal financing would be required.

f.3 iN s , HPUC o, n its o , y sThery is go assurance that the C,ompany could

m. provision any for# such.

p'ro. .

recovery, posed..p.lan.

the Com any as ,w.ill ,.obtain i.n.such blade.

n.'

fi,nanct.nSa.-

.r t sof Jun'eE30~1986lrecofded a7esdrvs.lncl0 ing QJEMoredver,if ths NHPUC were tIfind some por-

,u_ 3:es.o.t iniat.6d he lid 2,bilati6r,i"dhiry.s,,t.b.'.p'r6..- .. .wm~v vide fhr Ation'.of'th'e . ~ > .

Company's' shiremdf.. Unit.1' capacity ;

.'l3 poss.b,le.s..t non-r ,.o.ve.r.y e s r..e. asonable. ,

4those i.

as% sets,.7he

..ec.. Com..of pany ha#sth elevc

.o . . investmen.ts .in G.. . ,;.4to. b,e.in

~cted n.ot,to v v u

.rex.ces,s of t

~

V filsliih'th~e Ndw'Ha~mpshiriS0pielfe Cob'r't'3n9%.

th'e'decisidrE6f th'dNISHimbshirdS6pieme- needs,,the oNHP f the~d.ec. i.si65'6f thinvestment C gC6uit$h.3!d,is,[n.s'N.m.m t6 SPUC's'appio0al. o. -

'.m5. .9. . ufdrther'd,pp~sa!.

deny,~reco..veryo

~. .

1 6,s f hitsN,HP.U,Um.i..to.2.a in Pi.lgn.s m t .i m

.s s financing Co%  ;

comple,tedin s

ry Febru

. - In sally" $ vein 6ei.196thESc$fd6ok'JointW$iO88. ~'

Exclu pan,y,_' Ele,'stich' Dwridr ,

1- :c,

. y. M'. u f.,, effec.y.s E. .c.s,nizi.ngi.

tiveycan eiled.. voted to reltnquish to t

- f9 ' j.M.t .r(. b5s j

at ntilsuch time h.at v . m. .  % -

Se. l.b.ido as such capac.ity..is required vib.e$'RC ,th4.o i E.6 b i ab

. Mand initiated.h.s.tr6ciio,

%.4 ,;,

a program for the disp'nTe.

o --

s  ;, .

ositionridit of Unitfdi'Sc.as.r6.6k

• sp ?e . .

l W.9pany cannot predidt Uriitthe'ra 2 Vlo. f.

. treatment s.'t.hB.Co.

..V to be rhpI LTT2 Eq6ipihchthvin . ac'coided Uiiit l'by~the NHPUC) Fut6're'eunings '

diSTE, the^Chijany^g 's frivEstniefita'n'dt'sa!Yags in thds$ asset # Valu'e'. The*r'e? @WoEld! b sn ESi@i.d agiinst ths sese6eyeDicin. sly FrNN'yIcict.ifit,t.h

' .vY.a e-6. w . iil'aie d' #.

T- d. s. , -d..ths e estimate cance

..r.. d. . 2.lStio.anc .s.v rge.s.

ha. _ for m wJ. e.flected. c. . mg ..' ate,s E. p >p.,.uM,y tn

.M.,.w(' n wide a.nw~. ,..s p,;;: m.eab ..U,mt .a .g y:;:-.. p,, m a.

. n,,

rook ,,m. 2 revised wc w. ~base md.,,

a w onj:urther study.Iw,. .

u g' ;y ,w . n. 4.. . -

. r. s. . 4 W+..

y h g . ild.'t.he,Com, pany;ha;s fornialfihng not wEmade a,:

• Mt.C. 4 .',. ,. . -

m., 7.wz.y,C;pq ..p;d.M ..

,J . ..

A thtfye-

- .j Nr, . .

'" w.n n, tbx re a ~ dl w.. spec,.t.to a n itsi Pat . ayas,,puNi:cly W'ad7,. ., a~n~nounted s.

@ w: 7,',,;'Q7 N'-

p. J- jf+ A . ff ,. , . , # rate pla. ,N.. .HPU. .C wit.h., - Ib . ? 7. E 'h egopo f. ,

r ,

fQ~h,JO ' n~...y.a.ny; theM t6 .

,3

- o.

< . W -{ .;.]1

.pd,.g.

.t panyg jomCrs'as Id. d,r.i.ss -

,poSsi

~ :ble,s the.'Eoffe'rIdo,,filib'?OI,'b-y% ('r .f j T>-M.

k,j rpf, ,, ' t.,'. v. . G

. g~Me

... ,. w ..5, .

n ' 4 t.hd,'$.,e.'a.b.r st .U L. ~$.&.

. ra.te.li.icr,e. a.ses..and w

.to enable cu..s. ;.. lan with~res QTQ;tomegjo .

ir , >

g. a~. w ..,-at qi;&

a:

tery

p. $ y q ';

g g' :t 'n y, pg.p3 g.,,, if.g.

3,.at , n: q  ; y.%)qf. .Ylc:.,s

.. w

.rl m , t ,:%., ,4 2,n

y. p;q.wu. .4.,ggrw e...mc...wkp,a - . .,e~t .j- y . .p;,g ;gv.- , M.

,m > se: . , ; ; 29

. . ,., A.7n r.3

-a 9.

' . A . ., .v <<

< > . o i , rn . c

= 'eWm. yQ , W: ,< . ,- g n 'ty ,. . n.,w. . ,

_. ,, Q;.> g 2.r,k 4 y ;* . .<<,

V.

,[,,f

e I

; M !p ' 7.m.% . p %c;&QWE

'.G XUMW!v.,.s.9WTfpp '2% %'MyA'M

,W'F . M W m:iaw  ? 7 n. "=^!.L;DY b.:~ ~ ^ 'Q v J b".*<

• ? W: M L . K Os*

.~ U;vEQ g

k. .t.Y$.Y.M,,,,%Even 4- i. . u.m -

ni

- - n afie,( .: Unitlis e .

ladbd ~

w. in.T.~er idbefa'tte,inhts rs a - . - - -

.y

, .e/.e,%,/ety -., w . %m.

~

.,. ..y,m, u. long.tcrm s gh~t.m uce. fat.es Uni . w.

. .w . .own.s.%ith.i:h. wits'

..v service area have -.

u+(%(o.t r ,1.in. hi.cw event..o.,f,%.x,ciu.e.

e..

. .an,y could.. v ot. r possi ~ m.rce s. ,o m m ,tmpoEs..n .,oinif, encar any W, power, y s ~

rg inc se

..'o./_T.%g r %.:.. 6. ~ , ~ , id.,b,e_ - .

< ,A lid.." ist fc'o(ns,fifu,tS..fr.,f.E, o

of the q. ommpan oral a,s..s.~ets and ! .--

s co the gA: sources of su.-

rEdWlude .'th.i,Y lfgeneration.m P M, .c."s.ed. f,3on, sm br.i,ti

.i U . s:.W

.a. . A.g<n

$.. .;F, , m~ . . m .u u e,ofa r

~

t

.-. Aw.- h.t bw..pplyd wmnn>- e short term such . -!

nyg e

. .. s..

ialw,a 3.,:s. w.4m.u n, e~ .+.e - .v_m . o .

4

.so.

craun .rc..gu.

ca acit ~ d.o.

p.signi .y-can n ofits w, W..qt.

el~ectn. wer f w c ~ge.n.r%u Un .. .e._.available n

- igg.,

.r .. -

cp . 4 .x w.

ounc iisc~o:mpreHertsfve ;w, . m.~.r.om

>u m e-Slab ~roo.

'. My4.%' a'1%.%;. @ .v f!'he Corh,ppy o

I t.

/. . ,, cergpacit

.WScM.Y#.Y N rs'te Froyosil. Path %a%2dO0cd6kenb'e'dib* d mately mcteapate.s i'eithsuhtantiallye..@} more cant a] ,

d N t$MM MEsure'its'ctis'ibfndrsithithbtEih'sMdity t'h'eg gth n9 got! !d,Seab, rook U4if,p Rate increases of g T .f' MQlMW,dotentialidf Scaffo'o'kYe6te'dlifiinfrnsbsithbp%.Pd"Y sjnaggtudpgou! , ,

osjtton and'the overall ,i V 'E S. -

',7*' g y;?$'4 Cdnipiny's"rifes,h'ilfreinaftfc'driip'etitiE Dudi'6',i v.M{sh'e2u ,g -

>l d y-;.iMdMA '

< %j l, . . D%

Y,fn.Q..,N?

1 Sea 6r'$.& oMhr'als'indelse?;aEdinbdfofth^e klQ S & h W & & $ C' Cor%% . ,1 . :'s.C ' &

2; Acc6untidg (.m F,. :

l" Standards Changes - Q- ? NSiarid.iid's BoarilFFASB1 issued a'staiefnent G "that may

~

^

l l , y' > ' M'rSFAS 90'{thitsij;nificantif chih[es'ccrtain" s " the NHPUC iill alld@ Seabrb6k relat'ed iate -

'. i "* ,

g'eneraIly~ accepted accdtinting'pridcipibs'fdr Win'cre'ases'th3tYvduld ciualif9. urider 'statemsnts ' '

x- ~

. . N ' . regulitsd en'ter;irise's. SFAS 90 revised accotirit- ./ that may be issued by the FASB, as a phase-in .

~ ,- s3..; ". ting requirer 6ehti fdr' plint'abandonmerits.' 'Ed a

, ' ,j

,i

'regulatork'disallopanciis"61 plint 20sts'andf. dete'rinind that [.J.

~

'pla'n"or it isojohg' ei met ihe~

~

teatcriteriawduld

'fof ciEse g capitallialion Bf AFUDC. SFAS_90 wiil be effed: ' appl 9inj;SFAS 71, ' -

~ '

s

.+

j. ,tive for fiscal,1988; The FASB has 'also been '. U l D6[ending upoh' the uitimat[!evbl ' and forr'n3f '

, reviewing the ac_coun, ting requirements for , . Seabrook'relat'ed'cos~ts and rat'e increases .

phase-in plans. After considering comments , ,

allowed and the conteht 6f a6y stateme6ts received concerning phasciin plans in an earlier -issued by th'c FASB on these matters,it is exposure draft.'the FASB concluded that addi-

"possible that the Company will be required to ' ,

' tional consideration is necessary and will con:

recognife losse's that could in the' ac,gregate

, sider phase-in plans further at a later date. The eliminate the Company's retained earnings or FASB is also reviewing the xcounting require-result in s'ubstantial retained deficits. It is also ~

ments for en~terpnses that should no longer possible that the Company will determine that it apply current accounting principles fo.r regulated is no longer appropriate to capitalize AFUDC industries USFAS 71') and could, as a part of the related to certain Seabrook costs without reason-process l establish criteria for situations where it. ablc' assurance that the NHPUC will a!!cw would be appropriate for a regulated enterprise Seabrook related rate increases sufficient to to retroactively apply general!y accepted 7.,. . g . recover those costs. The Company's earnings accounting principles for enterpnses in general; cou!d be materially adversely atfected during any

'It is posstble that the NHPUC will disa!!ow'some such pericid.The Company is currently unable . .

amount of Seabiock Unit 1 cMt's. Under SFAS 90c to predict the icvel or form of Seabrook related any such disallosncs ivould be rec'orded as a ; . rate. increases that the NHPUC will ultimately loss at the time'the dis'a llowance became' probable - allow or the content of any additional state-and the Company could estimate the amount. - ~ ments issued by the FASB that ielate to these SEAS 90 would also equire that the Company matters.

. d e S S

oh .

a

% r

e 3.Surnmary of . ' Regulation ami Opcmtions. The Company is sub- mates differ from actual costs incurred. the .

Accounting Policies ject, as to ratesqaccounting and other matters, differences are deferred and refunded or charged to the regulatory authority of the NHPUC, the to customers through periodic raie ' adjustments.

Federal Eneigy Regulatory Commission and, to

^

The, Company records an estimate of revenue

.a lesser extent th'e public utihties'c'omnussions ' for service rendered but not billedf '

'a - .

.~ e

- in. o. th' i NeW E,ngla.n,'d ;.3-- - .

sta.tes.c 'where'.i.h6.Com2R"etail @ customers are bi!Ied a"levelized energy

- *~ ^ '

7' .

(Pany us,igesspygg, ,j ; ;y ' . cost rate tWed on'six-month;ir'ojeetsd data fori quity ' _

ctistomers are' billed urider fuel ad, fue

- . l Inwstments. The for .its'omp1ny investrne foUows)h'e) hts in' $.

. method of xcounting  !

l. #%justment -

/

.m. ' f nuclesfg'enentisfcoinpihies 5 whouytodied ' "clatises.7 [W l .p.(

~

overseas fitianii^subsidia?y an_d a whoUy-owned i

' , real es, tate subsljinry.The debt issued by the . > lAl!5vlmicfor Fund (AFUDC).'AFUDC is 'the estimat'ed ' cost, during -

1986

- : overseas finance subsidiary 79;was repaid in,d. Th'e e- . the t pdricid of construction,

- - of fund

~

.iand th.e..su,b.s. r owns four i_di^O"subse9uen.,ti to seven percent of eac o . ..h uidate . h. f ' the construcuon program wh 'l

.Co. .mpany from 'c'ust'omers through current revenues. Su'ch' aUowance i

s=not realized in cash"cu;rr ently but c

- ~

. four New En8 and l - ni; clear 8en.eratin8.'.o.mPantes c -

and, pursuant to purchased power contracts, is under the ra'te-making process the amo6nt of

. entitled to its ownership percent opotal plant - the allowance is expecte'd to be recovered in '

output and is obbgated to pay a simtlar share ~of cash over the sdrVice life of the plant in the' l operating expenses and returns on tgvestedicap. ital. Approximately 7.5 ^ ~

the Companys total energy requtrements AFUDC were ' Sof higher'pldni at" net-of-tax ' annual rates'of costs.'The'Com 11.7%,12.1%.

~ ~

,  ; . furnishe,d gy,.these companies in 1986,1985 and . . dad 11.9% for 1986,1985 and 1984,'r espdctively. -

w - p y;; v ,.. ' . :3,

.. 1984. respectively. -

': ., t .: . O ; . : v .- .. ._. - .

7 , ;j,_ Utility Plant. Provision for depicciation

s. -

'.Sb$e. Inof .utihty. ".per Earnirigs commori Ikr Com 7

'c , N86 the loss shape w

'/~ plant is co.mpu,ted on a straight;line method at .U. 'calculatsti by dividing earninjs'available for ;

crates based

" '  ; salvage es valu,on. estimated service lives ~and .1 - i.7 conirnoh's'tock by of theleveia!, classes of property 7 mon stock'outstahding. Earnings per comnion the a, 1 -

The depreciation provisions were equivalent to 2 ioverall effective rates of 390%. 3.93% and,3.73%. < dnd comm'on . e '

. - &g of deprecia6!e property for 1986.1985, anc 1984s ,. in 1985 arid 1984 by'

- despectively. ,

_ , .'(experise t; hat so'u ld; result from the application

.;Maintenan,ce, and repairs of property a'e. charged gof the proceeds from the. assumed, exercise of . r

.#  ; to maintenance expense. Replacements and 18,37.2,999 common stock purchase warrants, at

~

.; better'meAthire charsed to utility plantJAt theS an exerdisejirice of $5 per shareiin excess of f tim 6 ' pro'pytles[are retired, t'he cost of propert'y ', those'prodeeds used to_ repurchase 20% of the ..

t : retired plus costs of removalle4s salvage are

_ Company's outstanding shares of common stock,

~

"chaf[;dd t6 thiaccu'mulated provision for' .: . *. : to the re'ductioniof outstand '

.e. , c ;. , , .

Ydeprecia'tfo'n$

n u, w '/d J ' Y7bU . 4.lC h.!> V: and (ii) tiifresultirig change in'AFU

. Op~ra:m,;.w eq , .. d; 9.gReven.ues.,Rev.enu_es .o. n ,w .~ re.sbltiE'Edh..in8s 8. are pt av ilable.~.fSr'cbin.hi.on.

.. n .t.. ..o

- ..r,egulatory c :awas 7 then the wei8d. h.te ivided .6.~.b..a r .e , ,sb.illtn.g rates, au,th,monz.ed b _ pplica .l.e..-  ;..~~ r v,. s.- . n .c.o.m...m nussio,ns, m

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r 9--

N. "%;@turrent-Federalg. %e a

.[h,% .I w$$h?gg['w, ,Y ^ 4 , S 31,.444 . $ 43,386 .

Dq(age;g 5 32.064 G y: / ,f ck b[h.kS$l5' k E,q"y'.5 . '

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Z.:M...;.,Q. .O .

. . ,: - 6< f$M'Wg,@.c ,s s t

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4 , yh ga. pense . Federal ml7.,wp j $-@

, ;7 ..

..'- .TotalIncome Tax Ex S 6,937

< . , - pV 1, g. -StateiM . . , t.J;c p u g..M X $(30,21$)4 $(18,950) 3 3 n.

<~

' ", f.r.@. ~.a@~.5pe:

n .

.M. r.y@4.t. .,;P.D1M(1

, . y:e, W wg w p..g; w _ . . . .yM., . nps g.; $(30.212)q $(18.947) S 6.940

,s.  ;%

' ' ^*

.~ , y . , . , u g . . . .a , . . Q . . . . . _ . p. ',;; :yf,gg.QR?.W:

_ 7

..,r. '

'.4  : On October 22,1986, the Tc.x Rbform Act of ; .. d.I; vestment n tax credits" utilized are deferred and

.t 1986 (the 'Act')WaWigned into Is.v. This ActWill!6 aniortiisFtoEcome o'ver th'e' lives of the related Nadverse. ly affe.ct' c. ash f.. low'but'd,ub to'the. . ' ' H tD .e.

, e,

.  ; n . . . .

.'. roper' tie'

. ,s.< ' .A..a a. cb..i.nber'31,1986 tiie Company Company.s current tax posioon and favorabje .; vestment, tax cre.d;ts available to carry

. ' r. transitiori rules to implement the riew tax law /M; t ad m. - fcirward which expire between 1994 and 2001.

. . no materialimpact is expect'ed iri the near future.

~ < The significant reduction in thb top' .lafter the corp 3 rite rcquired adjtisiments ( ].i It by is'the cig'y^cted Act wiu be that

' tax rate from 46 percent to 40 percent in 1987, ., $65,000.000J <

and to 34 percent in 1988 and aftbr.,is expected . ::gg igge; of dif[erences between pretax to reduce revenue requirements so that no g.  :

ncome in the firian~cial statements and income material increase in reported eamings is antict- subject to'taxfwhich 'are the result of timing pated. Furthermor'e, it is not expected that the ,

differendes, dre acEdunied for as prescnbed by effect of tax rate reduction on deferred taxes NU

, , and in acebrdance with the rate-making policies have a materialimpact on revenue requireme.nts. of the NHPUC. Ac'cordingly, provisions for The investment tax credit has been repealed Aferred income taxes'are recognized for all effective January I',1986. Favorable transtuen

• >eci'ied timirig differences. Taxes attnbutable to

. ' rules wtH pcimit the Company to. qualify all et gther timirig' differences are flowed through to

' the Seabrook Unit i expenditures for the credit,, '

. net incdme as adjustments to income tax althesh credits used after 1986 will be red,uced. . expense / As of December 31,1986 'the Company A: Decemb'e r 31.1986 the Comp'any Hfs, rfo' tax" had not providediumulative deferred taxes of purposes, a net operating loss' cariy forwar;d 6ff . approxims.tely $47.0.00.000 relating to various approx:mately 5385,000.000 expiring in the year . ' tax deductions w hich had been flowed through.

2001; for financial statement purposes the net 'Ihe principal timitig ditference which has been operating loss c' arry-forward is approximately; . flowed through is the excess of tax over book

$247,000.000. When the excess of tax net operat- . depreciation for assets placed in service before ing loss over the book net operating loss is 1971. Provisichs for deferred income taxes are uu!med, deferred taxes will be provided for ..

recognized for the following timing differences:

fmancial statement purposes at the then current .

income tax rate. .

. ,, J

~

fBousands of Do' tars) ~

'1956 ' 1955 1954 Normalized Timing Dtfferences - ~7 ~

2. s 'i - l 4. l ,

Relating to Plant ' -

' ,' >lM .: c. ? , ' ' JS l'3,742'

.$ 9425 $11!45

- Deferred Fuel Cos,ts .

D ',, M 1,530).

l.257 f J. > usa

.r5.245)-

Excess of Tax over Bcek. Unused . ,

~.

a :O' Net Operating Loss Carry-forward -

'~, i. (24.733) -

Other

• A, ~3.333-

. (3.526) I2.061)

. Si29,700) St 13.577) $ 5.276 b

32

,7.-~-

.t .

'. c' . J

~

Le principal reasons for the ddferences between calculated by applying the federalincome tax rate

. [totalincome tax. expense and the amount . (46%) tolincoine before income tax are as follows;

. s. s ..

. , l. .c t./ - - (Thousands of Dollars) ..

- ' F -

1936 1985 " 1984 /

\

.g

...t (7W,:.lp c y. fj. !hdd .. v. (IM,,Bef,dre.

- x. Income Tax. . . ' . - -

$f228.577f $135.795 ($ 163.540 i

., ; r i .

Expected Tax Expen'se (Behefit) .

u "..,Lv

f. 3,$O05145); ~$.$~62 .

75228 466 l

'_. f .,2 Incteises',(Reatictions)in Taxes Resuiting from .' ~ ' .1. . Y$ ?f.W.i .. ..' . : 6,M . .  !

, < ~ W t,s ' J.l'AFUDCEcitiitp / ,i:! Q. ';.g y t .4 . i +E W%57,3611 f$.53.465) ?.(47.799) j

.U -. .4.;i ' Net-of.TaEMeth' od of Recordirig AFUDC .  % .MM32.006)f .J27,403) '

c. v - n d,h V { , j

@RevdMAFyDC Difference be' tween Bool(ahdTaxV on Candelled ,' d 4$ Nddehr 9

@ 3 Projects 9.

~

. Depre'c'iatlon-Not Normalized , ,'

+ ' - m " J M3,018 .' .. . 2.343 X M 1,969 r ' lOther Deduc'tiSsi and' Adjustments [: y ' d M 1.660')

- ' 'X Ii2.8'88f - *

$4209)l '"

i. Unused Book Net. Operating Loss , , ,  ; .113.547 ? '

• l

' g$$ (30212P $ (18947) ~~$ J 6.940 '^

N ~. 3 . 2 n, J. .'.- Tost Income

...,; Tax'Ex;5ense

n. .

s. , , s.

,, ,j . a

., /. 'y, . . '

D.f.w~ gOn^ ' t ..I. '

5.Short Term ' o - -

7There was no short-term debt'outstandirg at .1985 the maturity of $130,937.000 of this debt Borro.wsngs ' . . .

" ' Decembe'r 31.1986 arid 1985. Sh'orider/n debt  ; was exte'nde'd to vafious futbre' dates in excess .

- outstandirig at Decembei 31'1984 consisted of a of'one yea'r[ Q _3l

• i _

$50.000,000 lipclear IUel obligstio .Inf t Mof bank debt'and $20,485.000.of cri, $75,000.000 redit from the' ' as~o'crEaliorif M-W.h i 'k;Irdih,short'/ eri

. follow .i- ' 1 &-

,s Seabrook Plant., During" .. ,+1.  :.png.;E. . M.;l6 ,;

4

. .e c i,;/ architect*.

- / engineer

- u.. for

,.4s.

the:.2. - .- v. , .

c.

,' 't '

L .M.1986 .

.' . ,...,. iThousands'of Do!!ars)

- Y1985'" 1984 e .

. M Maximum'Shdrt-Term Borrowings ' Jr

.s

' ' .SM i $ 4E$ #0,000 ?$145.485[$'242

' rAverage A' modnt Outsunding' ..u?

. -  ; ,1 -Average,Ir'iler6siRate (Including' Fees) - ^.,;gM../6.137

" W Y d. .4 i. $ 83.048 , '

' ? 9:At Y. eaf End. f. 4s... ~

%During the Year P. ' T '-

.,'.,'.e'N >

• ' 1. ,o?..-' .' 18.31%* ' M. . . :i e . ' - J .113.23%

, '13.41% . 20.68 %

, 'Does. hot iri.clude..com. mission an.d, prepayinent premium aggrega. ting $2 800.0,00.1. ,.-

. +,

. p

.  : 3,

- , s.y j M._',- _, ,

~

6. l\istemployment, Ibnsioir Pla'ndhe Company has i'non/contribu- ;The' weighted avera~ ge assumed raie.of return , -

Beriefits tory pensiori. plan covering substantially all '. , used in determining th'e.dctuarial present value

~

employee's. T.h.e'.C. om' pan.y'.s policy',i,sto. fund - -*n,,'of, accumula.cte.d.., pl.a..n be.nEfits wh. 9. .%. i.n. '19

- m; -

current pension costs accrued. Costs.were : . " , , and 1985. ' a.G.y't; "% , .;. "

' *

• c'-

3 -

$5.148. 0.00l $5,343.000. n . . arid.$5 572,0.

. c 00.in 1986 x "n <^ -^ N ' *d * -

t..19.85..,.and.

tizationast.r1.9.. of . p.84.~esPCcti,v.ely,and,,in..clude.>. .. : . ,.. Hea s

. . - m. am,or . p;provides certain h' ealth ca~re and. life insurance service. costs,ov ars p - J bdd'efits for'er'n)fdyde's.'Sobstaniiaflyallof the' '

,.7

'

• Acc.um..ulated.P.an,'bdne.

s l I P.a.,n. net asse fits u and.er m 25ye.s,. c be -

c enefit pla,n.

as , n e.- , . t.,s.:mbenefits w- Co" if~pany,s employe'es

--. fo.r th .s. .

. t.ie,%,of g continue.those th ~ reach < retirement

, M.

anua_e .Compan.

,ry 1,; of e.n a c.y . year is a,s follows..W U ; >'

m .

m q m-f.i,ne.d.

-x- .b. s v- -

i-, e e - - -

. e >D e. age w.h.4le wo,rking for_th+Com.. pan. y.

. os..e

%. y . . .

.lThousands%f Dolfars r #M'4986M.M1985 '.., e

e. ,.-w - -

beg. pts.are prpgid,e,d or admtms,t,

.-insurance companies wh6se premiums or,

~. . A,c. .tua. rial Present Value o. f a . . e .fgiy'.. .pF ..y.QediM+d on thb'bEniffis"pailduring e

%. y .w, .t

+  ; > -

e -

', a s. . : thee y'e'ar.'Th"e Compan~y,re~ cognizes the+ cost of

' ' " .9Acc.um.uf.itEd P.lan.B.ene. fits.$ 7 87 2.V.es..up ted . '.' *, e r d .' e ^. z..,4 4 45a66~9 -

.. r e' p+"^ovidu: g (."those be' n<efits' by"exp~en's'tng"th"e. n'

. - S. 2,261  ? ann -~ual~- ~- insurance premiu I <) onv .d ae 62 730 <' ,.,s.

.a -

r

". $.fi.. .N.Mm.e..ste.M.A;.g. s 4

i

. - r . m.

51 P-d.a ..a e . tie,;.s. . .. [$5'0.217 Q.x$47.930)s.

g..

l .~3 m - - e is.stefy"$1',200'000.

c... ..e .n .e. . 'y .

7

. . , s Net Assets vailablegg;; '7.s. w%.;. y ,.gW., . -Ny gempfoyees.in 1986 and 1985, re. , A9

.p..qpjnr%pectively.: , .w;e

m :. .

y

.s. x,.for'BenM?fG9^/

p.wm.%2& . $&5.269,fM G 569.846W,0,5 .g. % , m:M M w.6 M M %fEt?  %.& c. W

~

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, M %pgq9 q.i

', s a.-

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, ;, ;. .,,; .y y n. y a pW; A.M.,g.>.yj: ;_ g;;p;.t e.Q. , g y.;,py. .; .-p %r:; W m.,'

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• • *,'*tP9 w..p m. w*-y

$er ***as sap 44 7 . gy ...

w' e.,

Oef . )g Q vl'f L) R r .

afwp *7.**W&*4cr,7yp<NJri'*Narw**,wJ i

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y

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= SMw';.)4;M.:f  %;; Dy.a -A s

..gw pW.M. . n.q W. E g ,; g

' ,m:%. .-%v 3 r'~.,e.

yq m ,w , mn y.Wgy, s.g

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M

,'x,7. E. Lea,ses WQe p d.fJy ;-S.e,T.he..C,orn 7..h. n As a le'ipirigN'h.e. r' 9 ase 4.L.cm. y {y,ug,c2.Wari portion o th.duc!'elt fuel for.t e Seabrg#ok eire.,n.t Planta! eases 16r.af.a.a/ werus' tle.u..f,iy..i6e.r.i. 's g m for,,6orics. .v, pe,lla l..

as tieciPcip'itilised for f!Ea6culDWM. NM N ~ t %ed N N'W d V, W -fl

'.m@.. s  %. fQh,@p;Q,s/F,DNWryi8rti.ng'yu'.5.W'MMp6/,.EW.D-3ThQ;lreese m e .. s

~

1,p89/%,p#'VF, y ' *?9, . WSM5,9,00'01 '

ond,r,N,c.l. n.r.

.wgA.w. 4y le.. . mas .. - m pe,rtyjrom a'wh, o l.ly,.~ owne d,re l6 8a - E m .H ~ "-

. . o.

n. ~,.. m. - J.. .

w w n. . .. .e . . n ~

s ,

diary. m 83 qy.4.estate . ww.es.c.e. rtain ro.3.M 4M*h("[f",a.v.19f}.1m* 7 730,000'

. ',[,[b , .j%[,m ,

I.2 subn . hh' g

- .ffMhhh khh $4.'398.000 .h 3 ,

hMg'Mf@' D,M3'32',0'06snd

( m f4 c. 2',d0 ).f

' ' ( o .,, 4 f @ , i, ,U.N 19g4Ge*$

, M. ffc3pe,cij e. is,' . tR b ,er,ea l 28.895,000". .

. ,%. ., e,,a..,

.'d. owne.d real e.inc.w!Ud.iff.r.E.

- -(ivfi.olfy:/.W/e%.w om p'a,Ag

.t.a.,,lftd.1,17, . w.f.*r

. , 5.j. 4 ~ 3.l w-w

.At Dec. emb.n state subsidiary er 3f ,1986,estimat o $.

..n.,Rd f~uture mintmum

a.d  ; 9 .m,e,#n62es^

w. P%a

$50,740.000* y . ~.

,4 tr.i1.986e .A@MW[(. mjdh,y1 P..s.g..g%, ..x in. W. ,p.s . t

• - "m . *Ns.n.f. w . w.,ssgqpKEtW e,+.

L .>,

g

• ~ irt'ers ieflect the seasonalW '

Irdormatiori" - Vand,i6'thE opinion 6f insnageme'ntUfa fairs QTnat6'rfof t!SECorntari

8. Udaudited 1

~ "~ .

f Q' .f

+j

Quaite ly i' ' iThe followirij@uaiterl inform

~ - .g W . . , < % . p . y * % : gg: ?,. . ~ ~% p ..

/

,a q f.g.p..h .p.

e

. n..

i

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,c.

W , s.f Q ; Cy y yog/s,J3t.W: E Sidd6r M.M'4WMe C .% -: Mech 3L't' .

h ~'f ,- [ITh' Ends cxicpt br Sha A$nt's) ~51986.' . + M85N 53% '

• 1985.'1 J'.'986PM' W85N .b94.-  % 198$ b -

$133.705'. $111,723.. 5121.601/> $116.6.40r $1pd7f S157,19' j $146.747..

.' % 76perating Revenues d N ' M 22,649s ' ? )R.y"/..i $1194361, hf 20.4803 D .735 :

• i

+

, . r Operating!ncome' f4 6 2 ,W D'.O M

.l r ess on Care.cIlatioWof

_; Nude ~ar Proj.ects . . e<

d...

m

.c

,.^ IN" -

' , 4, h"5.000

7. O. 8.  ;? ch -

g,q 35 : e h.*,.C8' w %'(W'*2 w M  : " *~S \ l . i 1 ,c. c. . .<- .r....

.d-r f.f .C '3321

., T43.726,.M/ .u;,~ m?s.'%...: D:

,, 1,. r N,eiIric.ome II.issN. .? L. J . .!41.034. t. $ 32.687 4,g. 38.235 f ,

't .47.;dj

. ,,t 42.782 -

J . Preferred Dividind Requirements

, . , ,}h1. } .10.24O

.iO245 . i 10.245, o310.24r 4.10.245_ . 10.2 4 ,-

, f {.'; . ,10.240, ' 10.245

, s ,M . , , ,7 ~

c,

, , Earnings

Common Avada,ble for;

g' t33.479

' ', %Q  ; ' T 9 ! 30.789 r 22 442 '/1i27

. ~J s: .990 (332.405L .-. 22.4451.?,37.138f,.;,' 32337, .

Weighted verageA, Stock.+. C,ommo_n., , d . w.z, . . . .. . .

aro

. . 15 %. . '. t ./'48.128 f 7; ? 9, 9,5 . . , ', y. .,g...,-< , , n O.

Common Equivalent Shares ! 7 48.128 V48.128 48.128' " 37.194 f." 48.128 . % 48.I'8 ~ 43128 9

/ . !? . $031? .. , ;

- Earnings FN Common'and

- Commo'n Equivalent Share . / _

. ? i) .P: 3.S,l

50'49' v $0,72 - $0.66 # $0.61 > - $;8.931 - 50.781 50 72' Effective Jun'e 30.1986.,the Company recorded a reserve for*the non'-re'coverf of it's inve'itments in Seabro6k Unit 2 and

~

Pdgrim Unit 2. Frdm the Company's perspectde. the event Was uriusu'ai and was not expec@d to re6ccur. theiefore th'e loss was classified as extraordinary. In February of 1987 the SEC informed the Company that the accounting st .tf of the SEC.in view of the accounung and economic enbron'mentIikwhich the Company l@erates, did hoIagree that the wnte.ods were : '

both unusual and infrequently occurring Th4 loss has accordingly been reclas'sd:ed as an isnusual(tem and the presentation

~

of carning's pet share has been r'evised. l

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. Ten Year y yl 1,1,p . Selectid Financial Data .

Comparative Sumrnary -/ [;tThousands;exc'eptWr Share .

. ,. . 1

'. m ,. ,;L ~.';3.<r '.. , . * , ..i Q > S Arnourits'and Ratids) '

l1986 . I1985 ' 1984 '.

"1983 ..1982 1976

- N .

$ .'505,190 -$ 519.740,5 52538515j463.484 5 423,290 $ .196.674 Y? hla 'K217,64 b247,809 '258316 M 2349715 4 224.830 I-/'91.349

,-Y ygp . tn ,y [.S

, t/y,p$J$[;':OpMatingIddme f.7  ;'Gg. r/f:y- 'EPu -SMOperating'Revendes dWF

• ..G}-T[ y

• j ;3., , .. . f.[8724'4? .. Qp.'68.150 My/ f S3 M,783.469 8882 - [(31953 /81173

> 4

. h y.

' " . :* ?. ',,?;f W.j UTotal'Ah1DChr;)io.n of

'..p, 9 .~.d!4.mMe, *.fi",~lCE,S,n;D.T.y,n m. 5 e, . ; , ..llV,e .1 W

" cit y s .?n n.e M..,;"L

? . Nuclear Projects

r. - -

.n n.a;r ::

v ;a4A348320 3 ..;w.pe :.y a . .u c..

3 a; r ".

, M;?.ANy!;.,oss

.. . Net Irico6&d%/. o'iC.anc.e,llat 9 9y M(198365iS154,742 +V156,60'04.ng x..

151.658 s c:.n.pml iM1,623 420S95

.,,y y,. '- 7 D:'Averag'e Common and CoIntnon*'A WN..U:.h .4 'A :.V .E.% Of;F'UWh'dWM . ' ~

U;'.~ 'g , t.V,.J ' Ec[uiv.s. lent Sh_a . . .,. .25

?.lM.Vm. C.3.7,194_,N, #4,8128.. N.. M,37. ,r.S.26' M,34. ,026. M 3,,58D, , p":.

- ~

~4 _s

- Farnings Wr,,Com,EeW J'M.

mon and Cor,nmon "c b.

• j c n, +

g A.,  ;. ,. _ .. A,1 . . - g,. m u % .. . ~

,- m s. . Equivalent Sh' ire (Average) ?? '

$6 i$2.50 7 $3.07 y. :0.$2.73 ,ti$233, l

, ~' ?, :1 M **r*a

• • ;;. 'l:p K.M V Dividends'hrShire 41(* ' .lNM

                                                                                                                                                                                                                                           ~

4'jQ. i l.:, ' .44) "b lCe .l53.49 l M W:.":,@c }'E,50.53j:::.ld ~$2.12., O. J W jt l .< O p: b $2.12 " .i

                                                                                                              *M ~n'.}.'                } .'-Net Utility         Common.St.o'cki Plant in Service -                                                  " Q* i@;
                                                                                                                                                                                                                                                                         , *'.628254 ] '1496,208    .
                                                                                                                                                                                                                                                                                                                                    '464.731 % 7438.644                                       9404.758                      m358.923    i l . )$1.86 -         1
                                                                              -- .                                       c                                                                                                                                                                                                                                                                                                                                     l
                                                                       . ;; , j                                   ';%,M Jotal                Unfinished           Ass'   e ts M                                Constructionf.1.-

ff .' 32,707,844 32662384% M'1 bl,874.289 2.565283 v1989.164 Q.085.783 M1,615.523 ti,691A551,1,398.134 ::1,

                                      ;.                            i;"                                          C '..u V . ,41.on'g. Term' De.syb,t ; .. , .t. .. .                                                                                                  1.372.585 3 089.S22, , l 999.60.1.- ;,-726.777 4. . 637,808 . 217.298 1                                                                                                                                                        ,
                                                                                                                                                                                                                                                                                       -e
                                                                                                                                                                                                                                                                                                             ,s, ,.
                                           ~'                                                                                                                                                                                                                                                                                                        w a d.-.                                                                                                                                 . .s,                                                                               ,

a.. .3..

• Preferred Stock.datorynRedemptio. m.. .,,M .'. . 1., .* ,1' % . . . ,u

                                                                                       ,7                 M                                           F W"ith Man ... .                                                                                                     .
                                                                                                                                                                                                                                                                                                                                     <~                                  .
                              ,                      e                                              %mI'. 2 a                                           .,          Requirements .).. J .* ;4 Q80.389 6 272.840 * ,272.840
                                                                                                                                                             'Without Mandatory Redemp; tion'" 7N *. . . , . ..F

• 2 272.840 c g l78.920y12,000 .

                                                                                                                                   -                                                                                                                                                                                                                          o                  .             .
                                                       '                                                                                                                                                                            "                                                                                                                                                                                        , J55.012
                                ;,                     - ,                                                          .T h -                             R Req 0irernents ..                                                             9 "' d ;;' i ., 763.867.:l;1.069,772 i,48.701 L.48.701                                                     g,1 It8,713 .u. /. .48.983 'lp49229 s
                                      ,, ,                                                              ,W " ' Common,StockEq'uity                                                                                                                                                                                         .'.' 915.127.9 ' 764,368 . ;535,625E ;.162.942                 .
                                        .;;+                                                                                            NTotalCapitalization g                                                                       , i ,L        l , ..2.542,802                         0 2A67355 Y 3228,661 b,l,811.408 'i1 A65,102 - L'4' 47,252
                                                                           .                       .. N.                    -
                                                                                                                                                                                                                                                                    ^ ;
                                                                                                                                                                                                                                                                                                                                                                                                 ~
                                                                                                                                                                                                                                                                                        "2       % NC .'145485 'i.'O.. ' *.!
                                                                                                                                                                                                    ~
                                                                                                                                                                                                                                                   /                                                                                                                                                            .      E,     .
                                                                                            ><.' .4                                            . Not.es.   *#'g i

• Pavable  ?',O

                                                                                                                                                                                                                        ,*[ i. , J ' s ~-* ~.i. -
                                                                                                                                                                                            . O t,.         a   s ,                                                                                   . . -                        - -                                                                                       .-                   -#
                                                                                            ~.,--                                                                                                                              ,

N, . h. 7.4 .'. ', !* .'f '. ' ' . . . .Nr '- # r

                                                                                                                            ' - : Operating' Statistics a N ' ' i . M.

W .W .. . t

• 7Cus'tomer'DatalAverage) . . .

V E *1,N D . 1 .* y .. M T . .d $ ). N M , O . -! 4 P. 4 2342,414 y ' 322,656.c . 309.464. n 298,078Me'291,612 ? .261.346

                       ;             .,                   4                                         '4' E Ef, .TotalCustomeis : ':SDVH IVr Residerit'ialCds.tomery'd                                                                                                                                                                         7.067 < 6.944 '@,119                     ., f 6.946d.                     .' - '6,989  7279
                                                                        +

3 . ;.; . ' V..,  :. .' Cents Ibr,K.Wt-I.Resi. den.'tia.l

                                                                                                                                                                                                                                          . . . . . w ,.is N . 8'.85 - 7.6 9.24W;;  9.78.'                                                          - 9.13 , ' 2 8.60 '                                              44.601
                                                                               'a                                                                                                        a                                                                       ,
                                                                                                                                   ~
                                                                                                                                              ~ Prime Sales (Thousands of M%HC 3 . ~ .. C ~ ' M ' ,
                                                                                                                                                                                                                                                                                                                                               . .J i' :           *3
                                                                                                                                                                                                                                                                                                                                                                                                 '              ~
                                                                                                                                                                                                                                                                                                          . 1978-
                                                                                                                                                                                                                                                                                                                                          ',1917.5 ' ~ 1.819 '
                                                                                        .- d ..
                                                                                  .3 . T .a'.      ,
                                                                                                                                                           -l Residential.T. , # A. /.1
                                                                                                                                                    , *MIndustrial ;, U.e J,
                                                                                                                                                                                                                                                               .  ' .O. 2,135

• 1.818 1.781 1.762 , .1.539 1.677 F ^12.399A . 2.425 ; 4 2.322 y c ' 2.169 ' 2.060 .1.698

                                                                                                                                            -, sCommerc,ialand1W Other j/f^ , ' j, 2.099 Q. 2.046'4.914
                                                                                                                                                                                                                                                                       @ 6.633 ;;, t6.449 . H6.159 '

y ;<1.920, , i

                                                                                                                                         * "Gerier.       ..

ating Capabilit

                                                                                                                                                                                             . , Total P. rime ' Sales
                                                                                                                                                                                       . . - n.                   ., ..
                                                                                                                                                                                                                                                                       +% ,.:. '.^ :'.. 3s                      -f ., , m, f,'s 3 n.. ,' M
                                                                                                                                                                                                                                                                                                                                                                               .                                     v.

i

                                                                                            , . gl , i.                            e           J.G. . Coal . N.. b. .;v<n                                                         .

y--MW % w ;WMJ, J622 ! ..H. i,622 / 1465'..?. ?465' . F. 458,C..i.L456

                                                                                                                                                                                                                                                                                                                                                                                                                .760                    c.754,
                                                                                                               .: . .cs G B Hydro l4,s i.tp JOil.Q.7/p:0                                                                                                    h 595.69f's.D                     e.d 595'y~, . .f y749                                         $ .. ,. :743 't .                        ,

60 ;

                                                                                                                                                                                                                                                                                                                                                   .65

• O - 48 .

y' ,.3 .,2d , ' / Mucleaf .,

                                                                                                                                                                                                                    'M                            .p@g      @.W W,t' W,@9,MMM((13'lQ;l98                     % 69..

t

                                                                                                                                                                                                                                                                                                                                                                       . ' 98 M; M '. . ) 9 p ; ; Peak Load 2 Net WV/WMc +'. d @f.l 375,9 .9.1,320 J g; 1202 191220 ; ...".]1.176 ?. :'"'1.11T l
                              .:                         :*N         -

LiU

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                                                                                                                                                                                                                                                                                                   -u
                                                                                                                      ?.c  2 ares                 of         the         Company's.com.                        mon                  . 4MW           %                            w       n;          .
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                                                           .- 'icePresident.
           ,.?&p!%y.)_f:i-)No' 344,.

r thern Railroad  ;

                                                                                                           ' '% t.:p;s Behr$tearns         ;Treasurer                         SkridefDjpa

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                                         , M'; lRobertJ. Harrison.5513dC fY
                                                        '~    Piesidentand,ChiefExciutikOJ)1ce'r%lted'CYddIniM0nf."3EIN[                     Vice Preadent% .':YQ 3

Oat.Qsytant Vice Pres: li l15)

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                                                                                                                  . D DNcw Hadipsbirh)Yarihi DjvisionF&'fg Robert G. O
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       ,1}7               3(q, ', fQ.                                .; john C.Duffett Execittive.VicePresident                              arid  ' YWhii$T.Er    59(33)                                      t0U2                                                                                                                  f.

Chief O cra. t.ing>Of

Charles E. Bayless.ficer '

                                                                                                                           '   s,kicePre'sid,enfh.d.Qj-@&Y.Qmpt'rft!cr:jQ w                     .w                w              rn   f:Cl                                                                                                          :%                         'J2 QWarren,A.Harv.e:pt-                                                                          60(39)j            #CT'fdf7Am....h.                                     *[1 <~ Russell A 3" . a. ~*?                                                                                                                                                                                                                                   -         -
                                                                                           . 44 (6)
                                                                                                                                                                                                                                                                                     .v.5 132v ,.'
                                                           ' Finaricial Vice President                                                                                         ! y L'3 && h.W Kathlyne M:Hadley,33(10)1 V  '
               'E                                      ,      D. Pierre G. Cameron,Jr.,52(6i ' I 'yicePrisident                            :i RaihS'J61$s~on t          .                                   !.M 18    ?. i h Mh[A   .

S3 5tafit f Treasu,rcr;

        -                                                   . Vice President and General Counsel,T, Vice Pr,isid.en.t.;.$, . , . ...                              -
                                                                                                                                                                                                 . - . -                                                  ~ M.?. O 6 QO. Kay Jones. 31(8.

• John P. Edwards,44.(1)

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4. WeMie11 P.' Johnson". 64 (3)"l . ..a .4 . i . ASS:Stant Secretary .

Vice Presidentfor hblic Affairs . Dennis D. RaceQ8.(5)

                                                                                                                                -[ ddmEsi?Sdvins,'52i18i.6'6;3JYice Presidenty .

William B. Derrickson,46 (3) ' J .' ~~-

                                                                                                                                                                                                                           .W Senior Vice President-
                                                                                                                             ~ M VicWPrdideWMN h. .                                                                                               Paul E. Ramsey.'33 (11)n
                                                                                                                                                                                             ^
                                                ,            Nuclear Energy gob ~eXhja}k[Ali18)l;;QQf fAssistant Comptrol! cry ; '.

Roy G. Barbour,59(23)

                                                                                                                                          ' VicePreiidditM&.w &                                                                                   Bruc~e W. )Viggett,40 (l'2)
                     ..                                     .Vice Presihnt George Branscombe,39 (7)
                                                                                                                                        @e5&&n&4ib)Qy%g.yssista.nitComptroller                                                                                                                                              ..     ;. .

lVice President and Treasur'cr t ^ " W;VidePresident4NacludrProduction:;;%r.. E ;i ' . '~ ,

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                                                                                                                                ' Assista..nt to thin. Y:.I0il.7)lEl0x.E...                                                                                                                                                                                 .

e President;y -

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                                                                                                                                                                                                                                                                         .-                               .. , . -                     2 Divisional                                       Edward A. Brown.57(2) 7                                                                       ,3. ;,                                                               s.,             g               : - 3;                                    m

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ny Ymkce Division '

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