Amended June 2004 U9C3

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549-1004





FORM U-9C-3/A

Amendment No. 1




QUARTERLY REPORT PURSUANT TO RULE 58



For the quarterly period ended June 30, 2004




[updatedamendedjune2004002.gif]



Northeast Utilities

(Name of registered holding company)






107 Selden Street, Berlin, CT 06037

(Address of Principal Executive Officers)






Name and telephone number of officer to whom inquiries concerning this report should be directed:


John P. Stack, Vice President-Accounting and Controller

Telephone Number:  860-665-2333





FORM U-9C-3/A EXPLANATORY NOTE



Amendment No. 1 to our quarterly report on Form U-9C-3 (Form U-9C-3/A) was filed to amend the quarterly report on Form U-9C-3 for the quarter ended June 30, 2004 of Northeast Utilities (NU), which was originally filed on August 25, 2004 (Original Form U-9C-3).  Accordingly, this Form U-9C-3/A contains the complete text of Items 4 and 6, as amended.  Unaffected items in the Original Form U-9C-3 have not been repeated in this Form U-9C-3/A.


Subsequent to the filing of the Form U-9C-3 for the quarter ended June 30, 2004, NU concluded that it incorrectly applied accrual accounting for certain natural gas contracts established by Select Energy, Inc. (Select Energy) to mitigate the risk of electricity purchased in anticipation of winning certain levels of wholesale electric load in New England.  The natural gas basis contracts were originally accounted for on the accrual basis.  The natural gas futures and swaps contracts were accounted for as cash flow hedges with changes in fair value reflected in other comprehensive income (a component of shareholders' equity).  However, subsequent to the filing of the second quarter Form U-9C-3, NU concluded that applying accrual accounting for the basis contracts was incorrect.  The basis contracts should have been recorded at current fair value with changes in fair value impacting earnings.  The fair value, which was a negative $0.9 million, has now been reflected in derivative liabilities and as an increase to purchased power, net interchange power and capacity expenses.  The futures and swaps contracts should not have been accounted for as cash flow hedges and should also have been recorded at fair value.  The fair value, which was a positive $2.7 million and was previously reflected in other comprehensive income (a component of shareholders' equity), has now been reflected as a reduction of purchased power, net interchange power and capacity expenses.  This Form U-9C-3/A reflects the change from accrual and hedge accounting to fair value accounting for the aforementioned natural gas derivative contracts. The net income impact of both of these restatements on both the second quarter and the six months ended June 30, 2004 was a positive $1.1 million.


The natural gas contracts discussed above are accounted for at fair value with changes in fair value included in earnings.  NU concluded that fair value or mark-to-market accounting should have been applied.  To correct this error, NU and Select Energy restated their consolidated balance sheets as of June 30, 2004 and their consolidated statements of income/operations for the three and six months ended June 30, 2004.  


This amendment does not otherwise reflect events occurring after the filing of the Original Form U-9C-3, which was filed on August 25, 2004.  Such events include, among others, the events described in NU's current reports on Form 8-K filed after the filing of the Original Form U-9C-3.  NU filed an amended report on Form 10-Q/A related to these issues on March 17, 2005.




GENERAL INSTRUCTIONS


A.

Use of Form


1.

A reporting company, as defined herein, shall file a report on this form within 60 days after the end of each of the first three quarters, and within 90 days after the end of the fourth quarter, of the fiscal year of the registered holding company.  The period beginning on the date of effectiveness of rule 58 and ending at the end of the quarter following the quarter in which the rule becomes effective shall constitute the initial period for which any report shall be filed, if applicable.


2.

The requirement to provide specific information by means of this form supersedes any requirement by order of the Commission to provide identical information by means of periodic certificates under rule 24; but does not so supersede and replace any requirement by order to provide information by means of an annual report on Form U-13-60.


3.

Information with respect to reporting companies that is required by Form U-13-60 shall be provided exclusively on that form.


4.

Notwithstanding the specific requirements of this form, this Commission may informally request such further information as, in its opinion, may be necessary or appropriate.


B.

Statements of Monetary Amounts and Deficits


1.

Amounts included in this form and in related financial statements may be expressed in whole dollars, thousands of dollars or hundred thousands of dollars.


2.

Deficits and other similar entries shall be indicated by either brackets or parentheses. An explanation should be provided by footnote.


C.

Formal Requirements


This form, including exhibits, shall be filed with Commission electronically pursuant to Regulation S-T (17 CFR 232.10 et seq.).  A conformed copy of each such report shall be filed with each state commission having jurisdiction over the retail rates of a public utility company that is an associate company of a reporting company.  Each report shall provide the name and telephone number of the person to whom inquiries concerning this report should be directed.


D.

Definitions


As used in this form, the word "reporting company" means an energy- related company or gas-related company, as defined in rule 58(b).  All other words and terms have the same meaning as in the Public Utility Holding Company Act of 1935, as amended, and the rules and regulations there under.






ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT

    
 

Investments in energy-related companies:

    
 

(Thousands of Dollars)

 
 

(Restated)

   

Total consolidated capitalization as of

06/30/04

$6,684,324 

 

line 1

Total capitalization multiplied by 15%

    

 (line 1 multiplied by 0.15)

 

1,002,649 

  
     

Additional investment allowed through 6/30/07 *

 

500,000 

  
    

line 2

Total Allowed

  

$1,502,649 

line 3

     

Total current aggregate investment:

    

   Select Energy, Inc. and Subsidiary (Restated)

 

805,817 

  

   Northeast Generation Services Company

 

22,231 

  

   Select Energy Contracting, Inc.

 

15,285 

  

   Woods Electrical Co., Inc.

 

17,320 

  

   Reeds Ferry Supply Co., Inc.

 

  

   HEC/Tobyhanna Energy Project, Inc.

 

  

   Yankee Energy Services Company

 

7,882 

  

   E.S. Boulos Company

 

9,435 

  

   R.M. Services, Inc.

 

  - 

  

   NGS Mechanical, Inc.

 

10 

  

   Acumentrics Corporation

 

3,750 

  

   Greenport, LLC

 

501 

  

   ERI/HEC EFA-Med, LLC

 

  

HEC/CJTS Energy Center LLC

 

12

  

   Current aggregate investment

  

882,259 

 

     Elimination **

  

12,539 

 

          Total current aggregate investment

  

869,720 

line 4

Difference between the total allowed and the total

    

current aggregate investment of the

    

registered holding company system (line 3 less line 4)

  

$632,929 

line 5

 

 *Per SEC Order dated July 2, 2004 (Rel. No. 35-27868A).

 

**Elimination is for capital contributions made from a parent company, who is a reporting company to a subsidiary who is also a reporting

company.  




ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS


Instructions


A.

Financial Statements


1.

Financial statements are required for reporting companies in which the registered holding company system has at least 50% equity or other ownership interest. For all other rule 58 companies, the registered holding company shall make available to the Commission such financial statements as are available to it.


2.

For each reporting company, provide a balance sheet as of the end of the quarter and income statements for the three-month and year- to-date periods ending as of the end of the quarter, together with any notes thereto. Financial statements shall be for the first three quarters of the fiscal year of the registered holding company.


3.

If a reporting company and each of its subsidiaries engage exclusively in single category of energy-related or gas-related activity, consolidated financial statements may be filed.


4.

Separate financial statements need not be filed for inactive companies or for companies engaged solely in the ownership of interests in energy-related or gas-related companies.


B.

Exhibits


1.

Copies of contracts required to be provided by Item 3 shall be filed as exhibits.


2.

A certificate stating that a copy of the report for the previous quarter has been filed with interested state commissions shall be filed as an exhibit.  The certificate shall provide the names and addresses of the state commissions.



A.

Financial Statements


Select Energy, Inc. and Subsidiary (Restated):

 Consolidated Balance Sheet - As of June 30, 2004

 Consolidated Statements of Operations - Three and six months ended June 30, 2004


Northeast Generation Services Company*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


Select Energy Contracting, Inc.*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


Reeds Ferry Supply Co., Inc.*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


HEC/Tobyhanna Energy Project, Inc.*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


Yankee Energy Services Company*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004




ERI/HEC EFA-Med, LLC*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


E. S. Boulos Company*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


NGS Mechanical, Inc.*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


HEC/CJTS Energy Center LLC*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


Woods Electrical Co., Inc.*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


Greenport Power, LLC*:

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


Acumentrics Corporation:

 Not available


R. M. Services, Inc.:

 Inactive as of June 30, 2004


Northeast Utilities (Parent) (Restated):

 Balance Sheet - As of June 30, 2004

 Statements of Income - Three and six months ended June 30, 2004


B.

Exhibits*


Exhibit No.

Description


6.B.1.1

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b.


6.B.1.2

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.3a

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.3b

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.3c

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.3d

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.3e

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.3f

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.4a

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).





6.B.1.4b

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.4c

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.5a

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.5b

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.6a

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.6b

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.6c

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.1.2.1

Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b).


6.B.2.1

The company certifies that a conformed copy of Form U-9C-3 for the previous quarter was filed with the following state commissions:


Ms. Louise E. Rickard

Acting Executive Secretary

Department of Public Utility Control

10 Franklin Square

New Britain, CT 06051


Ms. Mary L. Cottrell, Secretary

Massachusetts Department of Telecommunications and Energy

100 Cambridge Street

Boston, MA 02202


Mr. Thomas B. Getz

Executive Director and Secretary

State of New Hampshire

Public Utilities Commission

8 Old Suncook Road, Building One

Concord, NH 03301-7319


* Previously filed with original report on Form U-9C-3.  





SELECT ENERGY, INC. AND SUBSIDIARY

  
   

CONSOLIDATED BALANCE SHEET

  

(Unaudited)

  
   
   
  

 

  

June 30,

  

2004
(Restated)

  

(Thousands

  

of Dollars)

ASSETS

  
   

Current Assets:

  

  Cash

 

$                    7,877 

  Unrestricted cash from counterparties

 

104,976 

  Special deposits

 

35,420 

  Receivables, net

 

363,738 

  Accounts receivable from affiliated companies

 

112,811 

  Unbilled revenues

 

27,170 

  Notes receivable from affiliated companies

 

65,300 

  Taxes receivable

 

16,919 

  Derivative assets

 

202,978 

  Prepaid option premiums

 

23,492 

  Prepayments and other

 

26,326 

  

987,007 

   

Property, Plant and Equipment:

  

  Competitive energy

 

20,446 

     Less: Accumulated depreciation

 

12,157 

  

8,289 

  Construction work in progress

 

1,354 

  

9,643 

   

Deferred Debits and Other Assets:

  

  Goodwill

 

3,200 

  Purchased intangible assets, net

 

12,623 

  Long-term accounts receivable

 

5,939 

  Long-term contracts asset

 

36,429 

  Other

 

130 

  

58,321 

   
   
   

Total Assets

 

$             1,054,971 

   

Note:

In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made.  


See accompanying notes to financial statements.






SELECT ENERGY, INC. AND SUBSIDIARY

  
   

CONSOLIDATED BALANCE SHEET

  

(Unaudited)

  
   
   
   
  

 June 30,

  

2004
(Restated)

  

(Thousands

  

 of Dollars)

LIABILITIES AND CAPITALIZATION

  
   

Current Liabilities:

  

  Accounts payable

 

$                      511,769 

  Accounts payable to affiliated companies

 

19,848 

  Derivative liabilities

 

99,032 

  Unearned option premiums

 

11,061 

  Counterparty deposits

 

104,976 

  Other

 

39,244 

  

785,930 

   

Deferred Credits and Other Liabilities:

  

  Accumulated deferred income taxes

 

46,185 

  Other

 

8,918 

  

55,103 

   

Capitalization:

  

  Long-Term Debt from NU Parent

 

150,000 

   

  Common Stockholder's Equity:

  

    Common stock, $1 par value – authorized

  

      20,000 shares; 100 shares outstanding

 

    Capital surplus, paid in

 

286,190 

    Accumulated deficit

 

(266,871)

    Accumulated other comprehensive income

 

44,619 

  Common Stockholder's Equity

 

63,938 

Total Capitalization

 

213,938 

   
   

Total Liabilities and Capitalization

 

 $                  1,054,971 

   

Note:

In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made.  


See accompanying notes to financial statements.






SELECT ENERGY, INC. AND SUBSIDIARY

    
     

CONSOLIDATED STATEMENTS OF OPERATIONS

    

(Unaudited)

    
  

Three Months

 

Six Months

  

Ended

 

Ended

  

 June
2004
(Restated)

 

June
2004
(Restated)

  

(Thousands of Dollars)

     

Operating Revenues

  

$                550,360 

 

$             1,284,532 

     

Operating Expenses:

  

   

  Operation -

    

    Purchased power, net interchange power

    

     and capacity

 

529,376 

 

1,222,161 

    Other

 

24,536 

 

43,249 

  Depreciation and amortization

 

1,934 

 

3,704 

  Taxes other than income taxes

  

2,565 

 

5,785 

        Total operating expenses

  

558,411 

 

1,274,899 

Operating (Loss)/Income

  

(8,051)

 

9,633 

Interest Expense, Net

 

2,422 

 

5,210 

Other Loss, Net

 

(160)

 

(176)

(Loss)/Income Before Income Tax (Benefit)/Expense

  

(10,633)

 

4,247 

Income Tax (Benefit)/Expense

  

(4,039)

 

1,732 

Net (Loss)/Income

  

 $                  (6,594)

 

$                  2,515 

     
     

Note:

In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the periods shown have been made.  


See accompanying notes to financial statements.






NORTHEAST UTILITIES (PARENT)

  
   

BALANCE SHEET

  

(Unaudited)

  
   
   
  

June 30,

  

2004

  

(Restated)

  

(Thousands

  

 of Dollars)

ASSETS

  
   

Current Assets:

  

  Cash

 

$                           841 

  Notes receivable from affiliated companies

 

161,400 

  Notes and accounts receivable

 

1,485 

  Accounts receivable from affiliated companies

 

2,446 

  Taxes receivable

 

32,239 

  Prepayments

 

674 

 

 

199,085 

Deferred Debits and Other Assets:

  

  Investments in subsidiary companies, at equity

 

2,626,502 

  Other

 

14,756 

  

2,641,258 

   
   
   
   

Total Assets

 

  $               2,840,343 

   

Note:

In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made.  


See accompanying notes to financial statements.






NORTHEAST UTILITIES (PARENT)

  
   

BALANCE SHEET

  

(Unaudited)

  
   
  

June 30,

  

2004
(Restated)

  

(Thousands

  

 of Dollars)

LIABILITIES AND CAPITALIZATION

  
   

Current Liabilities:

 

 

  Long-term debt - current portion

 

 $                      25,000 

  Accounts payable

 

156 

  Accounts payable to affiliated companies

 

5,884 

  Accrued interest

 

5,776 

  Derivative liabilities

 

10,339 

  Other

 

21,612 

 

 

68,767 

 

 

 

Deferred Credits and Other Liabilities:

  

  Accumulated deferred income taxes

 

3,699 

  Other

 

1,558 

 

 

5,257 

 

 

 

Capitalization:

 

 

  Long-Term Debt

 

443,387 

 

 

 

  Common Shareholders' Equity:

 

 

    Common stock, $5 par value – authorized

 

 

      225,000,000 shares; 150,578,806 shares issued and

 

 

      128,098,320 shares outstanding

 

752,894 

    Capital surplus, paid in

 

1,110,135 

    Deferred contribution plan - employee stock

 

 

      ownership plan

 

(67,274)

    Retained earnings

 

841,191 

    Accumulated other comprehensive income

 

45,010 

    Treasury stock

 

 (359,024)

  Common Shareholders' Equity

 

2,322,932 

Total Capitalization

 

2,766,319 

   

Total Liabilities and Capitalization

 

 $                 2,840,343 

  

 

Note:

In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made.  


See accompanying notes to financial statements.






NORTHEAST UTILITIES (PARENT)

    
     

STATEMENTS OF INCOME

    

(Unaudited)

    
     
  

 

 

 

  

Three Months

 

Six Months

  

Ended

 

Ended

  

June 30,

 

June 30,

  

2004
(Restated)

 

2004
(Restated)

  

(Thousands of Dollars)

     
     

Operating Revenues

  

$                           - 

 

 $                           - 

     

Operating Expenses:

  

   

  Other

  

2,363 

 

4,968 

Operating Loss

  

(2,363)

 

(4,968)

     

Interest Expense

 

                     6,337 

 

11,861 

     

Other Income, Net:

  

   

  Equity in earnings of subsidiaries

  

27.193 

 

96,969 

  Other

  

3,603 

 

7,853 

         Other income, net

 

30,796 

 

104,822 

Income Before Income Tax Benefit

 

22,096 

 

87,993 

Income Tax Benefit

  

(1,896)

 

                     (3,441)

Net Income

  

$                  23,992 

 

 $               91,434 

     

Note:

In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the periods shown have been made.  


See accompanying notes to financial statements.





Northeast Utilities (Parent)
Select Energy, Inc.
Select Energy New York, Inc.


Notes to Financial Statements (Unaudited)


With regard to restated notes to financial statements, reference is made to the restated information which was included in NU's second quarter 2004 Form 10-Q/A filing which was filed with the Securities and Exchange Commission on March 17, 2005.  




QUARTERLY REPORT OF NORTHEAST UTILITIES


SIGNATURE CLAUSE



Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued there under, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized.  


NORTHEAST UTILITIES

(Registered Holding Company)



/s/ John P. Stack

     (Signature of Signing Officer)

     John P. Stack

     Vice President - Accounting and Controller

     Date:  November 28, 2005