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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR SECTION
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended March 31, 2003 Commission File No. 1-10922
-------------- -------


BANGOR HYDRO-ELECTRIC COMPANY
-----------------------------
(Exact Name of Registrant as specified in its Charter)


Maine 01-0024370
----- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)


33 State Street, Bangor, Maine 04401
------------------------------ -----
(Address of Principal Executive Offices) (Zip Code)


Registrant's Telephone Number, including Area Code 207-945-5621
------------

None
----
Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report


Securities registered pursuant to Section 12(g) of the Act:

Title of each class
-------------------

7% Preferred Stock, $100 Par Value
4 1/4% Preferred Stock, $100 Par Value
4% Preferred Stock Series A, $100 Par Value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.


Yes X No ____
----



FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2003


PAGE
----
Cover Page 1

Index 2

PART I - FINANCIAL INFORMATION
- ------------------------------

Item 1. Financial Statements

Consolidated Statements of Income 3

Consolidated Balance Sheets - March 31, 2003
And December 31, 2002 4

Consolidated Statements of Capitalization 6

Consolidated Statements of Cash Flows 7

Consolidated Statements of Common Stock Investment 8

Notes to the Consolidated Financial Statements 9

Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 14

Item 3. Quantitative and Qualitative Disclosures
About Market Risk 26

Item 4. Controls and Procedures 26


PART II - OTHER INFORMATION
- ---------------------------

Item 5 - Other Information 27

Item 6 - Exhibits and Reports on Form 8-K 27

Signature Page 28

Certifications 29


BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF INCOME
000's Omitted Except Per Share Amounts
(Unaudited)

Three Months Ended
Mar. 31, Mar. 31,
2003 2002
---------------------
Operating Revenues:
Electric operating revenue $ 31,477 $ 29,532
Off-system sales 7,195 6,907
Standard offer service 2 12,206
---------------------
$ 38,674 $ 48,645
---------------------
Operating Expenses:
Purchased power and fuel for generation $ 14,418 $ 11,233
Standard offer service purchased power - 11,890
Other operation and maintenance 7,612 9,715
Depreciation and amortization 2,499 2,676
Regulatory amortizations 2,029 3,649
Taxes -
Local property and other 1,260 1,345
State and federal income 3,256 1,845
---------------------
$ 31,074 $ 42,353
---------------------
Operating Income $ 7,600 $ 6,292

Other Income:
Allowance for equity funds used
during construction $ 98 $ 114
Other, net of applicable income taxes 236 83
---------------------
Income Before Interest Expense $ 7,934 $ 6,489
---------------------
Interest Expense:
Long-term debt $ 2,808 $ 3,378
Other 199 192
Allowance for borrowed funds used
during construction (75) (109)
---------------------
$ 2,932 $ 3,461
---------------------
Net Income $ 5,002 $ 3,028

Dividends On Preferred Stock 48 66
---------------------
Earnings Applicable To Common Stock $ 4,954 $ 2,962
=====================
Weighted Average Number of Shares Outstanding 7,363 7,363
=====================
Earnings Per Common Share $ .67 $ .40
=====================
Dividends Declared Per Common Share $ - $ -
=====================

See notes to the consolidated financial statements.



BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)



Mar. 31, Dec. 31,
Assets 2003 2002
----------- -----------
Investment In Utility Plant:
Electric plant in service, at original cost $ 334,379 $ 333,410
Less - Accumulated depreciation and amortization 99,725 97,473
------------ ------------
$ 234,654 $ 235,937
Construction work in progress 6,082 5,934
------------ ------------
$ 240,736 $ 241,871
Investments in corporate joint ventures:
Maine Yankee Atomic Power Company $ 3,788 $ 4,034
Maine Electric Power Company, Inc. 1,049 1,004
------------ ------------
$ 245,573 $ 246,909
------------ ------------
Other Investments, at cost $ 3,560 $ 3,591
------------ ------------
Funds held by trustee, at cost $ 21,537 $ 21,192
------------ ------------
Current Assets:
Cash and cash equivalents $ 827 $ 989
Accounts receivable, net of reserve
of $1,206 for 2003 and $1,085 for 2002 21,113 21,027
Unbilled revenue receivable 8,534 8,319
Inventories, at average cost:
Material and supplies 2,430 2,467
Fuel oil 73 45
Prepaid expenses 84 285
------------ ------------
Total current assets $ 33,061 $ 33,132
------------ ------------
Regulatory Assets and Deferred Charges:
Goodwill-EMERA Acquisition $ 82,537 $ 82,537
Investment in Seabrook nuclear project 21,448 21,873
Costs to terminate/restructure purchased
power contracts 67,795 72,676
Maine Yankee decommissioning costs 30,083 31,101
Above-market purchased power contract obligations - 63,341
Other regulatory assets 56,684 57,844
Other deferred charges 5,670 6,535
------------ ------------
Total regulatory assets and deferred charges $ 264,217 $ 335,907
------------ ------------
Total Assets $ 567,948 $ 640,731
============ ============

See notes to the consolidated financial statements.






BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEETS
000's Omitted
(Unaudited)


Mar. 31, Dec. 31,
2003 2002
Stockholders' Investment and Liabilities ----------- -----------


Capitalization:
Common stock investment $ 210,734 $ 206,266
Preferred stock 628 4,734
Long-term debt, net of current portion 117,613 118,059
------------ ------------
Total capitalization $ 328,975 $ 329,059
------------ ------------
Current Liabilities:
Notes payable - banks $ 11,000 $ 16,000
------------ ------------
Other current liabilities -
Current portion of long-term debt $ 34,213 $ 34,137
Accounts payable 15,769 20,282
Dividends payable 33 66
Accrued interest 3,278 2,093
Customers' deposits 598 572
Current income taxes (refundable) payable 3,420 (355)
------------ ------------
Total other current liabilities $ 57,311 $ 56,795
------------ ------------
Total current liabilities $ 68,311 $ 72,795
------------ ------------

Regulatory and Other Long-term Liabilities:
Deferred income taxes - Seabrook $ 11,119 $ 11,338
Other accumulated deferred income taxes 48,933 48,947
Maine Yankee decommissioning liability 30,083 31,101
Deferred gain on asset sale 7,631 9,889
Above-market purchased power contract obligations - 63,341
Other regulatory liabilities 9,244 11,265
Unamortized investment tax credits 1,162 1,186
Accrued pension and postretirement benefit costs 51,394 50,494
Other long-term liabilities 11,096 11,316
------------ ------------
Total regulatory and other long-term liabilities $ 170,662 $ 238,877
------------ ------------
Total Stockholders' Investment and Liabilities $ 567,948 $ 640,731
============ ============

See notes to the consolidated financial statements.


BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
000's Omitted
(Unaudited)


Mar. 31, Dec. 31,
2003 2002
--------------------
Common Stock Investment
Common stock, no par value, stated value $5 per share $ 36,817 $ 36,817
-Authorized--10,000,000 shares
-Outstanding--7,363,424 shares
Amounts paid in excess of par value 164,866 165,352
Accumulated other comprehensive loss (2,033) (2,033)
Retained earnings 11,084 6,130
--------------------
Total common stock investment $ 210,734 $ 206,266
--------------------
Preferred Stock
Non-participating, cumulative, par value $100 per share,
authorized 600,000 shares, not redeemable or
redeemable solely at the option of the issuer-
7%, Noncallable
-Authorized - 25,000 shares
-Outstanding - 6,277 shares in 2003 and
25,000 shares in 2002 $ 628 $ 2,500
4.25%, Callable at $100
-Authorized - 4,840 shares
-Outstanding - 4,840 shares in 2002 - 484
4%, Series A, Callable at $110
-Authorized - 17,500 shares
-Outstanding - 17,500 shares in 2002 - 1,750
--------------------
$ 628 $ 4,734
--------------------
Long-Term Debt
First Mortgage Bonds-
10.25% Series due 2020 $ 30,000 $ 30,000
8.98% Series due 2022 20,000 20,000
7.30% Series due 2003 15,000 15,000
--------------------
$ 65,000 $ 65,000
--------------------
Other Long-Term Debt-
Finance Authority of Maine - Taxable Electric
Rate Stabilization Revenue Notes,
7.03% Series 1995A, due 2005 $ 55,400 $ 55,400
Municipal Review Committee Note, 5%, due 2008 11,412 11,781
Senior Unsecured Note, 6.09%, due 2012 20,000 20,000
Other Miscellaneous Notes Payable, 3.90%, due 2006 14 15
--------------------
$ 86,826 $ 87,196
Less: Current portion of long-term debt 34,213 34,137
--------------------
$ 52,613 $ 53,059
--------------------
Total Long-Term Debt $ 117,613 $ 118,059
--------------------
Total Capitalization $ 328,975 $ 329,059
====================

See notes to the consolidated financial statements.


BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
000's Omitted
(Unaudited)


Three Months Ended
Mar. 31, Mar. 31,
2003 2002
---------------------
Cash Flows From Operating Activities:
Net income $ 5,002 $ 3,028
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 2,499 2,676
Amortization of Seabrook nuclear project 425 425
Amortization of contract buyouts and
restructuring 4,881 5,411
Amortization of deferred asset sale gain (2,258) (2,042)
Other amortizations (882) 274
Allowance for equity funds used during
construction (98) (114)
Deferred income tax provision and amortization of
investment tax credits (251) (46)
Changes in assets and liabilities:
Costs to restructure purchased power contract - (250)
Deferred standard-offer service costs 2 (2,176)
Deferred special rate contract revenues 303 (613)
Employee transition costs (237) -
Accounts receivable, net and unbilled revenue (301) 6,953
Accounts payable (4,276) (4,238)
Accrued interest 1,185 836
Current income taxes 3,776 (1,500)
Accrued pension and postretirement benefit costs 1,482 1,169
Other current assets and liabilities, net 236 409
Other, net (615) (664)
--------------------
Net Increase in Cash From Operating Activities: $ 10,873 $ 9,538
--------------------
Cash Flows From Investing Activities:
Construction expenditures $ (1,230)$ (3,124)
Proceeds from redemption of Maine Yankee common stock 314 -
Allowance for borrowed funds used during construction (75) (109)
--------------------
Net Decrease in Cash From Investing Activities $ (991)$ (3,233)
--------------------
Cash Flows From Financing Activities:
Dividends on preferred stock $ (82)$ (66)
Redemption of preferred stock (4,592) -
Payments on long-term debt (370) (2,081)
Short-term debt, net (5,000) (4,000)
--------------------
Net Decrease in Cash From Financing Activities $ (10,044)$ (6,147)
--------------------
Net (Decrease) Increase in Cash and Cash Equivalents $ (162)$ 158
Cash and Cash Equivalents at Beginning of Period 989 885
--------------------
Cash and Cash Equivalents at End of Period $ 827 $ 1,043
====================
Cash Paid During the Period for:
Interest (Net of Amount Capitalized) $ 1,586 $ 2,411
Income Taxes - 4,100
====================

See notes to the consolidated financial statements.




BANGOR HYDRO-ELECTRIC COMPANY
CONSOLIDATED STATEMENTS OF COMMON STOCK INVESTMENT
000's Omitted
(Unaudited)


Accum.
Amounts Other Total
Paid in Compre- Common
Common Excess of Retained hensive Stock
Stock Par Value Earnings Loss Investment
----------- ------------ ---------- ------------ ------------

Balance December 31, 2001 $ 36,817 $ 165,352 $ 3,435 $ (47) $ 205,557
Net income - - 3,028 - 3,028
Other comprehensive loss
net of taxes:
Unrealized gain on interest
rate swap - - - 27 27
-----------
Total comprehensive income 3,055
-----------
Cash dividends declared on-
Preferred stock - - (66) - (66)
Common stock - - - - 0
----------- ----------- ----------- ----------- -----------
Balance March 31, 2002 $ 36,817 $ 165,352 $ 6,397 $ (20) $ 208,546
=========== =========== =========== =========== ===========
Balance December 31, 2002 $ 36,817 $ 165,352 $ 6,130 $ (2,033) $ 206,266
Net income - - 5,002 - 5,002
Other comprehensive loss
net of taxes:
Minuimum pension liability - - - - -
-----------
Total comprehensive income 5,002
-----------
Loss on redemption of
preferred stock - (486) - - (486)

Cash dividends declared on-
Preferred stock - - (48) - (48)
Common stock - - - - -
----------- ----------- ----------- ----------- -----------
Balance March 31, 2003 $ 36,817 $ 164,866 $ 11,084 $ (2,033) $ 210,734
=========== =========== =========== =========== ===========

See notes to the consolidated financial statements.



BANGOR HYDRO-ELECTRIC COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
-------------
(Unaudited)


(1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES:
---------------------------------------------

Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, have been condensed or omitted in this Form 10-Q
pursuant to the Rules and Regulations of the Securities and Exchange
Commission. However, in the opinion of Bangor Hydro-Electric Company
(the Company), the disclosures contained in this Form 10-Q are adequate
to make the information presented not misleading. The year end
condensed balance sheet data was derived from audited consolidated
financial statements but does not include all disclosures required by
generally accepted accounting principles. These statements should be
read in conjunction with the consolidated financial statements,
footnotes and all other information included in the 2002 Form 10-K.

In the opinion of the Company, the accompanying unaudited
consolidated financial statements reflect all adjustments, including
normal recurring accruals, necessary to present fairly the financial
position as of March 31, 2003 and the results of operations and cash
flows for the periods ended March 31, 2003 and 2002.

The Company's significant accounting policies are described in the
Notes to the Consolidated Financial Statements included in its 2002
Form 10-K filed with the Securities and Exchange Commission. For
interim reporting purposes, the Company follows these same basic
accounting policies but considers each interim period as an integral
part of an annual period. Accordingly, certain expenses are allocated
to interim periods based upon estimates of such expenses for the year.

(2) INCOME TAXES:
------------

The following table reconciles a provision calculated by
multiplying income before federal income taxes by the statutory federal
income tax rate to the federal income tax provision:

Three Months Ended March 31,
---------------------------
2003 2002
---- ----
Amount % Amount %
------ - ------ -
(Dollars in Thousands)
Federal income tax provision
at statutory rate $2,984 35.0 $1,743 35.0
Plus permanent reductions
in tax expense resulting
from statutory exclusions
from taxable income 81 .9 42 .8
------ ---- ------ ----
Federal income tax provision before
effect of temporary differences
and investment tax credits $3,065 35.9 $1,785 35.8
Less temporary differences that
are flowed through for rate-
making and accounting purposes (302) (3.5) (188) (3.8)
Less utilization and amortization
of investment tax credits (24) (.3) (32) (.6)
------ ---- ------ ----
Federal income tax provision $2,739 32.1 $1,565 31.4
====== ==== ====== ====

(3) INVESTMENT IN JOINTLY OWNED FACILITIES:
--------------------------------------

Condensed financial information for Maine Yankee Atomic Power
Company (Maine Yankee) and Maine Electric Power Company, Inc. (MEPCO)
is as follows:


MAINE YANKEE MEPCO
------------ -----
(Dollars in Thousands - Unaudited)
Operations for Three Months Ended
--------------------------------------
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
2003 2002 2003 2002
OPERATIONS: -------- -------- -------- --------
As reported by investee-
Operating revenues $ 14,534 $ 15,045 $ 865 $ 1,079
======== ======== ======== ========
Earnings applicable to
common stock $ 882 $ 1,011 $ 320 $ 426
======== ======== ======== ========
Company's reported equity-
Equity in net income $ 62 $ 71 $ 45 $ 60
Add(Deduct)-Effect of
adjusting Company's
estimate to actual 8 4 3 (6)
-------- -------- -------- --------
Amounts reported by Company $ 70 $ 75 $ 48 $ 54
======== ======== ======== ========

MAINE YANKEE MEPCO
------------ -----
(Dollars in Thousands - Unaudited)
Financial Position at
----------------------------------------
Mar. 31, Dec. 31, Mar. 31, Dec. 31,
2003 2002 2003 2002
FINANCIAL POSITION: --------- --------- --------- --------
As reported by investee-
Total assets $ 657,034 $ 679,975 $ 7,838 $ 7,680
Less-
Long-term debt 19,200 21,600 - -
Other liabilities and
deferred credits 586,734 600,656 470 608
---------- ---------- -------- --------
Net assets $ 51,100 $ 57,719 $ 7,368 $ 7,072
========== ========== ======== ========
Company's reported equity-
Equity in net assets $ 3,577 $ 4,040 $ 1,046 $ 1,004
Add (deduct) effect of
adjusting Company's
estimate to actual 210 (6) 3 -
---------- ---------- -------- --------
Amounts reported by Co. $ 3,787 $ 4,034 $ 1,049 $ 1,004
========== ========== ======== ========


(4) NEW ACCOUNTING PRONOUNCEMENT:
----------------------------
In June 2002, the Financial Accounting Standards Board issued
Statement No. 143, "Accounting for Asset Retirement Obligations". This
Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. It applies to legal obligations
associated with the retirement of long-lived assets that result from
acquisition, construction, development and (or) the normal operation of
a long-lived asset, except for certain obligations of lessees. This
Statement is effective for financial statements issued for fiscal years
beginning after June 15, 2002. The Company implemented the provisions
of this Statement on January 1, 2003.

The implementation of this Statement did not materially impact the
Company's financial position, earnings or cash flows, principally as a
result of the regulatory accounting utilized by the Company.

The Company recorded asset retirement obligations and associated
long-lived assets in the first quarter of 2003 principally associated
with certain property and equipment where certain regulations require
removal of these assets at a future date. The following represents a
reconciliation of the beginning and ending aggregate carrying amounts of
asset retirement obligations (Dollars in Thousands).

Asset Retirement Obligation - January 1, 2003 $393
Liabilities Incurred in the Current Period -
Liabilities Settled in the Current Period -
Accretion Expense in the Current Period 8
Revisions in Estimated Cash Flows -
----
Asset Retirement Obligation - March 31, 2003 $401
====

(5) ABOVE MARKET PURCHASED POWER CONTRACT OBLIGATIONS:
-------------------------------------------------

As discussed in Note 12 to the 2002 Form 10-K, the Company had two
power contracts (one purchase and one sale) that qualified for
derivative accounting under Statement of Financial Accounting Standards
No. 133 (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities," as amended by SFAS No. 138. The power sales
contract ended in the first quarter of 2003, and hence there was no
longer any SFAS No. 133 applicability at March 31, 2003. In connection
with the power sales contract, certain criteria that resulted in the
contract qualifying for derivative accounting under SFAS No. 133 were
determined to no longer be applicable at March 31, 2003. As a result,
the fair value of the above-market portion of these contracts, which
represented a liability of approximately $63.3 million at December 31,
2002, was adjusted to zero at March 31, 2002.

(6) RECLASSIFICATIONS:
-----------------
Certain 2002 amounts have been reclassified to conform with the
presentation used in Form 10-Q for the quarter ended March 31, 2003.



Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

Management's Discussion and Analysis of the Results of Operations and
Financial Condition contained in Bangor Hydro-Electric Company's (the
Company) Annual Report on Form 10-K for the year ended December 31, 2002
(2002 Form 10-K) should be read in conjunction with the comments below.

EARNINGS

For the quarters ended March 31, 2003 and 2002 basic earnings per
common share were $.67 and $.40, respectively. Principally as a result of
the Company's workforce reductions in 2002, labor expense was approximately
$1.4 million lower in first quarter of 2003 as compared to the first quarter
of 2002 ($.11 increase in earnings per common share). Also, primarily
attributable to cold weather in the first quarter of 2003, increased energy
sales to customers resulted in greater electric operating revenues in the
first quarter of 2003 in comparison to the first quarter of 2002. For non-
large special rate contract customers, as a result of increased sales,
electric operating revenues were approximately $1.5 million higher in the
first quarter of 2003 than in the 2002 period ($.12 increase in earnings per
common share). Earnings were also benefited in the first quarter of 2003
by other non-labor cost reductions associated with the Company's
restructuring efforts.

REVENUES

Electric operating revenues are as follows for each of the quarters
ending March 31, 2003 and 2002:

($ in 000's) 2003 2002 Change
---- ---- ------

Residential $14,489 $13,373 $1,116

Commercial 11,132 9,363 1,769

Industrial 3,273 2,667 606

Other 475 473 2
------------------------------

Subtotal $29,369 $25,876 $3,493

Large Special Contracts 1,224 1,979 (755)
------------------------------

Total Related to Energy Sales $30,593 $27,855 $2,738

Other Miscellaneous Revenues 884 1,677 (793)
-------------------------------

Total Electric Operating
Revenue $31,477 $29,532 $1,945
-------------------------------

Energy sales volume in megawatt hours is as follows for each of the
quarters ending March 31, 2003 and 2002:

2003 2002 Change
---- ---- ------


Residential 161,177 147,171 14,006

Commercial 151,601 145,763 5,838

Industrial 47,685 47,156 529

Other 2,896 2,907 (11)
-------------------------------

Subtotal 363,359 342,997 20,362

Large Special Contracts 47,887 66,417 (18,530)
--------------------------------

Total Energy Sales 411,246 409,414 1,832
--------------------------------


Electric operating revenue increased by approximately $1.945 million
in first quarter of 2003 as compared to the first quarter of 2002. The
increase was principally the result of the previously discussed 6.54% rate
increase associated with stranded cost recovery. Also impacting the increased
revenues in 2003 was a 6% increase in energy sales, which excludes certain
large special contract customers. The increased energy sales were positively
impacted by much colder weather in the first quarter of 2003 as compared to
the 2002 quarter.

Electric operating revenues associated with large special contract
customer decreased by approximately $755,000 in the first quarter of 2003 due
mostly to the effect of a special rate contract with a large industrial
customer. Effective July 1, 2001, the Company entered into a special rate
contract with a large industrial customer to provide fully bundled electric
service (both T&D and energy) to this customer. Formerly, the Company was
only providing T&D service to this customer. The Company entered into a power
purchase contract to procure the power necessary to serve this customer under
this contract. Principally as a result of the new contract, which ended in
March 2002, the Company recognized approximately $829,000 in greater electric
operating revenues associated with this customer in the first quarter of 2002
as compared to the 2003 quarter.

Other miscellaneous revenues were lower in the 2003 quarter as a
result of an approximately $671,000 reduction in certain stranded cost
related revenue deferrals. The decrease is due to the implementation of new
stranded cost rates on March 1, 2002.

Off-system sales, which are sales related to power pool and inter-
connection agreements and resales of purchased power, were approximately
$288,000 greater in the 2003 quarter in relation to 2002. Effective March 1,
2002, the Company was no longer responsible for being the standard-offer
service provider. The Company, though, still has a standard-offer related
power supply commitment with a third party through February 2004 amounting to
approximately $54 million. The power delivered under this contract is being
resold to one of the new standard-offer service providers, with estimated
revenues to be realized of approximately $40 million. The difference between
the cost of the power and the resale revenues are being recovered in the
Company's stranded cost rates starting March 1, 2002. The power resales
associated with this contract were approximately $3.7 million higher in the
first quarter of 2003 as compared to the 2002 quarter. Also, one of the
Company's other power sale contracts ended in February 2003, and as a result,
associated revenues were approximately $3.4 million lower in the first
quarter of 2003. The Company's stranded cost rates that were set on March
1, 2002 were adjusted to take into consideration the end of this long-term
power sales contract.

The $12.1 million decrease in standard-offer service revenues in 2003
is due mostly to the Company no longer being the standard-offer provider
effective March 1, 2002.


EXPENSES

Purchased power and fuel for generation expense, excluding the cost
of standard-offer service purchased power, increased $3.2 million in the
first quarter of 2003 as compared to 2002. The largest item affecting the
increased expense was an approximately $5 million increase in costs in the
first quarter of 2003 associated with the previously discussed former
standard-offer power contract obligation. Offsetting this increase to some
extent was the previously discussed special rate contract with a large
industrial customer. In the first quarter of 2002, the Company incurred
approximately $897,000 of purchased power expense associated with serving the
customer.

Standard-offer purchased power expense decreased by approximately
$11.9 million in the first quarter of 2003 relative to the first quarter of
2002. The decrease was due principally to the Company no longer being the
standard offer service provider on March 1, 2002.

Other O&M expense decreased by approximately $2.1 million in the
first quarter of 2003 in comparison to the first quarter of 2002. Principally
as a result of the workforce reductions in the second quarter of 2002, O&M
payroll expense was approximately $1.4 million lower in the first quarter of
2003 relative to the 2002 quarter. This decrease was also impacted by
increased overtime pay in the first quarter of 2002 in connection with
electric service restoration efforts as a result of a major winter storm in
January 2002. Bad debt expense was approximately $418,000 lower in the
first quarter of 2003 due principally to standard-offer service related bad
debt write-offs in the 2002 quarter, and in 2003 the bad debt reserve was
reduced by $149,000 primarily due to reduced loss exposure associated with
customers with bad debt reserves previously established in 2002. Due
principally to a refocus of the Company's line clearance program (tree
trimming) starting in the second half of 2002, the associated expense was
approximately $343,000 lower in first quarter of 2003 in comparison to the
2002 quarter. Also, as a result of the previously discussed major storm in
January 2002, non-labor service restoration costs were approximately $313,000
higher in the first quarter of 2002 than in the 2003 first quarter. These
decreases in other O&M expense were offset somewhat by a $389,000 increase in
pension and other postretirement benefit costs in the 2003 quarter. The
increased expense is principally attributable to decreases in the discount
rate used to actuarially compute the expense as well as reduced expected
returns on pension plan assets as a result of poor stock market performance.

Depreciation and amortization expense was lower in the first quarter
of 2003 due principally to the impact of certain electric plant retirements
made in 2002. These reductions were offset to some extent by the effect of
plant additions in 2003.

Regulatory amortizations represent current amortizations allowed in
the Company's distribution and stranded cost rates as allowed by the Maine
Public Utilities Commission in prior rate orders. These include the
amortization of purchased power contract buyouts/restructurings, Seabrook
investment, deferred asset sale gain, and other regulatory amortizations.
Effective March 1, 2002, in connection with the implementation of new
stranded cost electric rates, the Company began amortizing stranded cost
related regulatory assets and liabilities that had been previously deferred
on the Company's balance sheet. Also, certain existing stranded cost related
amortizations were modified effective March 1, 2002 in connection with the
stranded cost rate change. The following summarizes the components of the
regulatory amortizations for the first quarter of 2003 as compared to the
first quarter of 2002 (in 000's):

2003 2002
---- ----

Seabrook investment $ 425 $ 425

Contract buyouts and restructuring 4,881 5,411

Deferred asset sale gain (2,258) (2,042)

Other stranded cost related regulatory
assets and liabilities (1,496) (435)

Distribution related regulatory assets and
liabilities 281 290

Employee transition costs 196 -
-----------------------

Total Regulatory Amortizations $ 2,029 $ 3,649
-----------------------


The reduction in property and other taxes is due mostly to decreased
payroll taxes in the first quarter of 2003 resulting principally from the
previously discussed decrease in payroll costs in 2003.

The increase in total federal and state income taxes was principally
a function of higher earnings in the first quarter of 2003 as compared to the
2002 quarter. See Footnote 2 to the Consolidated Financial Statements for a
reconciliation of the Company's effective income tax rate.

OTHER INCOME AND (DEDUCTIONS) AND INTEREST EXPENS

Other income, net of income taxes increased by $153,000 in the first
quarter of 2003 principally as a result of $384,000 expense in the first
quarter of 2002 in connection with a contractual arrangement associated with
a retiring officer of the Company.

Long-term debt interest expense decreased $570,000 in the first
quarter of 2003 relative to 2002 due primarily to a $16.1 million principal
payment on the Company's Finance Authority of Maine (FAME) Revenue Notes at
the end of June 2002, the final repayment of the $24.8 million medium term
notes in July 2002, the retirement of the $20 million in 7.38% first mortgage
bonds at the end of July 2002, and quarterly principal payments on the $13.7
million note with the Municipal Review Committee in connection with the
exercise of common stock warrants. These decreases were offset to some
extent by interest expense in the 2003 quarter resulting from the issuance of
$20 million in 6.09% senior unsecured notes in December 2002.

Other interest expense increased $7,000 due principally to borrowings
under the Company's revolving credit facility in the first quarter of 2003.
Weighted average borrowings outstanding were approximately $9.6 million
higher for the first quarter of 2003 than in the 2002 quarter. This was
offset to some extent by a reduction in the amortization of debt issuance
costs in the first quarter of 2003. The amortization decrease was primarily
attributable to the end of the amortization period of certain deferred debt
issuance costs.

LIQUIDITY AND CAPITAL RESOURCES

The Consolidated Statements of Cash Flows reflect events in the first
quarters of 2003 and 2002 as they affect the Company's liquidity. Net
increase in cash from operating activities was $10.9 million in the first
quarter of 2003 as compared to $9.5 million in the 2002 quarter. Increased
cash flows from operations in the 2003 quarter as compared to 2002 were
impacted by a $4.1 million increase in income tax payments in the first
quarter of 2002 relative to 2003. Operating cash flows are also impacted in
the first quarter of 2002 by the standard-offer service. In the 2002
quarter, the Company's standard-offer service costs exceeded revenues by
approximately $2.2 million. Changes in accounts receivable and accounts
payable in the statement of cash flows are also greatly impacted by the
standard-offer related revenues and purchased power obligations.

Construction expenditures were approximately $1.9 million lower in
the 2003 quarter as compared to 2002 due principally to the financing of a
major transmission line project being constructed for the benefit of a third
party. These construction costs are currently being financed by the third
party in the first quarter of 2003. Upon the completion of certain
contractual agreements in 2003, the Company will reimburse the third party
for these construction costs. The cost of the transmission line plus a
return will be paid by the third party under the Company's transmission rate
tariff over a 15-year period beginning upon completion of the construction
project.

In the first quarter of 2003, the Company received $314,000 in
proceeds from Maine Yankee Atomic Power Company (Maine Yankee) in connection
with the redemption of common stock. The Company is a 7% owner of the Maine
Yankee nuclear plant. Maine Yankee, starting in 2001, began a program of
systematically redeeming its common stock from its owners in connection with
the decommissioning of the plant.

As discussed in the 2002 Form 10-K, in the first quarter of 2003, the
Company completed the redemption of a significant portion of its outstanding
preferred stock, at a total cost of $4.6 million. As a result of the
decrease in preferred shareholders, the Company has filed with the Securities
and Exchange Commission for de-registration of its preferred stock.

The decrease in payments on long-term debt is due principally to the
monthly principal payments on the $24.8 million medium term notes in the 2002
quarter. This long-term debt was fully repaid in July 2002.

ENVIRONMENTAL MATTERS

The Company is regulated by the United States Environmental
Protection Agency (EPA) as to compliance with the Federal Water Pollution
Control Act, the Clean Air Act, and several federal statutes governing the
treatment and disposal of hazardous wastes. The Company is also regulated by
the Maine Department of Environmental Protection (DEP) under various Maine
environmental statutes. The Company is actively engaged in complying with
these federal and state acts and statutes, and it has not, to date,
encountered material difficulties in connection with such compliance.

In 1992, the Company received notice from the DEP that it was
investigating the cleanup of several sites in Maine that were used in the
past for the disposal of waste oil and other hazardous substances, and that
the Company, as a generator of waste oil that was disposed at those sites,
may be liable for certain cleanup costs. The Company learned in October 1995
that the EPA placed one of those sites on the National Priorities List under
the Comprehensive Environmental Response, Compensation and Liability Act and
would pursue potentially responsible parties. With respect to this site, the
Company is one of a number of waste generators under investigation.

The Company has recorded a liability, based on currently available
information, for what it believes are the estimated environmental remediation
costs that the Company expects to incur for this waste disposal site. In
addition, future environmental cleanup costs are not reasonably estimable due
to a number of factors, including the unknown magnitude of possible
contamination, the appropriate remediation methods, and possible effects of
future legislation or regulation and the possible effects of technological
changes. At March 31, 2003, the liability recorded by the Company for its
estimated environmental remediation costs amounted to $380,000. The
Company's actual future environmental remediation costs may change as
additional factors become known.

The Company estimates that during 2003 it will incur approximately
$188,000 in operations expense to comply with environmental standards for
air, water and hazardous materials. This amount may change based on facts
and circumstances that occur in 2003.

FORWARD LOOKING STATEMENTS

Management's discussion and analysis of results of operations and
financial condition contains items that are "forward-looking" as defined in
the Private Securities Litigation Reform Act of 1995. These statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those anticipated in the forward-looking statements.
Readers should not place undue reliance on forward-looking statements, which
reflect management's view only as of the date hereof. The Company undertakes
no obligation to publicly revise these forward-looking statements to reflect
subsequent events or circumstances. Factors that might cause such differences
include, but are not limited to, the Company's merger with Emera, future
economic conditions, relationships with lenders, earnings retention and
dividend payout policies, developments in the legislative, regulatory and
competitive environments in which the Company operates and other
circumstances that could affect revenues and costs.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's major financial market risk exposure is changing
interest rates. Changes in interest rates will affect interest paid on
variable rate debt and the fair value of fixed rate debt. The Company
manages interest rate risk through a combination of both fixed and variable
rate debt instruments.

Item 4. CONTROLS AND PROCEDURES

During the 90-day period prior to the filing date of this report,
management, including the Company's Principal Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based upon, and as of the
date of that evaluation, the Principal Executive Officer and Chief Financial
Officer concluded that the disclosure controls and procedures were effective,
in all material respects, to ensure that information required to be disclosed
in the reports the Company files and submits under the Exchange Act is
recorded, processed, summarized and reported as and when required.

There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect internal
controls subsequent to the date the Company carried out its evaluation.



PART II. OTHER INFORMATION

Item 5. OTHER INFORMATION

None.


Item 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits - None.

Reports on Form 8-K - None.




SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




BANGOR HYDRO-ELECTRIC COMPANY
-----------------------------
(Registrant)




Dated: May 9, 2003 /s/ David R. Black
------------------

David R. Black
Chief Financial Officer





CERTIFICATIONS

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Bangor Hydro-Electric Company (the
Company) on Form 10-Q for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission on May 9, 2003, we, the undersigned,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.


/s/ David R. Black
- ------------------

David R. Black
Chief Financial Officer
May 9, 2003



/s/ Raymond R. Robinson
- -----------------------

Raymond R. Robinson
Principal Executive Officer
May 9, 2003


This certification is made solely for purpose of 18 U.S.C. Section 1350,
subject to the knowledge standard contained therein, and not for any other
purpose.




I, David R. Black, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bangor Hydro-
Electric Company;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

Date: May 9, 2003


/s/ David R. Black
- ------------------

David R. Black
Chief Financial Officer



I, Raymond R. Robinson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bangor Hydro-
Electric Company;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

Date: May 9, 2003


/s/ Raymond R. Robinson
- -----------------------

Raymond R. Robinson
Principal Executive Officer