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National Grid USA Service Co Inc – ‘U-13-60’ for 3/31/05

On:  Wednesday, 8/31/05, at 2:08pm ET   ·   Effective:  8/31/05   ·   For:  3/31/05   ·   Accession #:  71297-5-37   ·   File #:  49-00012

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/31/05  National Grid USA Service Co Inc  U-13-60     3/31/05    1:519K                                   National Grid USA

Annual Report of a Mutual or Subsidiary Service Company   —   Form U-13-60
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: U-13-60     P/E 3-31-05                                         HTML    386K 


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  FORM U-13-60  

FORM U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980


ANNUAL REPORT


For the Period

Beginning April 1, 2004 and Ending March 31, 2005


To The

U.S. SECURITIES AND EXCHANGE COMMISSION

Of

NATIONAL GRID USA SERVICE COMPANY, INC.

A Subsidiary Service Company


Date of Incorporation: September 5, 1935


State or Sovereign Power under which Incorporated or Organized:

The Commonwealth of Massachusetts


Location of Principal Executive Offices of Reporting Company:

25 Research Drive
Westborough, MA 01582


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

Marcy L. Reed
Senior Vice President Finance and Controller
25 Research Drive
Westborough, MA 01582


Name of Principal Holding Company Whose Subsidiaries are served by
Reporting Company:

National Grid USA


SEC 1926 (6-82)




Page 2
INSTRUCTIONS FOR USE OF FORM U-13-60


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

2. Number of Copies Each annual report shall be filed in duplicate. The company should prepare and retain at least one extra copy for itself in case correspondence with reference to the report become necessary.

3. Period Covered by Report The first report filed by any company shall cover the period from the date the Uniform System of Accounts was required to be made effective as to that company under Rules 82 and 93 to the end of that fiscal year. Subsequent reports should cover a calendar year.

4. Report Format Reports shall be submitted on the forms prepared by the Commission. If the space provided on any sheet of such form is inadequate, additional sheets may be inserted of the same size as a sheet of the form or folded to such size.

5. Money Amounts Displayed All money amounts required to be shown in financial statements may be expressed in whole dollars, in thousands of dollars or in hundred thousands of dollars, as appropriate and subject to provisions of Regulation S-X (Section 210.3-01(b)).

6. Deficits Displayed Deficits and other like entries shall be indicated by the use of either brackets or a parenthesis with corresponding reference in footnotes. (Regulation S-X, Section 210.3-01(c))

7. Major Amendments or Corrections Any company desiring to amend or correct a major omission or error in a report after it has been filed with the Commission shall submit an amended report including only those pages, schedules, and entries that are to be amended or corrected. A cover letter shall be submitted requesting the Commission to incorporate the amended report changes and shall be signed by a duly authorized officer of the company.

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

9. Organization Chart The service company shall submit with each annual report a copy of its current organization chart.

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

11. Annual Statement of Compensation for Use of Capital Billed The service company shall submit with each annual report a copy of the annual statement supplied to each associate company in support of the amount of compensation for use of capital billed during the calendar year.




Page 3

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC

LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS

Description of Schedules and Accounts
Schedule or Account No.
Page Number
COMPARATIVE BALANCE SHEET
Schedule I
4-5

Service company property
Schedule II
6-7

Accumulated provision for depreciation and amortization of service company property
Schedule III
8

Investments
Schedule IV
9

Accounts receivable from associate companies
Schedule V
10

Fuel stock expenses undistributed
Schedule VI
11

Stores expense undistributed
Schedule VII
12

Miscellaneous current and accrued assets
Schedule VIII
13

Miscellaneous deferred debits
Schedule IX
14

Research, development, or demonstration expenditures
Schedule X
15

Proprietary capital
Schedule XI
16

Long-term debt
Schedule XII
17

Current and accrued liabilities
Schedule XIII
18

Notes to financial statements
Schedule XIV
19

COMPARATIVE INCOME STATEMENT
Schedule XV
20

Analysis of billing - associate companies
Account 457
21

Analysis of billing - nonassociate companies
Account 458
22

Analysis of charges for service - associate and nonassociate companies
Schedule XVI
23

Schedule of expense by department or service function
Schedule XVII
24-26

Departmental analysis of salaries
Account 920
27

Outside services employed
Account 923
28-31

Employee pensions and benefits
Account 926
32

General advertising expenses
Account 930.1
33

Miscellaneous general expenses
Account 930.2
34

Rents
Account 931
35

Taxes other than income taxes
Account 408
36

Donations
Account 426.1
37-38

Other deductions
Account 426.5
39

Notes to statement of income
Schedule XVIII
40


LISTING OF INSTRUCTIONAL FILING REQUIREMENTS


Description of Reports or Statements


ORGANIZATION CHART

41
METHODS OF ALLOCATION

42
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
43





Page 4
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)
SCHEDULE I
COMPARATIVE BALANCE SHEET


Account
Assets and Other Debits
Current
3/31/05
Prior
3/31/04

SERVICE COMPANY PROPERTY


101
Service company property
(Schedule II)
$29.3
$9.6
107
Construction work in progress
(Schedule II)




Total Property
$29.3
$9.6
108
Less accumulated provision for depreciation and amortization of service company property
(Schedule III)
(4.8)
(4.8)


Net Service Company Property
24.5
4.8

INVESTMENTS


123
Investments in associate companies
(Schedule IV)


124 & 128
Other Investments (Schedule IV)
145.2
136.8


Total Investments
145.2
136.8

CURRENT AND ACCRUED ASSETS


131
Cash
2.6
-
134
Special deposits
1.4
1.4
135
Working funds
.1
.1
136
Temporary cash investments (Schedule IV)


141
Notes receivable from associate companies
(Money Pool)
14.0
.4
143
Accounts receivable
-
-
144
Accumulated provision for uncollectible accounts


146
Accounts receivable from associate companies
(Schedule V)
155.4
144.4
152
Fuel stock expenses undistributed (Schedule VI)


154
Materials and supplies


163
Stores expense undistributed (Schedule VII)


165
Prepayments
7.7
10.6
174
Miscellaneous current and accrued assets
(Schedule VIII)
17.5



Total Current and Accrued Assets
198.6
156.9

DEFERRED DEBITS


181
Unamortized debt expense


184
Clearing accounts


186
Miscellaneous deferred debits (Schedule IX)
105.8
123.6
188
Research, development, or demonstration expenditures (Schedule X)


190
Accumulated deferred income taxes
149.9
73.8


Total Deferred Debits
255.8
197.4


TOTAL ASSETS AND OTHER DEBITS
$624.1
$496.0





Page 5
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE I
COMPARATIVE BALANCE SHEET

Account
Liabilities and Proprietary Capital
Current
3/31/05
Prior
3/31/04

PROPRIETARY CAPITAL


201
Common stock issued (Schedule XI)


211
Miscellaneous paid-in-capital
(Schedule XI)
$ 10.7
$ 10.7
215
Appropriated retained earnings (Schedule XI)


216
Unappropriated retained earnings (Schedule XI)
3.6
3.6


Total Proprietary Capital
14.3
14.3

LONG-TERM DEBT


223
Advances from associate companies (Schedule XII


224
Other long-term debt (Schedule XII)


225
Unamortized premium on long-term debt


226
Unamortized discount on long-term debt- debit
_____
_____


Total Long-Term Debt
_____
_____

CURRENT AND ACCRUED LIABILITIES


231
Notes payable


232
Accounts payable
51.7
43.3
233
Notes payable to associate companies
(Schedule XIII)


234
Accounts payable to associate companies
(Schedule XIII)
33.7
4.0
236
Taxes accrued
9.0
13.5
237
Interest accrued


238
Dividends declared


241
Tax collections payable
3.2

242
Miscellaneous current and accrued liabilities
(Schedule XIII)
26.6
25.3


Total Current and Accrued Liabilities
124.2
86.1

DEFERRED CREDITS


253
Other deferred credits
414.6
395.6
255
Accumulated deferred investment tax credits




Total Deferred Credits
414.6
395.6
282
ACCUMULATED DEFERRED INCOME TAXES
70.9
-


TOTAL LIABILITIES AND PROPRIETARY CAPITAL
$624.1
$496.0





Page 6

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE II
SERVICE COMPANY PROPERTY




DESCRIPTION


BALANCE AT 3/31/04



ADDITIONS


RETIREMENTS OR SALES

OTHER (1) CHANGES
BALANCE AT CLOSE OF YEAR 3/31/05

Account





301
Organization





303
Miscellaneous Intangible Plant
$0.1



$0.1
304
Land and Land Rights





305
Structures and Improvements





306
Leasehold Improvements





307
Equipment (2)





308
Office Furniture and Equipment
9.5


19.7
29.2







309
Automobiles, Other Vehicles and Related Garage Equipment





310
Aircraft and Airport Equipment





311
Other Service Company Property (3)
____


____
____

SUB-TOTAL
$9.6


$19.7
$29.3
107
Construction Work in Progress (4)
____



____

TOTAL
$9.6


$19.7
$29.3





Page 7


ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE II - CONTINUED

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


(2) Subaccounts are required for each class of equipment owned. The service company shall provide a listing by subaccount of equipment additions during the year and the balance at the close of the year:

SUBACCOUNT DESCRIPTION
BALANCE
3/31/04
ADDITIONS
OTHER
CHANGES

BALANCE AT CLOSE OF YEAR
3/31/05
Capitalized lease for Computer Information Systems
$4.3

$19.7
(A)
$24.0
TOTAL
$4.3

$19.7

$24.0
General Plant





Communication Software
.5



.5
Communication Equipment
4.8



4.8
TOTAL
5.3



5.3
TOTAL
$9.6

$19.7

$29.3


(A) Write-off of Walker project plus addition of Peoplesoft ERP project

(3) DESCRIBE OTHER SERVICE COMPANY PROPERTY:

None


(4) DESCRIBE CONSTRUCTION WORK IN PROGRESS:

None




Page 8

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY





DESCRIPTION




BALANCE AT 3/31/04

ADDITIONS CHARGED TO ACCT 403




RETIREMENTS
OTHER CHANGES AND (DEDUCT) (1)

BALANCE AT CLOSE OF YEAR 3/31/05
Account





301
Organization





303
Miscellaneous Intangible Plant





304
Land and Land Rights





305
Structures and Improvements





306
Leasehold Improvements





307
Equipment





308
Office Furniture and Equipment
$(4.8)



$(4.8)
309
Automobiles, Other Vehicles and Related Garage Equipment





310
Aircraft and Airport Equipment





311
Other Service Company Property






TOTAL
$(4.8)



$(4.8)


1) PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:




Page 9

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)
SCHEDULE IV
INVESTMENTS
INSTRUCTIONS: Complete the following schedule concerning investments.

Under Account 124 "Other Investments," state each investment separately, with description, including, the name of issuing company, number of shares or principal amount, etc.

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




DESCRIPTION



BALANCE AT 3/31/04
BALANCE AT CLOSE OF YEAR 3/31/05
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES
None
None

TOTAL
None
None
ACCOUNT 124 & 128 - OTHER INVESTMENTS



Supplemental Retirement/Deferred



Compensation Plan Trust Fund
$85.4
$88.2

General American Life Insurance Company -



Net Cash Surrender Value
12.6
14.4

Confederation Life Insurance Company -



Net Cash Surrender Value
2.7
2.9

Aurora National Life Assurance Company -



Net Cash Surrender Value
6.8
7.4

Metropolitan Life Insurance Company -



Net Cash Surrender Value
6.5
7.5

Pacific Mutual Life Insurance Company -



Deferred Compensation - Life Insurance



Investments & Net Cash Surrender Value
(1.5)
(3.2)

Security Life of Denver



Net Cash Surrender Value
5.9
9.0

Guardian Life Insurance Company



Net Cash Surrender Value
2.5
.8

Allmerica Financial Life Insurance Company



Net Cash Surrender Value
4.4
4.5

New York Life Insurance Company



Net Cash Surrender Value
4.1
4.7

CRG Life Insurance Company



Net Cash Surrender Value
2.6
2.9

AEGON Life Insurance Company



Net Cash Surrender Value
4.8
6.1

TOTAL
$136.8
$145.2
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS



See Note A, Schedule XIV



TOTAL







Page 10

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE V
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES


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




DESCRIPTION



BALANCE AT 3/31/04
BALANCE AT CLOSE OF YEAR 3/31/05
ACCOUNT 146 -ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES


National Grid USA (Trust)
$1.1
$4.6

Nantucket Electric Company
(.2)
1.5

Massachusetts Electric Company
55.2
64.1

New England Hydro-Trans. Electric Co., Inc.
0.1
0.1

New Hampshire Hydro-Trans. Corp.
0.2
0.1

New England Power Company
33.9
35.6

New England Electric Transmission
-
0.1

Yankee Atomic Electric Company
0.1
0.1

Granite State Electric Company
2.3
2.2

The Narragansett Electric Company
33.8
26.9

Grid UK Billing
-
6.1

NEES Communications, Inc
0.1
-

GRID Communications, Inc
0.3
-

GridCom Cons
-
0.1

Niagara Mohawk Power Corp.
16.5
13.2

Grid America Holdings
0.3
0.3

Grid America LLC
0.8
0.4

National Grid Transco - Other Affiliates
(0.1)
-

TOTAL
$144.4
$155.4



ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
TOTAL PAYMENTS

National Grid USA (Trust)
$7.3
$0.3

Nantucket Electric Company
0.8
2.5

Massachusetts Electric Company
28.5
58.8

New England Hydro-Trans. Electric Co., Inc.
0.3
0.1

New England Hydro Finance
-
0.1

New England Power Company
18.9
37.6

New England Electric Transmission Corporation
0.1
-

Niagara Mohawk Power Corp
117.7
37.1

Granite State Electric Company
0.6
2.0

The Narragansett Electric Company
2.3
23.9

NEES Communications, Inc.
0.3
-

NEES Communications Billing
0.2
-

Grid America Holdings
2.4
-

GridAmerica LLC
-
0.2

National Grid Transco - Other Affiliates
2.6
0.3

TOTAL PAYMENTS
$182.0
$162.9





Page 11

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE VI
FUEL STOCK EXPENSES UNDISTRIBUTED



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

DESCRIPTION

LABOR
EXPENSES
TOTAL
ACCOUNT 152 - FUEL STOCK EXPENSES UNDISTRIBUTED
None
None
None

TOTAL
None
None
None








SUMMARY:




Page 12

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE VII
STORES EXPENSE UNDISTRIBUTED



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

DESCRIPTION

LABOR
EXPENSES
TOTAL
ACCOUNT 163 - STORES EXPENSE UNDISTRIBUTED
None
None
None

TOTAL
None
None
None





Page 13

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands of Dollars)

SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS



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




DESCRIPTION



BALANCE AT 3/31/04
BALANCE AT CLOSE OF YEAR 3/31/05
ACCOUNT 174 - MISCELLANEOUS CURRENT AND ACCRUED ASSETS



Unbilled computer information systems costs
-
$17,092

Unbilled fiber optic project
-
547

Building and grounds improvements
-
239

Unbilled costs to unrelated parties
-
104





MISCELLANEOUS (42 ITEMS)



Items Under $10,000
-
(462)

TOTAL
None
$17,520





Page 14



ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands)

SCHEDULE IX
MISCELLANEOUS DEFERRED DEBITS



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





DESCRIPTION



BALANCE AT 3/31/04
BALANCE AT CLOSE OF YEAR 3/31/05
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS


Unbilled Computer Information Systems Costs
$30,312
$9,208

Unbilled Shared Microwave System Expenses
1,936
1,683

Other
44
300

Prepaid Pension Costs
91,333
94,642

TOTAL
$123,625
$105,833





Page 15
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE X
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES



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


DESCRIPTION

AMOUNT
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION EXPENDITURES
None

TOTAL
None





Page 16

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(Expressed in Millions, Rounded to Hundred Thousands of Dollars,
Except Per Share Data)

SCHEDULE XI
PROPRIETARY CAPITAL




ACCOUNT NUMBER




CLASS OF STOCK


NUMBER OF SHARES AUTHORIZED
PAR OR STATED VALUE PER SHARE



OUTSTANDING CLOSE OF PERIOD




NO. OF SHARES
TOTAL AMOUNT
201
COMMON STOCK ISSUED
4,000
$25
3
$75



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

DESCRIPTION

AMOUNT
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL


Capital contributions from National Grid USA, the holding company (SEC File No. 70-9673):
$5.0

Adjustments relating to acquisition by National Grid Group and merger of EUA Service Company
5.7
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS
None

TOTAL
$10.7



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




DESCRIPTION


BALANCE AT 3/31/04

NET INCOME OR (LOSS)

DIVIDENDS PAID
BALANCE AT CLOSE OF YEAR 3/31/05
ACCOUNT 216 - UNAPPROPRIATED RETAINED EARNINGS
Retained earnings
$.5
$.5
($.5)
$.5
Other Comprehensive income (B)
3.1


3.1

TOTAL
$3.6
$.5
($.5)
$3.6


(A) Refer to page 41 for detail to allowed rate of return.

(B) Represents unrealized appreciation on marketable securities. Generally Accepted Accounting Principles require such amounts be recorded in the Proprietary Capital without being included in reported net income. Since the SEC chart of accounts does not provide for such a common equity account, these amounts have been reflected in retained earnings.




Page 17
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE XII
LONG-TERM DEBT

INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and advances on open account. Names of associate companies from which advances were received shall be shown under the class and series of obligation column. For Account 224 - Other long-term debt provide the name of creditor company or organization, terms of the obligation, date of maturity, interest rate, and the amount authorized and outstanding.





NAME OF CREDITOR


TERMS OF OBLIG CLASS & SERIES OF OBLIGATION


DATE OF MATURITY


INTEREST RATE


AMOUNT AUTHORIZED

BALANCE AT 3/31/04



ADDITIONS


DEDUCTIONS (1)
BALANCE AT CLOSE OF YEAR 3/31/05
ACCOUNT 223 - ADVANCES FROM ASSOCIATE COMPANIES:




None
None

None
None
ACCOUNT 224 - OTHER LONG-TERM DEBT:



None
None

None
None




None
None

None
None


(1) Give an explanation of deductions:

None




Page 18

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands)

SCHEDULE XIII
CURRENT AND ACCRUED LIABILITIES

INSTRUCTIONS: Provide balance of notes and accounts payable to each associate company. Give description and amount of miscellaneous current and accrued liabilities. Items less than $10,000 may be grouped, showing the number of items in each group.




DESCRIPTION



BALANCE AT 3/31/04
BALANCE AT CLOSE OF YEAR 3/31/05
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES See Note A, Schedule XIV



TOTAL


ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES



National Grid USA (Trust)
$ 2,459
$ 10,080

Nantucket Electric Company
3
188

Massachusetts Electric Company
900
10,286

New England Hydro - MA
-
92

New Hampshire Hydro
-
15

New England Power Company
(2)
3,330

New England Electric Trans
-
17

Granite State Electric Company
2
108

The Narragansett Electric Company
170
1,209

Wayfinder
-
7

Grid UK Billing
-
2,548

GridCom Cons
(116)
109

Grid America Hold
-
5

GridAmerica LLC
-
59

Niagara Mohawk Power Corp.
564
5,643

TOTAL
$3,980
$33,696
ACCOUNT 242 -MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES



NGUSA Goals
$ 4,042
$ 7,163

Property Under Capital Lease
3,770
6,408

Healthcare Costs & Accrued Compensation
1,291
1,641

Accrued Payroll and Vacation Costs
15,630
11,176

Other Accounts Payable
533
199

TOTAL
$25,266
$26,587









Page 19
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005

SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS

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

Note A
During 1981, certain subsidiaries of New England Electric System established a money pool to more effectively utilize cash resources of subsidiaries and to reduce outside short-term borrowings. The SEC authorized the establishment of the money pool in Release No. 35-21987. In 2002, the terms were amended in Release No. 35-27490 to permit Niagara Mohawk Power Corp. to invest in and borrow from the money pool.

Short-term borrowing needs of subsidiaries are met first with available funds of other participants in the pool. Borrowing companies pay interest at a rate designed to approximate the cost of outside short-term borrowings. Companies who invest in the pool share the interest earned on a basis proportionate to their average monthly investment in the money pool. Funds may be withdrawn from or repaid to the pool at any time without prior notice.

National Grid USA Service Company, Inc. was designated to administer the pool as agent for the member companies. The Company has classified pool transactions of the member companies on a net basis in the current and prior year balance sheets.

At March 31, 2005 the detail of this pool was as follows (in thousands):

Investments in the Pool:


National Grid USA (Trust)
$ 380,425


Nantucket
700


New England Power Company
307,325


Granite State Electric Company
9,875


EUA Energy Investments
21,325


National Grid USA Service Company
13,950
$ 733,600




Borrowings from the Pool:



Massachusetts Electric Company
$ 291,300


MA New England Hydro-Trans. Electric Co., Inc.
875


NH New England Hydro-Trans. Electric Co., Inc.
1,325


New England Electric Trans. Corp
1,900


Niagara Mohawk Power Corporation
400,500


Narragansett Electric Company
37,700
$ 733,600





Page 20


ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE XV
STATEMENT OF INCOME




ACCOUNT



DESCRIPTION
CURRENT YEAR
3/31/05

PRIOR
YEAR
3/31/04

INCOME


457
Services rendered to associate companies
$400.8
$442.2
458
Services rendered to non-associate companies
-
-
421
Miscellaneous income or loss



TOTAL INCOME
$400.8
$442.2

EXPENSE


920
Salaries and wages
$167.6
$ 158.9
921
Office supplies and expenses
74.1
96.7
922
Administrative expense transferred - credit
-
-
923
Outside services employed
70.0
45.2
924
Property insurance
2.9
1.1
925
Injuries and damages
8.6
8.0
926
Employee pensions and benefits
50.9
97.7
928
Regulatory commission expense
-
-
930.1
General advertising expenses
-
-
930.2
Miscellaneous general expenses
2.1
1.6
931
Rents
16.6
16.2
932
Maintenance of structures and equipment

-
403
Depreciation and amortization expense

-
408
Taxes other than income taxes
12.2
11.7
409
Income taxes
(4.6)
16.6
410
Provision for deferred income taxes
(2.8)

411
Provision for deferred income taxes - credit
1.2
(14.0)
411.5
Investment tax credit


419
Interest income


426.1
Donations
.6
.9
426.5
Other deductions


427
Interest on long-term debt


430
Interest on debt to associate companies
-
(.1)
431
Other interest expense
.9
1.2

TOTAL EXPENSE
$400.3
$441.7

NET INCOME OR (LOSS)
$ .5
$ .5





Page 21


ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

ANALYSIS OF BILLING

ASSOCIATE COMPANIES
ACCOUNT 457


NAME OF ASSOCIATE COMPANY
DIRECT COSTS CHARGED 457-1
INDIRECT COSTS CHARGED 457-2
COMPENSATION FOR USE OF CAPITAL 457-3
TOTAL AMOUNT BILLED





National Grid USA
$ 7.6
$ 0.0
($0.1)
$ 7.5
Nantucket Electric Company
2.1
-
-
2.1
Massachusetts Electric Company
138.0
2.7
(1.6)
139.1
New England Hydro-Transmission Electric Co., Inc.
3.9
0.1
-
4.0
New England Hydro-Transmission Corp.
1.4
-
-
1.4
New England Power Company
50.2
1.4
(0.8)
50.8
New England Electric Transmission Corp.
0.8
-
-
0.8
Niagara Mohawk Power Corp
126.7
1.8
(1.2)
127.3
Granite State Electric Company
5.0
0.1
-
5.1
The Narragansett Electric Company
51.5
1.0
(0.6)
51.9
Wayfinder Group, Inc.
0.1
-
-
0.1
National Grid UK
2.6
0.1
-
2.7
GridCom Consol
3.9
0.1
-
4.0
Grid America Holdings
2.0
-
-
2.0
Grid America LLC
2.0
-
-
2.0







TOTAL
$397.8
$7.3
$(4.3)
$400.8





Page 22


ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

ANALYSIS OF BILLING
NON ASSOCIATE COMPANIES
ACCOUNT 458

NAME OF NONASSOCIATE COMPANY
DIRECT COST CHARGED 458-1
INDIRECT COST CHARGED
458-2
COMPENSATION FOR USE OF CAPITAL 458-3
TOTAL COST
EXCESS OR DEFICIENCY 458-4
TOTAL AMOUNT BILLED

Other
$0.0


$0.0

$0.0








TOTAL
$ 0.0


$ 0.0

$ 0.0



INSTRUCTION: Provide a brief description of the services rendered to each non-associated company:






Page 23
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)
SCHEDULE XVI

ANALYSIS OF CHARGES FOR SERVICE ASSOCIATE AND NONASSOCIATE COMPANIES


ASSOCIATE COMPANY CHARGES
NONASSOCIATE COMPANY CHARGES
TOTAL CHARGES FOR SERVICE


Direct Cost
Indirect Cost
Total
Direct Cost
Indirect Cost
Total
Direct Cost
Indirect Cost
Total

920
Salaries and Wages
$166.4
$1.2
$167.6
$0.0
$0.0
$0.0
$166.4
$1.2
$167.6
921
Office Supplies and Expenses
72.9
1.2
74.1
0.0
0.0
0.0
72.9
1.2
74.1
922
Administrative Expense transferred credit
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
923
Outside Services Rendered
69.9
0.1
70.0
0.0
0.0
0.0
69.9
0.1
70.0
924
Property Insurance
2.9
0.0
2.9
0.0
0.0
0.0
2.9
0.0
2.9
925
Injuries and Damages
8.6
0.0
8.6
0.0
0.0
0.0
8.6
0.0
8.6
926
Employee Pensions and Benefits
44.9
6.0
50.9
0.0
0.0
0.0
44.9
6.0
50.9
928
Regulatory Commission Expense
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
930.1
General Advertising Expense
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
930.2
Miscellaneous General Expense
2.1
0.0
2.1
0.0
0.0
0.0
2.1
0.0
2.1
931
Rents
16.2
0.4
16.6
0.0
0.0
0.0
16.2
0.4
16.6
932
Maintenance of Structures and Equipment
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
403
Depreciation & Amortization Expense
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
408
Taxes Other Than Income Taxes
11.1
1.1
12.2
0.0
0.0
0.0
11.1
1.1
12.2
409
Income Taxes
(5.6)
1.0
(4.6)
0.0
0.0
0.0
(5.6)
1.0
(4.6)
410
Provisions for Deferred Income Taxes
(2.8)
0.0
(2.8)
0.0
0.0
0.0
(2.8)
0.0
(2.8)
411
Provisions for Deferred Income Taxes-Credit
2.1
(0.9)
1.2
0.0
0.0
0.0
2.1
(0.9)
1.2
411.5
Investment Tax Credit
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
419
Interest Income
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
426.1
Donations
0.6
0.0
0.6
0.0
0.0
0.0
0.6
0.0
0.6
426.5
Other Donations
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
427
Interest on Long-Term Debt
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
431
Other Interest Expense
1.1
(0.2)
0.9
0.0
0.0
0.0
1.1
(0.2)
0.9

TOTAL EXPENSES
$390.4
$9.9
$400.3
0.0
$0.0
0.0
$390.4
$9.9
$400.3

Compensation for use of Equity Capital


0.5


0.0


0.5

430
Interest on Debt to Associate Companies


0.0


0.0


0.0

TOTAL COST OF SERVICE


$400.8


$0.0



$400.8











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




Page 24

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY DEPARTMENT OR SERVICE FUNCTION

 
 
 
 
 
 
 
 
 
 
 
 
DESCRIPTION OF ITEMS
TOTAL AMOUNT
OVERHEAD
01
02
03
04
05
06
07

920
Salaries and wages
$167.6

$4.5
$11.0
$17.3
$6.9
$10.4
$3.6
$26.4
921
Office supplies and expenses
$74.1

$4.2
$8.3
$4.6
$1.5
$1.3
$1.2
$29.3
922
Administrative expense transferred-credit
$0.0








923
Outside services employed
$70.0

$8.5
$3.5
$9.3
$1.4
$2.6
$1.6
$11.6
924
Property insurance
$2.9








925
Injuries and damages
$8.6

$0.9




$2.2

926
Employee pensions and benefits
$50.9






$50.8

928
Regulatory commission expense
$0.0








930.1
General advertising expenses
$0.0








930.2
Miscellaneous general expense
$2.1

$0.2






931
Rents
$16.6

$0.6
$0.2
$0.6


$1.3
$2.6
932
Maintenance of structures and equipment









403
Depreciation and amortization expense









408
Taxes other than income taxes
$12.2
$0.7
$10.2
$0.1
$0.1
$0.1
$0.1
$0.1
$0.2
409
Income taxes
($4.6)
($6.0)







410
Provision for deferred income taxes
($2.8)
($2.9)







411
Provision for deferred income taxes- credit
$1.2
$2.1







411.5
Investment tax credit









419
Interest income









426.1
Donations
$0.6

$0.3




$0.1
$0.1
426.5
Other deductions









427
Interest on long term debt









430
Interest on debt to associate companies









431
Other interest expense
$0.9
$0.4
$0.4




($0.2)
$0.1

 
TOTAL EXPENSES
$400.3
$(5.7)
$29.8
$23.1
$31.9
$9.9
$14.4
$60.7
$70.3












INSTRUCTION:      Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System: Uniform System of Accounts)




Page 25

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE XVII - CONTINUED

 
 
 
 
 
 
 
 
 
 
 
 
 
DESCRIPTION OF ITEMS
08
09
10
11
12
13
14
15
16
17

920
Salaries and wages
$3.3
$1.3
$21.0
$3.1
$21.8
$1.1
$10.9
$6.9
$1.2
$1.6
921
Office supplies and expenses
$2.4
$0.1
$2.2
$1.1
$2.9
$0.1
$10.9
$0.7
$0.9

922
Administrative expense transferred-credit










923
Outside services employed
$1.4
$0.2
$7.0
$3.0
$2.5
$0.2
$5.3
$7.2
$0.1

924
Property insurance



$2.9






925
Injuries and damages



$5.4






926
Employee pensions and benefits


$0.1







928
Regulatory commission expense










930.1
General advertising expenses










930.2
Miscellaneous general expense

$0.8


$0.2

$0.9



931
Rents


$0.1
$0.1
$4.3

$1.2
$0.1


932
Maintenance of structures and equipment










403
Depreciation and amortization expense










408
Taxes other than income taxes


$0.1

$0.1

$0.1
$0.1


409
Income taxes




$1.4





410
Provision for deferred income taxes




$0.1





411
Provision for deferred income taxes- credit




($0.9)





411.5
Investment tax credit










419
Interest income










426.1
Donations








$0.1

426.5
Other deductions










427
Interest on long term debt










430
Interest on debt to associate companies










431
Other interest expense




$0.2






 
TOTAL EXPENSES
$7.1
$2.4
$30.5
$15.6
$32.6
$1.4
$29.3
$15.0
$2.3
$1.6

















Page 26


ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

SCHEDULE XVII - CONTINUED

 
 
 
 
 
 

 
DESCRIPTION OF ITEMS
18
19
20
21
22

920
Salaries and wages
$6.9
$2.7
$2.1
$3.1
$0.5
921
Office supplies and expenses
$0.2
$0.1
$0.8
$1.0
$0.3
922
Administrative expense transferred-credit





923
Outside services employed
$0.2
$0.1
$0.1
$3.6
$0.6
924
Property insurance





925
Injuries and damages


$0.1


926
Employee pensions and benefits





928
Regulatory commission expense





930.1
General advertising expenses





930.2
Miscellaneous general expense





931
Rents



$5.5

932
Maintenance of structures and equipment





403
Depreciation and amortization expense





408
Taxes other than income taxes




$0.1
409
Income taxes





410
Provision for deferred income taxes





411
Provision for deferred income taxes- credit





411.5
Investment tax credit





419
Interest income





426.1
Donations





426.5
Other deductions





427
Interest on long term debt





430
Interest on debt to associate companies





431
Other interest expense






 
TOTAL EXPENSES
$7.3
$2.9
$3.1
$13.2
$1.5












Page 27

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920


Total
Parent
Other
Non-Associates
Employees






Management
$ 4.5
$ 0.5
$ 4.0
$ -
9
Customer Service
$ 11.0
$ -
$ 11.0
$ -
225
Engineering
$ 17.3
$ -
$ 17.3
$ -
228
Supply Chain Management
$ 6.9
$ -
$ 6.9
$ -
97
Transmission
$ 10.4
$ -
$ 10.4
$ -
114
Human Resources
$ 3.6
$ (0.4)
$ 4.0
$ -
46
Information Services
$ 26.5
$ -
$ 26.5
$ -
374
Retail Services
$ 3.3
$ -
$ 3.3
$ -
39
Environmental
$ 1.3
$ -
$ 1.3
$ -
21
Construction/Electrical
$ 21.0
$ -
$ 21.0
$ -
278
Treasury/Financial Forecasting
$ 3.1
$ 0.1
$ 3.0
$ -
44
Corporate Accounting/Tax
$ 21.7
$ 2.9
$ 18.8
$ -
84
Internal Audit
$ 1.1
$ -
$ 1.1
$ -
17
Retail Operations
$ 10.9
$ -
$ 10.9
$ -
132
Corporate Legal
$ 6.9
$ 0.1
$ 6.8
$ -
80
Corporate Communications
$ 1.2
$ -
$ 1.2
$ -
16
GRID Communications
$ 1.6
$ -
$ 1.6
$ -
14
Dispatching
$ 6.9
$ -
$ 6.9
$ -
94
Distribution Finance
$ 2.7
$ -
$ 2.7
$ -
34
Safety
$ 2.1
$ -
$ 2.1
$ -
29
Property Management
$ 3.1
$ -
$ 3.1
$ -
48
Business Development
$ 0.5
$ 0.3
$ 0.2
$ -
2







$ 167.6
$ 3.5
$ 164.1
$ -
2025











Page 28

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions)

OUTSIDE SERVICES EMPLOYED
ACCOUNT 923

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

FROM WHOM PURCHASED
TYPE OF SERVICE
RELATIONSHIP
"A"- ASSOCIATE
"NA"- NON ASSOCIATE
AMOUNT

LEGAL SERVICES



BOWDITCH AND DEWEY, LLP
Legal Services
NA
$ 0.2
SALLY & FITCH
Legal Services
NA
0.1
SWIDLER BERLIN SHEREFF FRIEDMAN LLP
Legal Services
NA
2.1
Forty Vendors (Each Under $100,000)


1.1

TOTAL LEGAL SERVICES

$ 3.5

ENGINEERING SERVICES



NATIONAL GRID TRANSCO PLC
Engineering Services
A
0.3
ABB INCORPORATED
Engineering Services
NA
0.1
Eleven Vendors (Each Under $100,000)


0.2

TOTAL ENGINEERING SERVICES

$ 0.6




MANAGEMENT CONSULTING SERVICES


HEWITT ASSOCIATES LLC
Management Consultants
NA
$ 0.1
MARSH FINANCIAL SERVICES
Management Consultants
NA
0.2
ONCOR UTILITY SOLUTIONS
Management Consultants
NA
0.3
Thirteen Vendors (Each Under $100,000)


0.3

TOTAL MANAGEMENT CONSULTING SERVICES
$ 0.9




ACCOUNTING SERVICES



PRICEWATERHOUSECOOPERS LLP
Accounting Consultants
NA
$ 1.8
Six Vendors (Each Under $100,000)


0.1

TOTAL ACCOUNTING SERVICES

$ 1.9





Page 29

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(In Millions)
OUTSIDE SERVICES EMPLOYED - CONTINUED
ACCOUNT 923

FROM WHOM PURCHASED
TYPE OF SERVICE
RELATIONSHIP
"A"- ASSOCIATE
"NA"- NON ASSOCIATE
AMOUNT

OTHER SERVICES



ACCENTURE LLP
Consultant Services
NA
$ 7.4
ACTION INC
Contractor Services
NA
0.2
AIMNET SOLUTIONS
Contractor Services
NA
0.2
AJILON CONSULTING
Contractor Services
NA
1.6
ASPLUNDH TREE EXPERT CO
Contractor Services
NA
0.5
BANK ONE
Contractor Services
NA
0.1
BUSINESS & TECHNOLOGY RESOURCE GROUP INC
Contractor Services
NA
0.3
CEDAR ENTERPRISE SOLUTIONS INC
Contractor Services
NA
0.4
CGI INFORMATION SYSTEMS & MANAGEMENT
Contractor Services
NA
1.1
CHARLES L VINCENT INC
Contractor Services
NA
0.1
CLARK AND MOTT CONSTRUCTION INC
Contractor Services
NA
0.3
CONSERVATION SERVICES GROUP INC
Contractor Services
NA
0.2
CORPORATE GROWTH RESOURCES INC
Contractor Services
NA
0.4
D FOLEY LANDSCAPING INCORPORATED
Contractor Services
NA
0.4
DELLAS GRAPHICS
Contractor Services
NA
0.1
EDI SPECIALISTS INC
Contractor Services
NA
0.1
ELIASSEN GROUP INC
Information Systems Professional Services
NA
0.2
ENVIRONMENTAL CONSULTANTS INC
Contractor Services
NA
0.2
F W MADIGAN COMPANY INC
Contractor Services
NA
0.2
FACT BASED MANAGEMENT INC
Contractor Services
NA
1.4
GMS SAPPHIRE TECHNOLOGIES
Contractor Services
NA
0.3
GRATTAN LINE CONSTRUCTION CORPORATION
Contractor Services
NA
0.1
HALPIN LINE CONSTRUCTION LLC
Engineering Services
NA
1.6
IBM CORPORATION
Information Systems Professional Services
NA
1.6
INTACT TECHNOLOGY
Consultant Services
NA
0.1
INTERNATIONAL PROGRAMMING & SYSTEMS INC
Contractor Services
NA
0.3





Page 30

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(In Millions)
OUTSIDE SERVICES EMPLOYED - CONTINUED
ACCOUNT 923

FROM WHOM PURCHASED
TYPE OF SERVICE
RELATIONSHIP
"A"- ASSOCIATE
"NA"- NON ASSOCIATE
AMOUNT

JBI HELICOPTER SERVICES
Contractor Services
NA
0.1
JF2 LLC
Contractor Services
NA
0.2
JOHN LUCAS TREE EXPERT COMPANY
Contractor Services
NA
0.1
JUDGE TECHNICAL SERVICES INC
Contractor Services
NA
0.2
KBH CONSTRUCTION CO INC
Contractor Services
NA
0.9
KEANE INC
Contractor Services
NA
0.2
KEMA CONSULTING
Contractor Services
NA
0.3
KEMA INC
Consultant Services
NA
0.1
KFORCE.COM
Human Resources Management Services
NA
1.1
LANGUAGE LINE LLC
Contractor Services
NA
0.3
LEWIS TREE SERVICE
Contractor Services
NA
0.7
LINC MECHANICAL LLC
Contractor Services
NA
0.2
LOMA CONSULTING
Contractor Services
NA
0.2
MANHATTAN ASSOCIATES
Consultant Services
NA
0.3
MASSACHUSETTS ELECTRIC COMPANY
Contractor Services
A
0.2
MAXIMA CONSULTING INC
Contractor Services
NA
0.4
MILLENNIUM INTERNATIONAL TECHNOLOGIES
Contractor Services
NA
1.3
MRO SOFTWARE INC
Consultant Services
NA
0.5
NCO FINANCIAL SYSTEMS INC
Contractor Services
NA
0.4
OFFICE ENVIRONMENTS
Contractor Services
NA
0.1
OSMOSE UTILITIES SERVICES INC
Contractor Services
NA
1.1
PAGE ELECTRICAL SERVICE
Contractor Services
NA
0.2
PAR ELECTRICAL CONTRACTORS INC
Contractor Services
NA
0.3
PEOPLESOFT INC
Consultant Services
NA
0.2
PITNEY BOWES INC
Contractor Services
NA
0.3
PITNEY BOWES MANAGEMENT SERVICES
Contractor Services
NA
0.9
POWER PLAN CONSULTANTS INC
Consultant Services
NA
0.1
PREMIER UTILITY LOCATING LLC
Contractor Services
NA
0.2
PROFESSIONALS INC
Contractor Services
NA
0.5
PUBLIC UTILITIES MAINTENANCE INC
Contractor Services
NA
0.5
R G VANDERWEIL ENGINEERS INC
Consultant Services
NA
1.0
RELIANCE SYSTEMS INC
Consultant Services
NA
0.8





Page 31

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005
(In Millions)
OUTSIDE SERVICES EMPLOYED - CONTINUED
ACCOUNT 923

FROM WHOM PURCHASED
TYPE OF SERVICE
RELATIONSHIP
"A"- ASSOCIATE
"NA"- NON ASSOCIATE
AMOUNT

ROBERT HALF MANAGEMENT RESOURCES
Contractor Services
NA
0.1
ROBSON WOESE INC
Contractor Services
NA
0.1
SECURITAS SECURITY SYSTEMS USA INC.
Contractor Services
NA
0.5
SOURCEONE SOLUTIONS INC
Contractor Services
NA
0.2
SUBURBAN CONTRACT CLEANING
Contractor Services
NA
0.4
SUBURBAN STAFFING INC
Human Resources Management Services
NA
1.5
SULLIVAN AND COGLIANO DESIGNERS INC
Information Systems Professional Services
NA
0.4
SYSTEMS AND MANAGEMENT CONSULTANTS INC
Information Systems Professional Services
NA
1.1
T ROWE PRICE TRUST CO
Human Resources Management Services
NA
0.4
TAC WORLDWIDE COMPANIES
Contractor Services
NA
0.2
THIRO USA INC
Contractor Services
NA
0.2
THREE PHASE LINE CONSTRUCTION
Contractor Services
NA
0.4
TOMPKINS ASSOCIATES
Consultant Services
NA
0.4
TOWERS PERRIN
Human Resources Management Services
NA
0.4
TRANSCANADA POWER MARKETING LTD
Contractor Services
NA
0.5
TRIAD EMPLOYMENT SERVICES
Human Resources Management Services
NA
1.2
TRIAD ENGINEERING CORP
Contractor Services
NA
0.5
TURNER COMMUNICATIONS
Consultant Services
NA
0.2
VEGETATION CONTROL SERVICES INC
Contractor Services
NA
0.2
WESTERN UNION FINANCIAL SERVICES
Contractor Services
NA
0.3
WHITRIDGE ASSOCIATES INC
Information Systems Professional Services
NA
0.1
WIPRO LTD
Contractor Services
NA
1.3
XEROX CORPORATION
Contractor Services
NA
0.2
ZENSAR TECHNOLOGIES
Contractor Services
NA
0.8
Six hundred and forty-one vendors (each under $100,000)


18.2

TOTAL OTHER SERVICES

$ 63.1

GRAND TOTAL

$ 70.0





Page 32

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands)

EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926


INSTRUCTIONS: Provide a listing of each pension plan and benefit program provided by the service company. Such listing should be limited to $25,000.

DESCRIPTION

AMOUNT
Pensions
$ 13,381
Postretirement Benefits Other than Pensions
15,253
Postemployment Benefits
1,197
Group Insurance Premiums
2,693
Executive Life Insurance
(911)
Medical Insurance Premiums
11,058
Employee Educational Aid
570
Employee Thrift Plan
7,949
Miscellaneous (Each Under $25,000)
(278)





TOTAL
$50,912





Page 33

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands)

GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1



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



DESCRIPTION
NAME OF PAYEE
AMOUNT


None
TOTAL

None








Page 34

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands)

MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2



INSTRUCTIONS: Provide a listing of the amount included in Account 930.2, "Miscellaneous General Expenses", classifying such expenses according to their nature. Payments and expenses permitted by Sections 321(b) (2) of the Federal Election Campaign Act, as amended by Public Law 94-283 in 1976 (2 U.S.C. Section 441 (b) (2)) shall be separately classified.



DESCRIPTION
AMOUNT

Environmental Matters
$919

Meter Data Services
1,086

Miscellaneous
142







TOTAL
$2,147





Page 35
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

RENTS
ACCOUNT 931



INSTRUCTIONS: Provide a listing of the amount included in Account 931, "Rents", classifying such expenses by major groupings of property, as defined in the account definition of the Uniform System of Accounts.

TYPE OF PROPERTY
AMOUNT
Building Rents
$ 2.4
Capital Lease - Computer Information Systems
4.9
Computer Hardware and Software
1.5
Microwave and Tele-metering Equipment
0.4
Transportation Equipment
0.6
Office and Other Equipment
6.8




TOTAL
$16.6







Page 36


ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

TAXES OTHER THAN INCOME TAXES
ACCOUNT 408

INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than Income Taxes". Separate the analysis into two groups: (1) other than U.S. Government taxes, and (2) U.S. Government taxes. Specify each of the various kinds of taxes and show the amounts thereof. Provide a subtotal for each class of tax.


KIND OF TAX
AMOUNT

1)   OTHER THAN U.S. GOVERNMENT TAXES


State Unemployment
$ 0.1

State Excise
0.6

Other State Taxes
0.2

SUBTOTAL
0.9



2)   U.S. GOVERNMENT TAXES


Federal Unemployment
0.2

Federal Insurance Contribution Act - Company
11.1

SUBTOTAL
11.3


TOTAL
$12.2








Page 37

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands)

DONATIONS
ACCOUNT 426.1

INSTRUCTIONS: Provide a listing of the amount included in Account 426.1, "Donations", classifying such expenses by its purpose. The aggregate number and amount of all items of less than $3,000 may be shown in lieu of details.


PURPOSE OF DONATION
AMOUNT

UNITED WAY
Matching Gifts Program
$284
WORCESTER ART MUSEUM
Donation
27
THE NEW ENGLAND COUNCIL
Donation
26
WHY ME INC & SHERRY'S HOUSE
Donation
18
WORCESTER PARKS & RECREATION DEPARTMENT
Donation
18
THE NEW ENGLAND LEGAL FOUNDATION
Donation
16
DOWN SYNDROME AIM HIGH
Donation
13
DOWN SYNDROME ASSOCIATION
Donation
13
AMERICAN GAS ASSOCIATION
Donation
10
THE BARTON CENTER
Donation
10
THE LEUKEMIA & LYMPHOMA SOCIETY OF AMERICA
Matching Gifts Program
8
THE KEYSTONE CENTER
Lobbying
8
WORCESTER POLYTECHNIC INSTITUTE
Matching Gifts Program/Donation
8
CSG/ERC
Donations
7
PAN-MASSACHUSETTS CHALLENGE
Matching Gifts Program
7
RENSSELAER POLYTECHNIC INSTITUTE
Matching Gifts Program/Scholarships
7
UEA
Donations
6
CORNELL UNIVERSITY
Scholarships
6
TREE FUND
Donations
6
AMERICAN RED CROSS
Matching Gifts Program
6
WILLIAMS COLLEGE
Matching Gifts Program/Donations
6
THOMPSON ISLAND OUTWARD BOUND EDUCATION
Donations
5
INITIATIVE FOR A COMPETITIVE INNER CITY
Donations
5
MAXIMUM IMPACT
Donations
5
U.W.U.A OPERATION FAMILY REUNION
Donations
5
SUSAN G. KOMEN BREAST CANCER FOUNDATION
Matching Gifts Program
5
HARVARD UNVERSITY
Matching gifts Program/Scholarships
5
WGBH EDUCATIONAL FOUNDATION
Matching Gifts Program
4
AMERICAN CANCER SOCIETY
Matching Gifts Program
4
THE SALVATION ARMY
Matching Gifts Program
4
BOSTON COLLEGE
Matching Gifts Program
4
BOY SCOUTS OF AMERICA
Matching Gifts Program/Grants
4
SYRACUSE UNIVERSITY
Matching Gifts Program/Scholarships
3
CLARK UNIVERSITY
Matching Gifts Program
3
DANA-FARBER CANCER INSTITUTE
Matching Gifts Program
3
BILLERICA SCHOLARSHIP FOUNDATION
Matching Gifts Program
3
COLBY COLLEGE
Scholarships
3
COLLEGE AT ONEONTA
Scholarships
3





Page 38

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Thousands)

DONATIONS-CONTINUED
ACCOUNT 426.1


PURPOSE OF DONATION
AMOUNT

GREATER BOSTON CHAMBER OF COMMERCE
Donations
3
MANHATTANVILLE COLLEGE
Scholarships
3
REGIONAL ENVIRONMENTAL COUNCIL
Matching Gifts Program
3
SUNY COLLEGE AT GENESCO
Scholarships
3
THE SAGE COLLEGES
Scholarships
3
UNIVERSITY OF CONNECTICUT
Scholarships
3
TUFTS MEDICAL SCHOOL
Scholarships
3
UNION COLLEGE
Scholarships
3
UNIVERSITY AT BUFFALO
Scholarships
3
UNIVERSITY OF RICHMOND
Scholarships
3
MISCELLANEOUS (405 ITEMS)
Each Vendor Under $3,000
Matching Gifts Program, Donations, Grants and Scholarships for educational institutions and other charitable organizations
(50)


$558





Page 39

ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

OTHER DEDUCTIONS
ACCOUNT 426.5



INSTRUCTIONS: Provide a listing of the amount included in Account426.5, "Other Deductions", classifying such expenses according to their nature.

DESCRIPTION
NAME OF PAYEE
AMOUNT


None
TOTAL

None








Page 40
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005

SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME



INSTRUCTIONS: The space below is provided for important notes regarding the statement of income or any account thereof. Furnish particulars as to any significant increase in services rendered or expenses incurred during the year. Notes relating to financial statements shown elsewhere in this report may be indicated here by reference.


No Significant Notes




Page 41
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
ORGANIZATION CHART
For the Year Ended March 31, 2005
Chief Executive Officer & Group Director NGUSA



(01)







!




!
!
!
!
!
!
!
!
President & COO
Sr. VP, CFO & Treasurer
Sr. Vice President
Sr. VP & General Counsel
Vice President
Internal Audit
CEO GRID Communications
COO US Transmission
(01)
(01)
(01)
(15)
(16)
(13)
(17)
(01)
!
!
!
!
!

!
!
Customer Service
Treasury/Financial Forecasting
Human Resources
Corporate Legal
Corporate Communications

GRID Communications
Transmission
(02)
(11)
(06)
(15)
(16)

(17)
(05)
!
!





!
Engineering
Corp. Accounting / Tax





Business Development
(03)
(12)





(22)
!
!






Supply Chain Management
Property Management






(04)
(21)






!







Information Services







(07)







!







Retail Services







(08)







!







Environmental







(09)







!







Construction/ Electrical







(10)







!







Retail Operations







(14)







!







Dispatching







(18)







!







Distribution Finance







(19)







!







Safety







(20)









The numbers that appear with Department are a cross reference to Page 27.




Page 42
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005

METHODS OF ALLOCATION



Inventory, less fuel

Microwave air line circuit miles

Number of employees

Number of customers

Number of meters in service

Transmission and distribution operation and maintenance expenses (excluding transmission of electricity by others), customers' accounts, customer service and information, and sales expenses.

Number of purchase orders

Archive space occupied

Budgeted transmission/distribution operation and maintenance expenditures

Budgeted transmission/distribution capital expenditures

Number of aerial devices

Average of number of purchase orders issued, number of checks processed and inventory balances

Total billings to associated companies for services rendered (excluding convenience payments)

Materials and supplies issues

Transmission operating and maintenance expenses (excluding transmission of electricity by others)




Page 43


ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.

For the Year Ended March 31, 2005
(In Millions, Rounded to Hundred Thousands of Dollars)

ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED

As authorized by Commission's File No. 70-6353 and amendment No. 11 dated August 18, 1995, and Commission's File No. 70-9673 dated January 2, 2001, National Grid USA Service Company, Inc. included in its service charge to customers for the fiscal year April 2003 - March 2004, the amount of $.5 million dollars. The following is a schedule indicating a breakdown of this billing:



Associated Companies
Non-Associated Companies
Total
Total Compensation
$.5
-
$.5
Excess of Revenues Billed Over Costs Incurred to Non-Associated Companies
-
-
-
Compensation for Use of Equity Capital Billed
$.5
$ -
$.5


The Company is authorized by order 70-6353 and amended thereto to use a rate of return on Common Equity of New England Power Company as authorized in FERC proceedings through January 2001, and by order 70-9673, a rate of return on Common Equity of The Narragansett Electric Company beginning February 2001.


Common Equity:


April 2004 - March 2005
$5.0






Amount of Equity Return:


April 2004 - March 2005 @10.50%
$.5





Page 44
ANNUAL REPORT OF NATIONAL GRID USA SERVICE COMPANY, INC.
For the Year Ended March 31, 2005

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.



National Grid USA Service Company, Inc.
------------------------------
(Name of Reporting Company)



By:

                   /s/ Marcy L. Reed                   
(Signature of Signing Officer)




Marcy L. Reed, Senior Vice President Finance and Controller
-------------------------------
(Printed Name and Title of Signing Officer)




(A copy of this letter was sent to all Associate Companies who were billed during the fiscal year ended March 31, 2005 (See Page 21).)
                                                                                             National Grid USA Service Company, Inc.
                                                                                             25 Research Drive
                                                                                             Westborough, MA 01582-0099
                                                                                             Tel.(508) 389-2900


This letter is being sent pursuant to Rule 93 of the Securities and Exchange Commission (SEC) under the Public Utility Holding Company Act (P.U.H.C.A.) of 1935. As authorized by the P.U.H.C.A. of 1935, Release No. 35-21354 dated December 21, 1979, National Grid USA Service Company, Inc. was allowed to include in its billings a charge for compensation for use of equity capital. In Release No. 35-27333 dated January 5, 2001, the Company was authorized by the SEC to produce a return on common equity of 10.50%. These calculations were developed as follows:

(In Millions, Rounded to Hundred Thousands of Dollars)

NGUSASCo Common Equity:


(Excluding Retained Earnings)


April 2004 - March 2005
$5.0



Return on Common Equity:


April 2004 - March 2005 @ 10.50%
$.5




This total compensation for use of equity capital is allocated to each company serviced by National Grid USA Service Company, Inc., based on the percent of direct payroll charged to each company.

To the extent National Grid USA Service Company, Inc. billings to non-associate companies exceed or are less than its costs (including its compensation for use of equity capital), such excess or deficiency is used to adjust the charges for compensation for use of equity capital to our associate companies.

The table below shows the billings in 2005 for compensation for use of equity capital.


Associated Companies
Non-Associated Companies
Total
Total compensation for use of equity capital
$(4.4)
-
$(4.4)
Excess of costs billed over revenues incurred to non-associate companies
-
-
-
Compensation for use of equity capital billed
$(4.4)
$-
$(4.4)


During the fiscal year ended March 31, 2005, (company name) was charged $________ for compensation for use of equity capital by National Grid USA Service Company, Inc.; this amount reflects a proportionate share of the reduction for earnings from billings to non-associates.

Very truly yours,

Marcy L. Reed, Senior Vice President Finance and Controller





Supplement to the Form U-13-60
Service Transactions among the National Grid Transco System Companies
(Excepting National Grid USA companies)
and National Grid USA companies
For the Fiscal Year Ended March 31, 2005



1. A narrative description of the services rendered by individual National Grid Transco System Companies (excepting the National Grid USA companies) to the National Grid USA companies and by the National Grid USA companies to other National Grid Transco System Companies

The following services were rendered in the fiscal year ended March 31, 2005 from National Grid Transco to the National Grid USA system companies

Company Secretary and General Counsel
-------------------------------------------
Services include ensuring stock exchange and SEC compliance and filings, producing the annual reports and Form 20-F, arranging the AGM and any other shareholder meetings, board and other high level meetings, administration of share schemes and ensuring strong corporate governance is in place and complied with.

Strategy
---------------
Services include development of National Grid Transco strategies with Directors, introduction and promotion of National Grid Transco initiatives, monitoring of external strategic thinking, and best practice developments to allow their incorporation into National Grid Transco strategies

Finance
-------------
Services include provision of technical accounting advice (UK and US GAAP), management and statutory financial reporting (UK and US GAAP), business planning, taxation planning and reporting Transco treasury activities.

Human Resources
---------------------------
Services include payroll and HR administration for UK Group employees, together with support and involvement in the Niagara Mohawk integration process, setting remuneration policy for senior management & gaining approvals, provision of expatriate administration services for secondees to and from the US, as well as facilitation of management succession planning & management development initiatives.

Internal Audit
--------------------------
Internal Audit function monitors and maintains internal controls within National Grid Transco.

Investor Relations
---------------------------------
Investor Relations activities include preparation of announcements of financial results, liaison with financial analysts, management of communications with investors and financial institutions to ensure that the financial community is kept fully informed about company strategy and performance.




Board of Directors
---------------------------------
Provide stewardship activities for National Grid Transco

Corporate Affairs/Communications
----------------------------------------------------------
Creation and promotion of the company's corporate image, management of communications with a range of external and internal audiences, stewardship advice of government affairs, development of environmental policy and compliance with environmental audit program.

Regulation
-------------------
Stewardship advice of group regulatory issues

The following services were rendered from National Grid USA Service Company to other National Grid Transco System Companies:


            Treasury Services for National Grid Transco
            Directors' expenses for National Grid Transco board meeting
            Legal Services
            Business Development activities
            Accounting Services


2. Disclosure of the dollar amount of services rendered according to category or department.

Services rendered by National Grid Transco System Companies to National Grid USA by department or category:

Transmission
$2114
Engineering
918
Operations Performance Mgt.
498
Telecommunications
377
Business Development
333
Financial Planning & Analysis
124
Bus. And Energy Efficiency Mgt.
117
Other
2




Total
$4,483


National Grid Transco has continued to provide Group Services (as defined on page 6 of National Grid Transco's "Policies and Procedures for Affiliate Transactions" that was filed with the SEC in Docket 70-9473) to the National Grid USA subsidiaries, however National Grid Transco has determined at this time not to bill for such services for the fiscal year ended March 31, 2005.  National Grid Transco may elect in the future to resume billing the National Grid USA subsidiaries for such services using the methods approved by the SEC's order in Docket 70-9473 dated March 15, 2000 (HCAR 35-27154, Appendix C, Section VI).




Services rendered by National Grid USA to National Grid Transco System Companies by department:

SERVICE
DEPARTMENT
Merger Strategy
Executive Management
Legal
Corporate Communication Services for National Grid Transco
Corporate Communications
Treasury Services for National Grid Transco
Finance
Investor Relations
Accounting Services
Directors' expenses for National Grid Transco board meetings
Executive Management
Legal Services
Legal
Business Development activities
Engineering
Human Resources
Executive Management
Legal



Service Costs by Department



Fin Planning
$740


Legal
666


Accounting
625


Investor Relations
436


Executive
405


Internal Audit
378


Human Resources
245


Transmission
150


Other
77










Total
$3,722






3. Identification of companies rendering services and recipient companies, including disclosure of the allocation of service costs among the companies in the National Grid USA group.

National Grid Transco System Companies rendering services to National Grid USA

            National Grid USA Service Company


The costs were allocated as follows among National Grid USA companies:

National Grid USA
$372
Nantucket Electric Company
2
Massachusetts Electric Company
280
New England Hydro-Transmission Electric Co, Inc.
2
New England Hydro-Transmission Company
5
New England Power Company
314
Granite State Electric Company
5
The Narragansett Electric Company
92
Grid Communications, Inc.
377
Niagara Mohawk Power Corp
1789
GridAmerica LLC
1,245




Total
$4,483



National Grid USA Companies rendering services to other National Grid Transco System Companies:

           National Grid USA Service Company


4. Disclosure of the number of National Grid USA employees engaged in rendering services to other National Grid Transco System Companies on an annual basis, stated as an absolute and as a percentage of total employees.


Number of National Grid USA employees who rendered services during fiscal year 2005

           20 employees
           less than 1% of total employees at March 31, 2005



Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘U-13-60’ Filing    Date    Other Filings
Filed on / Effective on:8/31/05
For Period End:3/31/05
4/1/04
1/5/01
1/2/01
3/15/00
8/18/95POS AMC
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