PUBLIC SERVICE CO OF NEW HAMPSHIRE - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002
-----------------

OR

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

For the transition period from ________ to ________

Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
- ----------- ----------------------------------- ------------------

1-5324 NORTHEAST UTILITIES 04-2147929
-------------------
(a Massachusetts voluntary association)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-2010
Telephone: (413) 785-5871

0-11419 THE CONNECTICUT LIGHT AND POWER COMPANY 06-0303850
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(a Connecticut corporation)
107 Selden Street
Berlin, Connecticut 06037-1616
Telephone: (860) 665-5000

1-6392 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE 02-0181050
---------------------------------------
(a New Hampshire corporation)
Energy Park
780 North Commercial Street
Manchester, New Hampshire 03101-1134
Telephone: (603) 669-4000

0-7624 WESTERN MASSACHUSETTS ELECTRIC COMPANY 04-1961130
--------------------------------------
(a Massachusetts corporation)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-2010
Telephone: (413) 785-5871

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

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

Indicate by check mark whether the registrants (1) have 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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.

Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Indicate by check mark whether the registrants are accelerated filers (as
defined in Rule 12b-2 of the Act).

Yes X No
--- ---

The aggregate market value of Northeast Utilities' Common Shares, $5.00 Par
Value, held by nonaffiliates, was $1,778,613,088 based on a closing sales
price of $14.00 per share for the 127,043,792 common shares outstanding on
February 28, 2003. Northeast Utilities holds all of the 6,035,205 shares,
301 shares, and 434,653 shares of the outstanding common stock of
The Connecticut Light and Power Company, Public Service Company of New
Hampshire and Western Massachusetts Electric Company, respectively.

Documents Incorporated by Reference:

Part of Form 10-K
into Which Document
Description is Incorporated
----------- --------------------

Portions of Annual Reports of the following
companies for the year ended December 31, 2002:

Northeast Utilities Part II
The Connecticut Light and Power Company Part II
Public Service Company of New Hampshire Part II
Western Massachusetts Electric Company Part II

Portions of the Northeast Utilities Proxy
Statement dated March 27, 2003 Part III

GLOSSARY OF TERMS

The following is a glossary of frequently used abbreviations or acronyms
that are found in this report:

COMPANIES

Acumentrics....................... Acumentrics Corporation
Baycorp........................... Baycorp Holdings, Ltd.
BMC............................... BMC Energy LLC
Boulos............................ E.S. Boulos Company
Citigroup......................... Citigroup, Inc.
CL&P.............................. The Connecticut Light and Power Company
Con Edison........................ Consolidated Edison, Inc.
CRC............................... CL&P Receivables Corporation
CVEC.............................. Connecticut Valley Electric Company, Inc.
CVPS.............................. Central Vermont Public Service
Corporation
CYAPC............................. Connecticut Yankee Atomic Power Company
DNCI.............................. Dominion Nuclear Connecticut, Inc.
Dominion.......................... Dominion Resources, Inc.
Entergy........................... Entergy Corporation
FPL............................... FPL Group, Inc.
Funding Companies................. CL&P Funding LLC, PSNH Funding LLC,
PSNH Funding LLC 2, and WMECO Funding LLC
HEC/CJTS.......................... HEC/CJTS Energy Center LLC
HEC/Tobyhanna..................... HEC/Tobyhanna Energy Project, LLC
HP&E.............................. Holyoke Power and Electric Company
HWP............................... Holyoke Water Power Company
Mode 1............................ Mode 1 Communications, Inc.
MYAPC............................. Maine Yankee Atomic Power Company
NAEC.............................. North Atlantic Energy Corporation
NAESCO............................ North Atlantic Energy Service Corporation
NEON.............................. NEON Communications, Inc.
NGC............................... Northeast Generation Company
NGS............................... Northeast Generation Services Company
NMEM.............................. Niagara Mohawk Energy Marketing, Inc.
NNECO............................. Northeast Nuclear Energy Company
NRG............................... NRG Energy, Inc.
NRG-PM............................ NRG Power Marketing, Inc.
NU or the company................. Northeast Utilities
NU system......................... Northeast Utilities System
NUEI.............................. NU Enterprises, Inc.
NUSCO............................. Northeast Utilities Service Company
PSNH.............................. Public Service Company of New Hampshire
RMS............................... R.M. Services, Inc.
RRR............................... The Rocky River Realty Company
Select Energy..................... Select Energy, Inc.
SENY.............................. Select Energy New York, Inc.
SESI.............................. Select Energy Services, Inc.
VYNPC............................. Vermont Yankee Nuclear Power Corporation
WMECO............................. Western Massachusetts Electric Company
Woods Electrical.................. Woods Electrical Co., Inc.
Woods Network..................... Woods Network Services, Inc.
YAEC.............................. Yankee Atomic Electric Company
Yankee............................ Yankee Energy System, Inc.
Yankee Companies.................. CYAPC, MYAPC, VYNPC, and YAEC
Yankee Gas........................ Yankee Gas Services Company

GENERATING UNITS

Millstone 1....................... Millstone Unit No. 1, a 660 megawatt
nuclear unit completed in 1970; Millstone 1
is currently in decommissioning status and
was sold to a subsidiary of Dominion in
March 2001.
Millstone 2....................... Millstone Unit No. 2, an 870 megawatt
nuclear electric generating unit completed
in 1975; Millstone 2 was sold to a
subsidiary of Dominion in March 2001.
Millstone 3....................... Millstone Unit No. 3, a 1,154 megawatt
nuclear electric generating unit completed
in 1986; Millstone 3 was sold to a
subsidiary of Dominion in March 2001.
Seabrook.......................... Seabrook Unit No. 1, a 1,148 megawatt
nuclear electric generating unit completed
in 1986. Seabrook 1 went into service in
1990. Seabrook 1 was sold to a subsidiary
of FPL in November 2002.

REGULATORS

CSC............................... Connecticut Siting Council
CDEP.............................. Connecticut Department of
Environmental Protection
DOE............................... United States Department of Energy
DPUC.............................. Connecticut Department of
Public Utility Control
DTE............................... Massachusetts Department of
Telecommunications and Energy
EPA............................... United States Environmental
Protection Agency
FERC.............................. Federal Energy Regulatory Commission
NHPUC............................. New Hampshire Public Utilities
Commission
NRC............................... Nuclear Regulatory Commission
SEC............................... Securities and Exchange Commission

OTHER

1935 Act.......................... Public Utility Holding Company
Act of 1935
ABO............................... Accumulated Benefit Obligation
ARO............................... Asset Retirement Obligation
BFA............................... Business Finance Authority
CAAA.............................. Clean Air Act Amendments of 1990
DCA............................... Designated Congestion Areas
District Court.................... United States District Court for the
Southern District of New York
EITF.............................. Emerging Issues Task Force
EMF............................... Electric and Magnetic Fields
Energy Act........................ Energy Policy Act of 1992
EPS............................... Earnings Per Share
ESOP.............................. Employee Stock Ownership Plan
ESPP.............................. Employee Stock Purchase Plan
IERM.............................. Infrastructure Expansion Rate
Mechanism
FASB.............................. Financial Accounting Standards Board
FPPAC............................. Fuel and Purchased-Power
Adjustment Clause
ICAP.............................. Installed Capability
Incentive Plan.................... Northeast Utilities Incentive Plan
ISO............................... Independent System Operator
ITC............................... Independent Transmission Company
kWh............................... Kilowatt-hour
LMP............................... Locational Marginal Pricing
Merger Agreement.................. Agreement and Plan of Merger, as
amended and restated as of January 11,
2000, between NU and Con Edison
MW................................ Megawatts
NEIL.............................. Nuclear Electric Insurance Limited
NEPOOL............................ New England Power Pool
NPDES............................. National Pollutant Discharge
Elimination System
NUG&T............................. Northeast Utilities Generation and
Transmission Agreement
NYMEX............................. New York Mercantile Exchange
O&M............................... Operation and Maintenance
PBO............................... Projected Benefit Obligation
PBOP.............................. Postretirement Benefits Other
Than Pensions
PCRBs............................. Pollution Control Revenue Bonds
Pool.............................. Northeast Utilities System Money Pool
Restructuring Settlement.......... "Agreement to Settle PSNH
Restructuring"
RMR............................... Reliability Must Run
ROC............................... Risk Oversight Council
ROE............................... Return on Equity
RRBs.............................. Rate Reduction Bonds
RRCs.............................. Rate Reduction Certificates
RTO............................... Regional Transmission Organization
SERP.............................. Supplemental Executive Retirement Plan
SFAS.............................. Statement of Financial Accounting
Standards
SMD............................... Standard Market Design
SPE............................... Special Purpose Entity
VIE............................... Variable Interest Entity
VRP............................... Voluntary Retirement Program
VSP............................... Voluntary Separation Program

NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY

2002 Form 10-K Annual Report
Table of Contents

PART I
Page
----

Item 1. Business................................................... 1

The Northeast Utilities System.................................. 1

Safe Harbor Statement........................................... 2

Rates and Electric Industry Restructuring....................... 3

General.................................................... 3
Connecticut Rates and Restructuring........................ 4
Massachusetts Rates and Restructuring...................... 9
New Hampshire Rates and Restructuring...................... 9

Competitive System Businesses................................... 11

Wholesale and Retail Marketing............................. 12
Energy Trading............................................. 14
Electric Generation........................................ 15
Competitive Energy Subsidiaries' Market
and Other Risks............................................ 15
Energy Management Services................................. 17
Telecommunications......................................... 18

Financing Program............................................... 19

2002 Financings............................................ 19
2003 Financing Requirements................................ 20
2003 Financing Plans....................................... 21
Financing Limitations...................................... 21

Construction and Capital Improvement Program.................... 26
Regulated Electric Operations................................... 27

Distribution and Sales..................................... 27
Regional and System Coordination........................... 27
Transmission Access and FERC Regulatory Changes............ 28

Regulated Gas Operations........................................ 30

Nuclear Generation.............................................. 30

General.................................................... 30
Nuclear Fuel............................................... 32
Decommissioning............................................ 33

Other Regulatory and Environmental Matters...................... 35

Environmental Regulation................................... 35
Electric and Magnetic Fields............................... 37
FERC Hydroelectric Project Licensing....................... 38

Employees....................................................... 39

Item 2. Properties................................................. 40

Item 3. Legal Proceedings.......................................... 44

Item 4. Submission of Matters to a Vote of Security Holders........ 50

PART II

Item 5. Market for Registrants' Common Equity and Related
Stockholder Matters........................................ 51

Item 6. Selected Financial Data.................................... 52

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 52

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk................................................ 52

Item 8. Financial Statements and Supplementary Data................ 53

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure........................ 54

PART III

Item 10. Directors and Executive Officers of the Registrants........ 55

Item 11. Executive Compensation..................................... 59

Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters................. 67

Item 13. Certain Relationships and Related Transactions............. 69

Item 14. Controls and Procedures.................................... 69

PART IV

Item 15. Exhibits, Financial Statement Schedules and
Reports on Form 8-K........................................ 71

Signatures and Certifications Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002....................................... 73

NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY

PART I

ITEM 1. BUSINESS
THE NORTHEAST UTILITIES SYSTEM

Northeast Utilities (NU) is the parent company of the Northeast Utilities
system (the NU system). The NU system furnishes franchised retail electric
service to over 1.8 million customers in 409 cities and towns in Connecticut,
New Hampshire and western Massachusetts through three of NU's wholly-owned
subsidiaries (The Connecticut Light and Power Company [CL&P], Public Service
Company of New Hampshire [PSNH] and Western Massachusetts Electric Company
[WMECO]).

The NU system also furnishes franchised retail natural gas service in a
large part of Connecticut through Yankee Gas Services Company (Yankee Gas), a
subsidiary of Yankee Energy System, Inc. (Yankee), the largest natural gas
distribution company in Connecticut. Yankee Gas serves approximately 191,000
residential, commercial and industrial customers in 70 cities and towns in
Connecticut, including large portions of the central and southwest sections of
the state.

NU, through its wholly owned subsidiary, NU Enterprises, Inc. (NUEI), owns
a number of competitive energy and related businesses, including Northeast
Generation Company (NGC), Northeast Generation Services Company (NGS), Select
Energy, Inc. (Select Energy), Select Energy Services, Inc. (SESI; formerly HEC
Inc.) and Mode 1 Communications, Inc. (Mode 1). Holyoke Water Power Company
(HWP), a subsidiary of NU, is a resource of NUEI through an output contract.
For information regarding the activities of these subsidiaries, see
"Competitive System Businesses."

North Atlantic Energy Corporation (NAEC) is a wholly owned special-purpose
operating subsidiary of NU that owned a 35.98 percent interest in the Seabrook
station nuclear unit (Seabrook) in Seabrook, New Hampshire prior to its sale to
the FPL Group, Inc. (FPL) in November 2002. North Atlantic Energy Service
Corporation (NAESCO) had operational responsibility for Seabrook prior to its
sale. Several other wholly owned subsidiaries of NU provide support services
for the NU system companies and, in some cases, for other New England
utilities. Northeast Utilities Service Company (NUSCO) provides centralized
accounting, administrative, information technology, engineering, financial,
legal, operational, planning, purchasing and other services to the NU system
companies. Three other subsidiaries construct, acquire or lease some of the
property and facilities used by the NU system companies.

The NU system is regulated in virtually all aspects of its business by
various federal and state agencies, including the Securities and Exchange
Commission (SEC), the Federal Energy Regulatory Commission (FERC), the Nuclear
Regulatory Commission (NRC) and various state and/or local regulatory
authorities with jurisdiction over the industry and the service areas in which
each company operates, including the Connecticut Department of Public Utility
Control (DPUC), the New Hampshire Public Utilities Commission (NHPUC) and the
Massachusetts Department of Telecommunications and Energy (DTE). In recent
years, there has been significant legislative and regulatory activity changing
the nature of regulation of the industry. For more information regarding these
restructuring initiatives, see "Rates and Electric Industry Restructuring" and
"Regulated Electric Operations."

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995

In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (Reform Act), NU and its reporting subsidiaries
are hereby filing cautionary statements identifying important factors that
could cause NU or its subsidiaries' actual results to differ materially from
those projected in forward looking statements (as such term is defined in the
Reform Act) made by or on behalf of NU or its subsidiaries in this combined
Form 10-K, in any subsequent filings with the SEC, in presentations, in
response to questions, or otherwise. Any statements that express or involve
discussions as to expectations, beliefs, plans, objectives, assumptions or
future events, or performance (often, but not always, through the use of words
or phrases such as will likely result, are expected to, will continue, is
anticipated, estimated, projection, outlook) are not statements of historical
facts and may be forward looking. Forward looking statements involve
estimates, assumptions and uncertainties that could cause actual results to
differ materially from those expressed in the forward looking statements.
Accordingly, any such statements are qualified in their entirety by reference
to, and are accompanied by, the following important factors that could cause NU
or its subsidiaries' actual results to differ materially from those contained
in forward looking statements of NU or its subsidiaries made by or on behalf of
NU or its subsidiaries.

Any forward looking statement speaks only as of the date on which such
statement is made, and NU and its subsidiaries undertake no obligation to
update any forward looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time and
it is not possible for management to predict all of such factors, nor can it
assess the impact of each such factor on the business or the extent to which
any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward looking statements.

Some important factors that could cause actual results or outcomes to
differ materially from those discussed in the forward looking statements
include prevailing governmental policies and regulatory actions, including
those of the SEC, the NRC, the FERC, and state regulatory agencies, with
respect to allowed rates of return, industry and rate structure, operation of
nuclear power facilities, acquisition and disposal of assets and facilities,
operation and construction of plant facilities, recovery of purchased-power
costs, stranded costs, decommissioning costs, and present or prospective
wholesale and retail competition (including but not limited to retail wheeling
and transmission costs).

The business and profitability of NU and its subsidiaries are also
influenced by economic and geographic factors including political and economic
risks, changes in environmental and safety laws and policies, weather
conditions (including natural disasters), population growth rates and
demographic patterns, competition for retail and wholesale customers, pricing
and transportation of commodities, market demand for energy from plants or
facilities, changes in tax rates or policies or in rates of inflation, changes
in project costs, unanticipated changes in certain expenses and capital
expenditures, capital market conditions, competition for new energy development
opportunities, and legal and administrative proceedings (whether civil or
criminal) and settlements.

All such factors are difficult to predict, contain uncertainties which may
materially affect actual results and are beyond the control of NU or its
subsidiaries.

RATES AND ELECTRIC INDUSTRY RESTRUCTURING

GENERAL

NU's electric utility subsidiaries, CL&P, WMECO and PSNH, have undergone
fundamental changes in their business operations as a result of the
restructuring of the electric industry in their respective jurisdictions. The
year 2002 represented the final year of a four-year process of selling most of
the regulated generating assets of the NU system. Most notably, CL&P and WMECO
have divested all of their generation assets and are acting solely as
transmission and distribution companies, while divestiture of PSNH's fossil and
hydro generation has been postponed by state statute until at least 2004. All
operating company customers are now able to choose their energy suppliers, with
the electric utility companies furnishing "standard offer," "default" or
"transition" service to those customers who do not choose a competitive
supplier. Critical to this restructuring is the companies' ability to recover
their stranded costs. Stranded costs are expenditures incurred, or commitments
for future expenditures made, on behalf of customers with the expectation such
expenditures would continue to be recoverable in the future through rates.

As discussed more fully below, CL&P and WMECO have received regulatory
orders allowing each to recover all or substantially all of their prudently
incurred stranded costs. Under an April 2000 settlement agreement among NU,
PSNH and the State of New Hampshire (Restructuring Settlement), which has been
approved by the NHPUC, PSNH is entitled to recover all of its remaining
prudently incurred stranded costs. All three companies have recovered
significant portions of their stranded costs through the issuance of rate
reduction bonds (RRBs) and rate reduction certificates (RRCs) (securitization)
and are recovering these costs through rates.

Electric utility restructuring in Connecticut, New Hampshire and
Massachusetts provides for a transition period of several years following the
opening of each state's electric market to customer choice. During that
interim period, the energy delivery companies, including CL&P, WMECO and PSNH,
are responsible for arranging for the supply of power to customers who do not
select alternative energy suppliers. Management recognizes that in other
states electric companies have been negatively affected by the inability to
recover supply costs on a timely basis. However, the Company believes that
current statutes and regulatory policy in the three states in which NU
subsidiaries operate electric delivery businesses will permit timely recovery.

CL&P has signed fixed-price contracts with three suppliers who together
will serve all of CL&P's standard offer requirements through 2003. One of
these suppliers is the company's competitive marketing affiliate, Select
Energy, and the other two suppliers, NRG Power Marketing, Inc. (NRG-PM) and
Duke Energy Trading and Marketing Northeast, LLC (Duke Energy), are
unaffiliated with CL&P. CL&P is fully recovering all of the payments it is
making to those suppliers and has limited financial guarantees from each
unaffiliated supplier to shield CL&P from risk in the event any of the
suppliers encounters financial difficulties. See "Connecticut Rates and
Restructuring."

After a competitive solicitation, WMECO signed supply agreements for
standard offer service in November 2002 for the 2003 calendar year. Select
Energy was the winning bidder. The DTE approved the standard offer contract
and approved rates, which will allow WMECO to recover fully its standard offer
service supply costs. In addition, in Massachusetts there is a second type of
service supplied by electric distribution companies called default service.
Default service is provided to those customers not on competitive supply that
are not eligible for standard offer service. A single unaffiliated supplier
won the competitive solicitation to provide default service to WMECO for the
period January 1, 2003, through June 30, 2003. Default service supply for the
second half of the year will be solicited in the spring of 2003.

Retail competition for all PSNH customers began on May 1, 2001. PSNH
provides transition service energy to its retail customers from its owned
generating plants, from purchase power obligations and from market purchases.
See "New Hampshire Rates and Restructuring."

CONNECTICUT RATES AND RESTRUCTURING

Since retail competition began in Connecticut in 2000, an extremely small
number of CL&P customers (about 20,000 out of 1.2 million CL&P customers) have
opted to choose their retail supplier. Through December 2003, 50 percent of
CL&P's standard offer supply requirements will be purchased from Select Energy,
45 percent from NRG-PM, and 5 percent from Duke Energy.

In November 2001, at the request of NRG-PM, CL&P filed a request with the
DPUC to raise the standard offer rate from an average of $0.0495 per kilowatt-
hour (kWh) to $0.0595 per kWh, which would help promote competition in advance
of the January 1, 2004 termination of the standard offer period and provide
financial relief to standard offer suppliers. In December 2001, the DPUC
rejected CL&P's request, but opened two new dockets to examine the absence of
effective retail competition in Connecticut and the financial condition of the
suppliers. The first docket culminated in a joint study report issued in a
DPUC decision on February 15, 2002, which provided the DPUC's and the
Connecticut Office of Consumer Counsel's (OCC) findings on how to best
structure default service and other issues related to electric industry
restructuring. In the second docket, the DPUC concluded on June 17, 2002,
"that there does not exist either a legal or factual basis upon which to find
probable cause to commence further proceedings regarding the standard offer
generation service charge."

On July 18, 2002, CL&P, concerned with NRG-PM's financial viability, filed
a new proposal with the DPUC to maintain current total rates, but to shift
$0.007 per kWh from being used to accelerate the amortization of stranded costs
to instead provide additional payments to NRG-PM and Select Energy. The
payments to NRG-PM would help ensure that there are adequate available
generating units to maintain electric reliability in the near term in southwest
Connecticut. On July 26, 2002, the DPUC denied the request, indicating that it
expects CL&P to enforce the current standard offer contracts. Subsequent to
July 26, NRG-PM announced that it entered an agreement with ISO-New England to
keep three units at its Devon, Connecticut station in service. Under the terms
of the agreement, NRG-PM will be provided compensation to continue operating
the units until the end of the agreement on September 30, 2003. These units
will accordingly remain available until ISO-New England determines that they
are no longer needed for reliability. Based on this information and the fact
that there were no further issues brought to the DPUC's attention, the docket
was closed on August 29, 2002.

In light of recent downgrades of NRG Energy, Inc., NRG-PM's parent company
(NRG), by all three major rating companies to below minimum investment grade
levels, NU continues to evaluate NRG-PM's financial health. If CL&P is
required to seek an alternate source of supply, CL&P would pursue recovery of
any additional costs from NRG-PM pursuant to the contract. In the event NRG-PM
did not pay such costs, CL&P may be required to seek DPUC approval to flow
through any such costs, including any increased payments to its other standard
offer service suppliers, to its customers. On February 21, 2003, Fitch Ratings
lowered its ratings outlook on CL&P to negative as a result of its concern over
timely recovery of higher purchased-power costs if NRG-PM were to default on
its CL&P standard offer obligations. Management believes that recovery of
these costs would be consistent with the provisions of Connecticut's electric
utility restructuring legislation and all other ratings outlooks on CL&P remain
stable. In view of the deterioration of NRG's financial condition, CL&P
exercised its contractual right to withhold past due congestion costs from the
July 2002 standard offer payment to NRG-PM pending the outcome of litigation
between the parties concerning contractual liability for congestion costs
ongoing in the United States District Court for the District of Connecticut.
All subsequent standard offer payments to NRG-PM have similarly been reduced to
reflect continued withholding of congestion costs.

On December 20, 2002, FERC issued an order in connection with a dispute
between CL&P and NRG concerning the provision of station service to Connecticut
generating plants purchased from CL&P by NRG affiliates in December 1999. CL&P
filed a complaint at FERC seeking interpretation of a FERC-filed
interconnection agreement in which NRG agreed to pay CL&P's applicable retail
rates for station service power (if procured from CL&P) and delivery of such
power (whether procured from CL&P or a third party supplier). FERC further
affirmed the language in its Order 888 concerning state jurisdiction over the
delivery of power to end users, even in the absence of distribution facilities,
and the state's authority to impose certain charges on end users, such as those
associated with stranded cost recovery. CL&P has made a demand upon NRG for
payment of $13.3 million in station service charges through January 2003 and is
preparing to take any steps necessary to collect the unpaid balance. For
further information relating to NRG-related litigation, see Item 3, "Legal
Proceedings."

On September 27, 2001, CL&P filed its application with the DPUC for
approval of the disposition of the proceeds from the sale of the Millstone
nuclear units (Millstone) to Dominion Nuclear Connecticut, Inc. (DNCI). This
application described and requested DPUC approval for CL&P's treatment of its
share of the proceeds from the sale, including CL&P's recovery of approximately
$75 million of capital additions at Millstone during the approximately four
years prior to sale. On February 27, 2003, the DPUC issued a final decision in
this docket requiring a $26.9 million increase in the amount of proceeds CL&P
had proposed to be applied to stranded costs.

On May 17, 2002, CL&P filed an application with the DPUC for approval of
the auction results in the sale of Seabrook to a subsidiary of FPL. A final
decision approving the sale was issued in September 2002 and the sale closed on
November 1, 2002.

On November 23, 2001, CL&P petitioned the DPUC to adjust its stranded
costs to account for the announced sale of the Vermont Yankee nuclear unit (VY)
to an unaffiliated company. On June 12, 2002, the DPUC issued a final decision
that found CL&P's request was beneficial to ratepayers and allowed for stranded
cost recovery through the Competitive Transition Assessment.

CL&P was unable to negotiate buy down or buy out arrangements with 15
independent power producers (IPPs) that produce approximately 345 megawatts
(MW). CL&P is selling the output from these projects into the market and will,
pursuant to DPUC authority, continue to collect the difference between the
contract prices and the market revenues as stranded costs. These stranded
costs cannot be securitized.

As of December 31, 2002, CL&P had fully recovered all stranded costs
except those to be recovered through RRBs, ongoing IPP costs, costs associated
with the ongoing decommissioning of the Maine Yankee, Connecticut Yankee and
Yankee Rowe nuclear units and annual decontamination and decommissioning costs
payable under federal law.

In December 2000, the Attorney General of the State of Connecticut (AG)
and the OCC each filed a petition requesting that the DPUC initiate a
proceeding to consider whether an interim decrease in the rates charged by CL&P
is required. The applicable statute requires the DPUC to commence a special
public hearing on the need for an interim rate decrease when, among other
reasons, a public service company has for six consecutive months earned a
return on equity (ROE) that exceeds the return authorized by the DPUC by at
least one percentage point. In June 2001, the DPUC concluded its investigation
on potential overearnings by CL&P and ordered a $21.1 million reduction in
CL&P's electric transmission and distribution rates and an equal increase in
CL&P's generation services charge. The DPUC also implemented an earnings
sharing mechanism under which earnings in excess of a 10.3 percent authorized
ROE are shared equally by shareholders and ratepayers. In September 2001, the
DPUC ordered a $21.3 million annual reduction in CL&P's System Benefits Charge
as a result of a sharp reduction in decommissioning collections and an equal
increase in the competitive transition assessment, effective March 1, 2002.
The net result of the decisions noted above was to reduce CL&P's pretax
earnings by $21.1 million beginning June 20, 2001, and accelerate CL&P's
recovery of stranded costs in 2002 and 2003. For the twelve-month period ended
June 30, 2002, CL&P overearned its allowed 10.3 percent ROE by .23 percent,
resulting in an approximate $1 million reduction in stranded costs.

In July 2001, the DPUC authorized CL&P to assess a charge of approximately
$0.002 per kWh through December 2003 to collect approximately $98.5 million of
deferred fuel costs, including carrying costs, primarily incurred prior to
January 1, 2000.

In December 2001, the AG filed a petition seeking an investigation into
CL&P's potential overearnings. On February 6, 2002, the DPUC rejected the
petition.

In mid-2003, CL&P expects to file a distribution rate case with the DPUC
for rates that would be effective January 2004. Also, in the second half of
2003, CL&P will need to secure bids for power supply contracts to meet the
needs of its customers for 2004. Management has not yet identified what level
of rates it will request in 2004.

On December 2, 2002, the Connecticut Siting Council (CSC) resumed hearings
on CL&P's proposed $135 million project to build a new 345,000-volt
transmission line between Bethel and Norwalk, Connecticut. A final decision on
the project is expected by mid-April 2003. CL&P expects to file with the CSC
later in 2003 to build a 65-mile 345,000-volt line between Norwalk and
Middletown, Connecticut. The two projects are needed to resolve a host of
growth-related problems in the import-dependent Norwalk-Stamford and southwest
Connecticut load pockets. For additional information on CL&P's proposed
expansion of its transmission system, see "Construction and Capital Improvement
Plan."

On March 1, 2003, ISO-New England implemented a new Standard Market Design
(SMD). As part of this effort, locational marginal pricing (LMP) will be
utilized to assign value and causation to transmission congestion.
Transmission congestion costs will be assigned to the load zone in which the
congestion occurs. Those costs are now spread across virtually all New England
electric customers. In addition, the implementation of SMD will impact
wholesale energy contracts with respect to the energy delivery points contained
in these contracts. See "Competitive System Businesses-Wholesale and Retail
Marketing."

Connecticut has been designated a single load zone. Due to transmission
constraints and inadequate generation Connecticut could experience significant
additional congestion costs under SMD. The New England ISO has estimated that
the costs of transmission congestion for 2003 in New England under SMD will
range between $50 million and $300 million. ISO-New England estimates that the
majority of this congestion and its costs will be in Connecticut, where
approximately 80 percent of those costs are expected to be paid by CL&P
beginning on March 1, 2003. CL&P believes that under the terms of its standard
offer service contracts with its standard offer suppliers, these costs are its
responsibility. The contracts with the standard offer suppliers expire on
December 31, 2003. In addition, the determination of the energy delivery
points associated with the standard offer service contracts under SMD could
also produce significant costs for CL&P that management cannot determine at
this time.

Another factor affecting the level of congestion costs is the designation
of certain generating units by ISO-New England as units needed for system
reliability. Some of the companies owning these units have applied to the FERC
for "reliability must run" (RMR) treatment. RMR treatment allows these units
to receive cost of service based payments that recognize their reliability
value. Prior to March 1, 2003, all RMR costs were spread across New England
with all utilities being billed by ISO-New England based upon their share of
New England's load. NU's regulated electric utilities were responsible for
approximately 25 percent of these costs. Effective with the March 1, 2003
implementation of SMD by ISO-New England, RMR costs will be allocated to the
load zone in which the RMR unit is located. At present, the only load zone
that will experience a cost increase in which a NU regulated electric company
operates is Connecticut. With respect to the Connecticut load zone, there are
two generating units operating under a RMR contract with an additional contract
pending before FERC. These contracts are for one year terms, and one contract
contains an extension option. On a combined basis, these two RMR contracts
will result in an annual cost of approximately $45 million to the Connecticut
load zone. CL&P accounts for approximately 80 percent of the Connecticut load
zone, and would be responsible for approximately $36 million of this cost. In
the near future, it is probable that there will be significant new requests for
RMR treatment in Connecticut which, if approved by FERC, would add significant
additional costs to the total cost of energy in Connecticut. However,
generating units operating under RMR contracts could potentially mitigate the
overall level of congestion costs.

These unavoidable congestion and RMR costs are part of the prudent cost of
providing regulated electric service in Connecticut. A DPUC regulatory
proceeding is expected to be initiated soon to determine the appropriate
recovery mechanism for these costs. If these costs are incurred before the
final recovery mechanism is established by the DPUC, CL&P expects to record a
regulatory asset for those costs incurred.

In response to the regional transmission expansion plan prepared by ISO-
New England, CL&P has advised ISO-New England that it will seek to obtain
approximately 60 to 80 MW of peaking capacity to be located in southwest
Connecticut for the summer of 2003. CL&P is also seeking a longer-term
solution to the peaking capacity needs of southwest Connecticut.

For further information on SMD and transmission-related issues, see
"Regulated Electric Operations - Transmission Access and FERC Regulatory
Changes."

In July 2001, Yankee Gas filed an application to increase customers' rates
by approximately $29.2 million, or an average of 7.64 percent. Yankee Gas
requested the increase to fund system reliability projects and a proposed
expansion of its distribution system. On January 30, 2002, the DPUC issued a
final decision in the case, ordering a $4.0 million reduction in Yankee Gas
rates, which became effective April 1, 2002. The DPUC authorized Yankee Gas'
distribution expansion plan, subject to annual reviews, and approved, with some
conditions, its capital investment ratemaking recovery mechanism
(Infrastructure Expansion Rate Mechanism or IERM). The final decision also
authorized an 11 percent ROE for Yankee Gas and a sharing formula for earnings
above that level from 2002 through 2005. On August 1, 2002, Yankee Gas filed
testimony and exhibits with the DPUC reflecting its proposal for IERM projects
to be placed in-service during the period July 1, 2002 through December 31,
2003 and that meet certain financial criteria outlined by the DPUC. Yankee Gas
is currently proposing no IERM charge for 2003 and that any over-collection for
2003 be carried forward to the 2004 IERM period. A decision in this docket is
expected in the first quarter of 2003.

On December 4, 2002, the DPUC opened a docket to review Yankee Gas
earnings in excess of its authorized ROE. Hearings are scheduled for March
2003 and a decision is expected in May 2003.

A schedule has been set in Yankee Gas' proceeding before the DPUC to
obtain rate approval to build a two billion cubic foot liquefied natural gas
production and storage facility in Waterbury, Connecticut. The rate schedule
includes hearings in March 2003 with a final decision in the second quarter
of 2003. If approved, construction of the facility, which could cost
approximately $60 million, could begin in the fourth quarter of 2003.

MASSACHUSETTS RATES AND RESTRUCTURING

Massachusetts enacted comprehensive electric utility industry
restructuring in November 1997. That legislation required each electric
company to submit a restructuring plan and to reduce its rates by 15 percent
adjusted for inflation by September 1999. The 15 percent rate reduction is a
rate cap for standard offer service customers that extends until February 2005,
the end of the restructuring transition period. The restructuring plan
approved by the DTE in 1999 allows WMECO's customers to choose their energy
suppliers and WMECO to recover stranded costs. Two parties have appealed the
DTE's decision on WMECO's restructuring plan to the Massachusetts Supreme
Judicial Court. One appeal has been dismissed without prejudice by the Supreme
Judicial Court because the appellant has failed to prosecute the appeal. There
has been no significant action in the other appeal since it was filed in
December 1999.

In December 2002, the DTE approved a 1.8 percent increase in WMECO's
overall bills, primarily reflecting slightly increased standard offer service
and default service costs as well as other inflationary factors. See "Rates
and Electric Industry Restructuring-General" information relating to WMECO's
standard offer service and default service supply.

During the first quarter of 2000, WMECO filed its first annual stranded
cost reconciliation filing covering the period March 1, 1998 through
December 31, 1999. The DTE issued its decision on this filing on June 7, 2002.
The decision included, among other things, a ruling that investment tax credits
associated with generation assets that have been divested should not be used to
reduce rates. As a result, WMECO recognized approximately $13 million in tax
credits in the second quarter of 2002.

On March 30, 2001, WMECO filed its second annual stranded cost
reconciliation with the DTE for calendar year 2000. On March 29, 2002, WMECO
filed its 2001 annual transition cost reconciliation with the DTE for calendar
year 2001. Included in that filing were the sales proceeds from WMECO's
interest in Millstone, the impact of securitization and approximately a $13
million benefit to ratepayers from WMECO's performance-based ratemaking
process. On July 8, 2002, WMECO submitted a compliance filing in accordance
with the DTE's June 7, 2002 order in WMECO's 1998-1999 stranded cost
reconciliation proceedings. This filing reflected changes to the 1998 through
1999 reconciliations as agreed to by WMECO and/or ordered by the DTE and also
included a revised transition charge filing for 2000 and 2001 to reflect the
June 7, 2002 order. Subsequent to the July 8, 2002 filing, WMECO and the
office of the Massachusetts Attorney General reached a settlement covering all
transition charge issues for the 1998 through 2001 reconciliations. This
settlement was approved by the DTE on December 27, 2002. The after-tax impact
of this settlement increased 2002 earnings by approximately $5.7 million.

NEW HAMPSHIRE RATES AND RESTRUCTURING

In July 2001, the NHPUC opened a docket to review the fuel and purchased-
power adjustment clause (FPPAC) costs incurred by PSNH between August 2, 1999
and April 30, 2001, in order to determine the amount of deferred FPPAC costs
PSNH should be entitled to recover through the stranded cost recovery charge.
Hearings at the NHPUC concluded in June 2002, and PSNH filed its closing brief
with the NHPUC in July 2002. Under the Restructuring Settlement, FPPAC
deferrals are recovered as Part 3 stranded costs through the stranded cost
recovery charge. On December 31, 2002, the NHPUC approved the recovery of all
but $17,000 of PSNH's request to recover approximately $200 million.

On June 28, 2002, PSNH made its first stranded cost recovery charge
reconciliation filing with the NHPUC for the period May 1, 2001 through
December 31, 2001. This filing reconciles stranded cost revenues against
actual stranded costs with any difference being refunded to customers or
deferred for future recovery. Included in the stranded cost charges are the
net generation revenues and generation cost charges for the filing period.
Where generation revenues exceed costs, additional stranded costs were
amortized; where generation costs exceed revenues, costs were deferred for
future recovery. The generation costs included in this filing are subject to a
prudence review by the NHPUC. PSNH entered into a settlement with the NHPUC
staff and the Office of Consumer Advocate recommending that the NHPUC find that
all of PSNH's generation costs were prudently incurred. The NHPUC held a
hearing on January 8, 2003 and a decision was issued on February 14, 2003,
effectively adopting the terms of the settlement.

On September 12, 2002, the NHPUC issued a final decision approving the
auction results in the sale of Seabrook to FPL. Under the terms of the
Settlement Agreement, PSNH non-securitized stranded costs will be reduced by
the net proceeds from NAEC's ownership interest in Seabrook. To date, NAEC has
credited PSNH with approximately $179 million through the contracts under which
PSNH was obligated to purchase NAEC's ownership of the output and capacity of
Seabrook (Seabrook Power Contracts). These credits are being used to offset
Part 3 stranded costs, which are nonsecuritized regulatory assets which must be
recovered by a recovery end date determined in accordance with the
Restructuring Settlement or be written off.

In 2002, NAEC supplied PSNH with approximately 2.74 billion kWh. PSNH
fossil and hydroelectric units generated 3.52 billion kWh and PSNH purchased
another 4.67 billion kWh, some under long-term rate orders with small power
producers based in New Hampshire. Of that total 10.93 billion kWh, 7.91
billion kWh were used to service PSNH's retail electric customers and the
remaining 3.02 billion kWh were sold in the wholesale market. As a result of
NAEC's sale of Seabrook, PSNH expects its wholesale electric sales to decline
significantly in 2003. However, PSNH expects to generate most of the
electricity it needs to serve transition service for its customers from its own
generating plants or purchased-power obligations and to purchase the remainder
in the wholesale market.

On December 5, 2002, PSNH announced an agreement to acquire the franchise
and electric system of Connecticut Valley Electric Company, Inc. (CVEC), a
subsidiary of Central Vermont Public Service Corporation (CVPS) that serves
approximately 10,000 customers in western New Hampshire. Under the agreement,
PSNH will pay CVPS approximately $9 million for its assets and an additional
$21 million to terminate a wholesale power contract between CVPS and CVEC.
Customers of CVEC will become customers of PSNH, whose residential rates are
now approximately 20 percent lower than those of CVEC. PSNH will be allowed to
recover the $21 million payment with a return consistent with Part 3 stranded
cost treatment under the Restructuring Settlement. Part 3 stranded costs are
nonsecuritized regulatory assets which must be recovered by a recovery end date
determined in accordance with the Restructuring Settlement or be written off.
The sale agreement is supported by the New Hampshire Governor's Office, NHPUC
staff, the state Office of Consumer Advocate, the City of Claremont and New
Hampshire Legal Assistance. The FERC and the NHPUC must approve the sale,
which is expected to become effective on January 1, 2004.

On February 1, 2003, in accordance with New Hampshire law, PSNH raised the
transition service rate for residential and small commercial customers to 4.60
cents per kWh from 4.40 cents per kWh. On the same date, pursuant to New
Hampshire law and order of the NHPUC, PSNH also raised its transition supply
rate for large commercial and industrial customers to 4.67 cents per kWh from
4.40 cents per kWh. PSNH expects those rates to be adequate to recover its
generation and power purchased-power costs, including the recovery of carrying
costs on PSNH's generation investment. If recoveries exceed PSNH's costs,
those overrecoveries will be credited against PSNH's Part 3 stranded cost
balance. If actual costs exceed those recoveries, PSNH will defer those costs
for future recovery from customers through its Stranded Cost Recovery Charge.

PSNH's delivery rates are fixed until February 1, 2004. Under the
Restructuring Settlement, PSNH must file a rate case by December 31, 2003 for
the purpose of commencing a review of PSNH's delivery rates.

COMPETITIVE SYSTEM BUSINESSES

NU is engaged in a variety of competitive businesses which are primarily
involved in the marketing of electricity and natural gas in the Northeast
United States and the provision of energy related services to large government,
industrial, commercial and institutional facilities. NU's competitive
businesses operate four major business units: wholesale marketing, retail
marketing, energy trading and energy products and services.

NUEI is the lead competitive energy business within NU. NUEI is a wholly
owned subsidiary of NU and acts as the holding company for certain of NU's
competitive energy subsidiaries. These subsidiaries include SESI, a provider
of energy management, demand-side management and related consulting services
for commercial, industrial and institutional customers and electric utility
companies; NGC, a corporation that acquires and manages generation facilities;
NGS, a corporation that maintains and services fossil and hydroelectric
facilities, and Select Energy, a corporation engaged in the trading, marketing,
transportation, storage and sale of energy commodities, at wholesale and
retail, in designated geographical areas. NUEI and its integrated competitive
energy business affiliates had aggregate revenues of approximately $1.7 billion
in 2002 as compared to approximately $2.1 billion in 2001 and lost $54.1
million in 2002, as compared to earnings of approximately $5 million (before
extraordinary items) in 2001.

NGC is the competitive generating subsidiary of NU and a major provider of
pumped storage and conventional hydroelectric power in the northeastern United
States. NGC owns and operates a portfolio of approximately 1,291 MW of
generating assets in New England. The generation facilities owned by NGC were
acquired at auction from CL&P and WMECO. NGC's portfolio consists of seven
hydro facilities along the Housatonic River System (121 MW), the three
facilities comprising the Eastern Connecticut System, including one gas turbine
(28 MW), all located in Connecticut, and the Northfield Mountain pumped storage
station (1,080 MW) and the Cabot and Turners Falls No. 1 hydroelectric stations
(62 MW) located in Massachusetts. NGC sells all its generation output to
Select Energy, which in turn markets it to customers. Select Energy's
performance under its contract with NGC is guaranteed by NU through 2005.

Select Energy also buys and manages the entire generation output of HWP,
which consists of approximately 147 MW generated at the Mt. Tom station in
Holyoke, Massachusetts under a renewable contract.

NUEI's deregulated operations are a core business of NU. NGC's assets and
Mt. Tom perform functions that are critical to NUEI's wholesale and retail
businesses by providing Select Energy with access to electric generation within
New England and thus reducing its exposure to energy price fluctuations.

WHOLESALE AND RETAIL MARKETING

NUEI, through Select Energy, sells multiple energy products including
electricity and natural gas to wholesale and retail customers in the
northeastern United States. Select Energy procures and delivers energy and
capacity required to serve its electric and gas customers. Select Energy is
one of the largest wholesale and retail electric energy marketers in New
England as measured by megawatt load. In order to support and complement its
growing wholesale and retail business, Select Energy contracted in December of
1999 with NGC to purchase and market all of NGC's 1,291 MW for a 6-year period.
In addition, during 2002 Select Energy purchased approximately 147 MW of coal
generating plant output from its affiliate, HWP, and more than 2,800 MW of
electrical supply from various New England generating facilities on a long-term
basis to meet its New England load obligations. Select Energy may also utilize
generation failure insurance, options and energy futures to hedge its supply
requirements. NUEI also offers energy management consulting and construction
services through its affiliate, SESI, discussed more fully below.

In 2002, Select Energy reported revenues of $1.5 billion and had retail
and wholesale marketing sales of approximately 26,000 gigawatt-hours (GWh)
of electricity and 52 billion cubic feet (BcF) of natural gas to approximately
19,000 customers. During 2001, Select Energy reported revenues of $1.9 billion
and had retail and wholesale marketing sales of approximately 25,000 GWh of
electricity and 32 BcF of natural gas to approximately 18,000 customers.
Twelve months of operations from Select Energy New York, Inc. are reflected
in 2002 versus one month of operations in 2001.

There are a number of large energy companies bidding for business in the
restructured Northeast market. During 2002, the breadth and depth of the
market for energy trading and marketing products in Select Energy's market was
adversely affected by the withdrawal or financial weakening of a number of
companies who have historically done significant amounts of business with
Select Energy. In general, the market for such products has become shorter
term and less liquid in nature and participants are more often unable to meet
Select Energy's credit standards without additional credit support. Select
Energy's business has been adversely affected by these factors and they could
continue to adversely affect Select Energy's results in 2003.

Changes are occurring in the administration of transmission systems in
territories in which Select Energy does business. Regional transmission
organizations (RTO) are being contemplated, and other changes in market design
are occurring within transmission regions. For example, SMD was implemented in
New England on March 1, 2003 and will create challenges and opportunities for
Select Energy. The impact of SMD on the wholesale marketing business could be
significant. The determination of the energy delivery points in many wholesale
marketing contracts and the location of sources of supply could have a
significant effect on Select Energy. As more information regarding the timing
and impact of SMD becomes available, there could be additional adverse effects
that management cannot determine at this time. For more information on the
proposed changes, see "Regulated Electric Operations-Transmission Access and
FERC Regulatory Charges" and "Rates and Electric Industry Restructuring-
Connecticut Rates and Restructuring."

Wholesale Marketing. Select Energy's goal is to be the regional leader in
providing electric service to the Northeastern competitive markets. In 2002,
Select Energy supplied more than 5,600 MW of standard offer and default service
load in the region, making it one of the largest providers of standard offer
service in the Northeast. Revenues from these services comprised in the
aggregate approximately 70 percent of Select Energy's 2002 revenues.

On January 1, 2000, Select Energy began serving one half of CL&P's
standard offer load for a four-year period at fixed prices. This equates to
approximately 2,000 MW annually for each of the four contract years.
Approximately 38 percent of Select Energy's 2002 competitive energy revenues
came from CL&P's supply contract. Although Select Energy lost an estimated $47
million on this arrangement last year, in 2003 Select Energy expects improved
results due to more favorable purchase contracts. A return to normal river
conditions at NGC's hydroelectric plants, in contrast to the near-drought
conditions New England experienced during much of 2002, is also expected to
improve results. In 2003, Select Energy will also focus on improved management
of power supply associated with its full requirements contracts. To meet its
profit target in 2003, Select Energy must also secure a significant amount of
new business at acceptable margins. Management expects Select Energy's
wholesale marketing business will be profitable in 2003.

In addition to its contract with CL&P, Select is serving 2,100 MW of New
Jersey's basic generation supply (BGS) load through July 31, 2003, 1,200 MW of
BGS load from August 1, 2003 through May 31, 2004, and 500 MW of BGS load from
June 1, 2004 through May 31, 2006. In addition, on January 1, 2003, Select
Energy began serving the 500 MW standard offer load of its affiliate, WMECO,
for a 12 month period. There are also approximately 300 MW of fixed price
market-based wholesale contracts throughout New England that were previously
supplied by WMECO and CL&P that are now the responsibility of Select Energy.

Retail Marketing. Select Energy is licensed to provide retail electric
supply in Connecticut, Delaware, Maryland, New Jersey, Maine, Pennsylvania,
Virginia, New York, Massachusetts, Rhode Island and New Hampshire. Within
these states, Select Energy is currently registered with approximately 36
electric distribution companies and 51 gas distribution companies to provide
retail services.

As of December 31, 2002, Select Energy had contracts with retail electric
customers in states throughout the Northeast with over 900 MW of peak load at
13,000 locations, including predominately commercial, industrial, institutional
and governmental accounts. As over 600 MW of this load is in New England,
Select Energy is among the largest competitive retail suppliers of electricity
in New England as measured by megawatt load. No single retail electric
customer accounts for more than ten percent of Select Energy's expected retail
revenues.

Select Energy's retail marketing business had far weaker performance in
2002, when it lost approximately $28 million, than in 2001, when it lost
approximately $8 million, prior to a $22.4 million accounting change. The
weaker performance is attributed to unusually warm weather in the first quarter
of 2002, which particularly affected retail gas sales, and to unfavorable
retail supply contracts, many of which were terminated by the end of 2002.
Select Energy expects its retail marketing business to break even in 2003. In
order to achieve this goal, Select Energy plans to size the retail organization
to better fit the expected level of business and to better manage volumetric
risk, particularly in the winter heating months. This goal also assumes that
Select Energy will be successful in securing and managing a significant amount
of new business at acceptable margins.

During 2002, Select Energy's competitive natural gas business, primarily
retail in nature, produced revenues of approximately $247 million, an increase
from 2001 revenues of approximately $200 million. This increase was due to
changes in gas prices and increased volume. As of December 31, 2002, Select
Energy provided over 39 BcF of natural gas to approximately 6,000 retail gas
customers, primarily located in Connecticut, Massachusetts and Pennsylvania.
These contracts generally have one-year terms and include primarily commercial,
institutional, industrial and governmental accounts. No single retail gas
customer accounts for more than ten percent of Select Energy's expected retail
gas revenues. In 2002, Select Energy's retail gas revenues were approximately
$180 million representing approximately a 13 percent increase compared to 2001.

ENERGY TRADING

Select Energy trades a number of energy-related products in the Eastern
United States, primarily for price discovery and risk management purposes. The
trading segment of the business can buy, sell, hold or trade any energy
futures, options, third party or counter-party positions for energy
commodities. The energy trading business also includes entering into
associated risk management products, including derivatives, as part of managing
the exposure and risk of energy commodity trading.

In early 2002, after concluding that a mild winter and high natural gas
inventories would result in falling prices, Select Energy established a
significant "short" position in natural gas. Despite contrary fundamentals,
natural gas prices rose significantly in March and April 2002, resulting, after
break-even performance for the balance of 2002, in an after-tax loss of
approximately $24 million for the year compared with earnings of $19 million in
2001. After April 2002, senior NU management decided to reduce significantly
its speculative trading activities and the capital at risk in the trading area
to a daily average of approximately $0.4 million from up to $6 million in early
2002 and is continuing to evaluate the scope and size of Select Energy's
trading function. Management projects that its trading business will be
modestly profitable in 2003.

NU provides credit assurance as the credit support provider in Select
Energy's contracts, in the form of guarantees and letters of credit for the
financial performance obligations of certain of its competitive energy
subsidiaries. NU currently has authorization from the SEC to provide up to
$500 million of guarantees through September 30, 2003, and has applied for
authority to increase this amount to $750 million and extend the authorization
period through September 30, 2005. As of December 31, 2002, NU had provided
approximately $183 million of such guarantees and $7 million of letters of
credit. In addition, NU's "aggregate investment" in Select Energy and its
other energy service companies (but not including NGC, HWP or SESI) (which is
inclusive of most such credit assurances) is limited by SEC rule to 15 percent
of NU's most recent quarterly consolidated capitalization. NU has applied
for authority to exempt its investments in such energy services companies from
this limitation.

ELECTRIC GENERATION

NGC, NU's competitive electric generating affiliate, owns approximately
1,291 MW of hydroelectric and pumped storage generating assets in Connecticut
and Massachusetts. NGC sells all of its energy and capacity to its affiliate,
Select Energy. Select Energy's performance under its contract with NGC is
guaranteed by NU. Select also buys and manages the entire generation output of
approximately 147 MW from HWP's Mt. Tom generating plant under a renewable
contract. Select Energy uses the NGC and Mt. Tom generation to furnish a
portion of the resources it uses to meet supply commitments to its marketing
customers.

NGC's contract with Select Energy extends through December 2005. About 85
percent of NGC's revenues from this contract (including all of the revenues
from Northfield Mountain) are in the form of predetermined, fixed monthly
payments based on the capacity of specified facilities. The remaining 15
percent of the revenues are in the form of monthly payments at predetermined
rates per unit of actual energy output. NGC currently derives approximately 80
percent of its revenues from Northfield Mountain.

This contract provides NGC with a stable stream of revenues at prices that
are currently higher than average wholesale electricity prices in the markets
served by NGC's facilities. If NGC's agreement with Select Energy were to
terminate at the end of its term in 2005, NGC may, depending upon market
conditions, pursue similar contracts or choose to optimize the value of its
assets in another manner. NGC plans to continue to evaluate growth
opportunities in the northeastern United States; however, its ability to pursue
such opportunities is limited by capital and regulatory constraints.

COMPETITIVE ENERGY SUBSIDIARIES' MARKET AND OTHER RISKS

NU's competitive energy subsidiaries, primarily Select Energy, are exposed
to certain market and other risks inherent in their business activities.

A significant portion of their retail and wholesale marketing business is
providing full requirements service to customers, primarily regulated
distribution companies. The "full requirements" obligation commits these
companies to supply the total energy requirement for the customers' load at all
times. An important component of their risk management strategy is to manage
the volume and price risks of their full requirements contracts. These risks
include unexpected fluctuations in both supply and demand due to numerous
factors which are not within their control, such as weather, plant
availability, exposure to transmission congestion costs and price volatility.
Select Energy's 2002 results were negatively impacted when contracted supply
exceeded demand in the warmer than expected winter months and additional supply
had to be acquired during summer months at higher than expected prices.

In serving its marketing customers, Select Energy utilizes derivative
financial and commodity instruments, including futures and forward contracts,
to manage the risk of fluctuating market prices. At December 31, 2002, Select
Energy had net hedging derivative assets of $20.8 million, as compared to net
derivative liabilities of $55.5 million at December 31, 2001. Generally, such
derivatives impact earnings over the life of the contracts which they hedge,
but in certain cases the impact is accelerated and affects earnings
immediately.

In addition, Select Energy's trading business is exposed to certain risks.
Select Energy trades in both financial derivative (non-physical delivery) and
physical delivery transactions for electricity, natural gas and oil in which it
attempts to profit from short-term changes in market prices. Energy trading
contracts of both types are recorded at fair value, changes in which impact
Select Energy's earnings in the period of change. Such fair values are derived
from a number of sources, including market quotes of exchange-traded
commodities, prices provided by external sources in over-the-counter
transactions and, in rare cases, values derived from pricing models.

Select Energy's trading portfolio had a net positive $41 million fair
value at December 31, 2002, as compared to a net positive $56.4 million fair
value at December 31, 2001. Approximately 90 percent of the $41 million was
priced from external sources, while the balance of approximately $4.5 million
was from pricing models, and only a nominal amount was based on exchange
quotes. Of the $41 million of net fair value in the trading portfolio at
December 31, 2002, $1.6 million will mature in 2003, $24.8 million in 2004-2007
and $14.6 million after 2007. Generally, valuations of short-term contracts
derived from quotes or other external sources are more reliable while
valuations based on trading models are less certain.

Accordingly, there is a risk that the trading portfolio will not be
realized in the amount recorded. Realization of cash will depend upon a number
of factors over which Select Energy has limited or no control, including the
accuracy of its valuation methodologies, the volatility of commodity prices,
changes in market design and settlement mechanisms, the outcome of future
transactions, the performance of counterparties, the breadth and depth of the
trading market and other factors.

In addition, the application of derivative accounting principles is
complex and requires management judgment in identification of derivatives and
embedded derivatives, election and designation of the "normal purchases and
sales" exceptions, identifying hedge relationships and assessing hedge
effectiveness, determining the fair value of derivatives and measuring hedge
ineffectiveness. All of these judgments, depending upon their timing and
effect, can have a significant impact on the competitive subsidiaries'
performance and, ultimately, NU's consolidated net income.

Risk management within the competitive energy subsidiaries, including
Select Energy, is organized by management to address the market, credit and
operational exposures arising from the company's primary business segments,
including wholesale marketing, retail marketing and trading. The framework and
degree to which these risks are managed and controlled is consistent with the
limitations imposed by NU's Board of Trustees as established and communicated
in NU's overall risk management policies and procedures. As a means to monitor
and control compliance with these policies and procedures, NU has formed a Risk
Oversight Council (ROC) to monitor competitive energy risk management processes
independently from the businesses that create or manage these risks. The ROC
ensures that the policies pertaining to these risks are followed and makes
recommendations to the Board of Trustees regarding periodic adjustment to the
metrics used in measuring and controlling portfolio risk while also confirming
the methodologies employed by management to discern portfolio values.

ENERGY MANAGEMENT SERVICES

NUEI has two affiliated companies in the energy management business: NGS
and SESI.

NGS was formed in 1999 to provide a full range of integrated energy-
related services to owners of generation facilities and the industrial market
in the Northeast. NGS designs, builds, manages, operates, maintains and
supports electric power generating equipment, facilities and associated
transmission and distribution equipment and provides turnkey management and
operation services to owners of electric generation facilities. NGC and HWP
have contracted with NGS to operate and maintain all of their generating
plants.

Through its wholly-owned subsidiaries, E.S. Boulos Company and Woods
Electrical Co., Inc. (Woods Electrical), NGS provides electrical construction
and contracting services. These services focus on high and medium voltage
installations and upgrades and substation and switchyard construction. Woods
Network Services, Inc. (Woods Network), a subsidiary of NUEI, is a network
products and services company. Woods Electrical and Woods Network were
acquired in July 2002 for an aggregate adjusted purchase price of $16.3
million.

NGS's construction and maintenance services include construction
management and mechanical construction and maintenance services for industrial
and power generation customers. NGS also provides consulting services to its
customers, including engineering and design, asset development, due diligence
reviews and environmental regulatory compliance and permitting services. In
addition, NGS provides laboratory analyses and specialized electrical testing
services.

During 2002, NGS's revenues were approximately $76 million, excluding
intercompany transactions, and are forecasted to grow by approximately 30
percent in 2003. This anticipated growth is expected to be driven by NGS's
increased geographical scope, additional contracts with both new and repeat
customers and the effect of recent acquisitions. Thirty-six percent of NGS's
revenues in 2002 were derived from contracts with its affiliates NGC, PSNH,
SESI and HWP.

SESI was acquired in 1990 and provides energy efficiency, design and
construction solutions to government, institutional and commercial facilities.
In delivering its services, SESI focuses on reducing its customers' energy
costs, improving the efficiency and reliability of their energy-consuming
equipment and conserving energy and other resources. SESI also designs, builds
and maintains central energy plants producing power, heating and cooling for
their hosts. SESI's engineering and construction management services have been
directed primarily to markets in the eastern United States. SESI's subsidiary,
Select Energy Contracting, Inc. (SECI), provides service contracts and
mechanical and electrical contracting, primarily directed to energy systems in
commercial markets.

In competitive procurements by the United States Departments of Defense
and Energy and the General Services Administration, SESI has been selected as
an "Energy Saving Performance Contractor" (ESPC) for all fifty states and
overseas facilities. Over the last several years, SESI became one of the major
providers of design, construction, financing and long-term operation and
maintenance of energy-efficient and environmentally clean systems to replace
older infrastructure. SESI has recently installed the largest fuel cell-based
energy plant in the United States (at a state school in Connecticut) and the
new stand-alone energy plant at Bradley International Airport in Connecticut.
SESI is under contract to operate and maintain the plants for at least 20
years. In 2002, federal ESPC work constituted 20 percent of SESI's revenues,
which were approximately $99 million. In 2003, SESI's revenues are anticipated
to grow by approximately 30 percent based on existing backlog and continuing
success in its existing business lines.

TELECOMMUNICATIONS

Mode 1 was established in 1996 to participate in a wide range of
telecommunications activities both within and outside New England and is
currently owned by NUEI. Mode 1 is a licensed competitive local exchange
carrier authorized to provide local phone service within the state of
Connecticut. Mode 1 provides telecommunication network services at the retail
and wholesale levels, primarily dark fiber. It has built high speed fiberoptic
connectivity to secondary and tertiary markets within cities such as Hartford,
Connecticut and serves the City of Hartford's schools and libraries with an
optical network.

NU has invested approximately $22 million in Mode 1 since it was
established, which investment was principally used to fund Mode 1's investment
in NEON Communications, Inc., a wholesale telecommunication infrastructure
provider of dark and light fiber-optic services (NEON). As of January 1, 2002,
Mode 1 was the largest equity investor in NEON, owning approximately 19.3
percent of the common shares of NEON. NEON is a wholesale provider of high
bandwidth, advanced optical networking solutions and services on intercity,
regional and metro networks in the twelve-state Northeast and mid-Atlantic
markets, utilizing a portion of the NU system companies' transmission and
distribution facilities. An officer and trustee of NU is a member of the Board
of Directors of NEON.

In June 2001, NEON and Mode 1 entered into a purchase agreement pursuant
to which Mode 1 purchased from NEON an 18 percent subordinated convertible note
due 2008 in the principal amount of $15 million (Note). On June 25, 2002 NEON
filed for bankruptcy protection under Chapter 11 of the United States
Bankruptcy Code. Following negotiations with its senior debtholders and
Mode 1, NEON filed a plan of reorganization and emerged from bankruptcy on
December 22, 2002. Under NEON's plan of reorganization, all existing shares of
NEON's common stock, including those held by Mode 1, were cancelled along with
the Note held by Mode 1. As part of the reorganization, Mode 1 agreed to
purchase seven percent of the outstanding securities of the reorganized NEON
for approximately $3.2 million. This phase of NEON's reorganization closed in
December 2002.

FINANCING PROGRAM

2002 FINANCINGS

On January 30, 2002, PSNH Funding LLC 2, a subsidiary of PSNH, sold $50
million of additional RRBs at an interest rate of 4.58 percent. The bonds,
which were rated AAA by three credit rating agencies, will amortize over the
next six years with an average maturity of 3.5 years and have a scheduled
maturity date of February 1, 2008. PSNH used the proceeds to repay short-term
debt that was incurred to buy out a high-cost purchase power obligation in
December 2001. In 2001, funding affiliates of PSNH, CL&P and WMECO sold an
aggregate of approximately $2.1 billion of RRBs and RRCs in similar
transactions. All RRBs and RRCs are payable solely from collections from
customers of PSNH, CL&P and WMECO, respectively, and are non-recourse to the
companies.

On April 4, 2002, NU issued $263 million of 10-year senior unsecured
notes. The notes carry a coupon of 7.25 percent and mature on April 1, 2012.
Proceeds from the issuance were used to redeem a similar amount of variable
rate notes that were issued on February 28, 2001 to finance NU's merger with
Yankee.

On July 10, 2002, CL&P renewed its accounts receivable securitization bank
credit line and extended its termination date to July 9, 2003. The credit line
capacity remained the same at $100 million.

On August 29, 2002, SESI entered into an assignment of delivery orders
payments (Assignment) with a financing entity, BFL Funding IV LLC (BFL), to
finance the construction and installation of certain energy conservation
measures at several federal government installations which SESI had agreed to
install pursuant to delivery orders issued by the federal government. Pursuant
to the Assignment, SESI assigned the payments due under the delivery orders by
the federal government to BFL in exchange for $12.5 million. BFL issued $12.6
million of trust certificates at an interest rate of 6.25 percent that mature
in October 2021 to fund this payment. Certain obligations of SESI under the
transaction documents and the delivery order payments due from the government
are backed by an NU parent guaranty.

On September 9, 2002, CL&P entered into a replacement standby bond
purchase agreement supporting the 1996A series pollution control revenue bonds
(PCRBs). The $62.9 million, 364-day agreement replaced a similar agreement and
expires on October 21, 2003. The original transaction was approved by the DPUC
in 1997.

On October 24, 2002, Hannie Mae LLC purchased from SESI monies due or to
become due under certain task order contracts for $30 million. The proceeds
will be used to fund the construction of energy conservation projects at
several governmental facilities and will be recorded as debt as construction
draws occur through April 2004. The interest rate is approximately 7.65
percent and the amortizing debt will mature on December 1, 2026. The debt,
payable from the resulting energy savings, is backed by an NU parent guaranty.

On November 1, 2002, NAEC used its share of proceeds from the sale of the
Seabrook nuclear generating station to pay off its $90 million term credit
agreement that expired on November 9, 2001.

On November 12, 2002, CL&P, WMECO, PSNH and Yankee Gas entered into a new
unsecured 364-day revolving credit facility for $300 million, replacing a
similar $350 million facility that was due to expire on November 15, 2002.
CL&P may draw up to $150 million, and WMECO, PSNH and Yankee Gas may draw up to
$100 million each, subject to the $300 million maximum for the entire facility.
Unless extended, the credit facility will expire on November 11, 2003.

On November 12, 2002, NU entered into a new unsecured 364-day revolving
credit facility for $350 million, replacing a similar $300 million facility
that was due to expire on November 15, 2002. The facility supports the working
capital needs of NU and its competitive subsidiaries. The new facility
provides a total commitment of $350 million which is available subject to two
overlapping sub-limits. First, subject to the notional amount of any letters
of credit outstanding, amounts up to $350 million are available for advances.
Second, subject to the advances outstanding, letters of credit may be issued in
an aggregate amount of up to $250 million, an increase of $50 million over the
prior facility. The agreement provides for letters of credit to be issued in
the name of NU or any of its subsidiaries. Unless extended, the credit
facility will expire on November 11, 2003.

NU paid common dividends totaling $67.8 million in 2002, compared to $60.9
million paid in 2001, reflecting increases in the quarterly dividend rate that
were effective September 30, 2001 and September 30, 2002. The higher levels of
dividends were easily accommodated by rising general liquidity at the NU parent
level, due in part to the continued return of equity capital from the regulated
subsidiaries, as well as their payment of common dividends to the parent.
Liquidity at the parent company is also reinforced by the absence of debt
maturities and minimal sinking fund payments in the near term ($23 million in
2003 and $24 million in 2004).

Total NU system debt, including short-term and capitalized lease
obligations but not including RRCs and RRBs, was $2.4 billion as of
December 31, 2002, compared with $2.7 billion as of December 31, 2001. The
decrease was primarily due to a reduction in short-term bank borrowings.

For more information regarding NU system financing, see "Notes to
Consolidated Statements of Capitalization" in NU's financial statements, other
footnotes related to long-term debt, short-term debt and the sale of accounts
receivables, as applicable, in the notes to NU's, CL&P's, PSNH's, and WMECO's
financial statements and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations."

2003 FINANCING REQUIREMENTS

The NU system's aggregate capital requirements for 2003 are approximately
as follows:

Yankee NU
CL&P PSNH WMECO Gas Other System
(Millions)
Construction $327 $116 $ 28 $ 73 $ 96 $640

Maturities 0 0 0 0 0 0
Cash Sinking
Funds * 0 0 0 2 55 57
---- ---- ---- ---- ---- ----
Total $327 $116 $ 28 $ 75 $151 $697
==== ==== ==== ==== ==== ====

* CL&P, WMECO and PSNH have sinking funds associated with RRCs and RRBs that
are not included in the capital requirements subtotal. All interest and
principal payments for these bonds are collected through a non-bypassable
charge assessed to customers and do not represent additional capital
requirements.

For further information on the NU system's 2003 financing requirements,
see "Notes to Consolidated Statements of Capitalization" in NU's financial
statements, "Long-Term Debt" in the notes to CL&P's, PSNH's and WMECO's
financial statements and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations."

2003 FINANCING PLANS

NU projects a moderate level of system financings in 2003.

CL&P is contemplating the issuance of up to $220 million of debt to
refinance its pre-1983 spent nuclear fuel obligations and has applied to the
DPUC for authority to issue this debt. CL&P has also announced plans for the
construction of various transmission facilities. The projects require numerous
federal and state regulatory approvals. If approved, construction of these
facilities would require external financing. See "Financing Program -
Construction and Capital Improvement Program."

WMECO has applied to the DTE to issue approximately $105 million of debt
to refinance its existing short-term debt and pre-1983 spent nuclear fuel
obligations.

Yankee Gas may seek to issue up to $75 million of long-term debt in 2003
to finance its capital requirements and may also require additional debt
issuances in later years, depending on the extent of its capital program.
Yankee Gas is currently implementing a number of capital projects and is
planning the construction of a liquefied natural gas storage and production
facility in Waterbury, Connecticut that could cost approximately $60 million.
See "Financing Program - Construction and Capital Improvement Program."

FINANCING LIMITATIONS

Many of the NU system companies' charters and borrowing facilities contain
financial limitations that must be satisfied before borrowings can be made and
for outstanding borrowings to remain outstanding. In addition, the NU system
companies are subject to certain federal and state orders and policies which
limit their financial activities.

Under their current revolving credit facility agreement, CL&P, WMECO, PSNH
and Yankee Gas are allowed to maintain a ratio of debt to total capitalization
(leverage ratio) of no more than 65 percent. At December 31, 2002, CL&P's,
WMECO's, PSNH's, and Yankee Gas's leverage ratios were 44 percent, 48 percent,
56 percent and 30 percent, respectively. This agreement also requires the
companies to maintain 12-month earnings before interest and taxes to interest
expense ratio (interest coverage ratio) of at least 2.25 to 1.0. At
December 31, 2002, CL&P's, WMECO's, PSNH's and Yankee Gas' interest coverage
ratios were 4.37 to 1, 10.78 to 1, 6.54 to 1 and 2.76 to 1, respectively.
These ratios do not include RRBs and RRCs.

NU is allowed, under its current revolving short-term credit agreement
facility, to maintain a debt to total capitalization (leverage ratio) of no
more than 66 percent. At December 31, 2002, NU's leverage ratio was 50
percent. In addition, NU is required to maintain a 12-month consolidated
interest coverage ratio of at least 2.0 to 1.0. This covenant was reduced from
2.25 to 1.0 in the prior year's facility to provide additional flexibility to
NU. At December 31, 2002, NU's consolidated interest coverage ratio was 2.57
to 1.0. These ratios do not include RRBs and RRCs.

The amount of short-term debt that may be incurred by NU, CL&P, PSNH,
WMECO, NAEC, Northeast Nuclear Energy Company (NNECO), Yankee, Yankee Gas and
HWP is also subject to periodic approval by the SEC under the Public Utility
Holding Company Act of 1935 (1935 Act). Current short-term debt authorizations
expire on June 30, 2003 and NU plans to file in early 2003 with the SEC to
extend the short-term debt authority for these companies and to add certain
additional subsidiaries to the Northeast Utilities System Money Pool (Pool).
PSNH's and NAEC's short-term debt in excess of 10 percent of net fixed plant is
also regulated by the NHPUC. The following table shows the amount of short-
term borrowings authorized by the SEC or the NHPUC for each company, as the
case may be, as of December 31, 2002, and the amounts of outstanding short-term
debt of those companies at the end of 2002 and as of March 3, 2003:

Maximum Authorized Outstanding
Short-Term Debt Short-Term Debt (1)
December 31, 2002 March 3, 2003
(Millions)

NU $400 $ 0.0 $ 0.0
CL&P 375 38.1 14.0
PSNH (2) 225 0.0 0.0
WMECO 250 92.9 86.8
NAEC(3) 260 0.0 0.0
NNECO 75 0.0 0.0
Yankee 50 0.0 0.0
Yankee Gas 100 66.0 58.6
HWP 5 0.0 0.0
Select Energy N/A 217.2 161.7
NGS(4) N/A 18.5 17.9
SESI(4) N/A 6.5 0.0
RRR(4) N/A 32.7 33.0
Other 7.5 9.3
------ ------
Total $479.4 $381.3
====== ======

(1) These columns include borrowings of various NU system companies from NU and
other NU system companies. Total NU system short-term indebtedness to
unaffiliated lenders was $56 million at December 31, 2002 and $20 million at
March 3, 2003.

(2) Under applicable NHPUC provisions, PSNH can incur short-term debt up to
$100 million.

(3) Under applicable NHPUC regulations, NAEC can incur short term debt up to 10
percent of net fixed plant or such other amount as approved by the NHPUC.
Prior to the sale of Seabrook, NAEC had authorization from the NHPUC to issue
up to $260 million of short-term debt. NAEC has no plans to incur any future
short-term borrowings.

(4) The SEC limits, as indicated, the following companies' borrowings from the
Pool (but not borrowings from either parent companies or non-affiliates): NUEI
($100 million); Select Energy ($200 million); NGS ($20 million); SESI ($20
million) and The Rocky River Realty Company (RRR) ($30 million). NU, NGC and
Mode 1 may lend to but are not authorized to borrow from the Pool.

The supplemental indentures under which NU issued $175 million in
principal amount of 8.58 percent amortizing notes in December 1991 and $75
million in principal amount of 8.38 percent amortizing notes in March 1992
contain restrictions on dispositions of certain NU system companies' stock,
limitations of liens on NU assets and restrictions on distributions on and
acquisitions of NU stock. Under these provisions, NU, CL&P, PSNH and WMECO may
not dispose of voting stock of CL&P, PSNH or WMECO other than to NU or another
NU system company, except that CL&P may sell voting stock for cash to third
persons if so ordered by a regulatory agency so long as the amount sold is not
more than 19 percent of CL&P's voting stock after the sale. The restrictions
also generally prohibit NU from pledging voting stock of CL&P, PSNH or WMECO or
granting liens on its other assets in amounts greater than five percent of the
total common equity of NU. Many of the NU system companies' credit agreements
have similar restrictions. As of December 31, 2002, no NU debt was secured by
liens on NU assets. Furthermore, NU may not declare or make distributions on
its capital stock, acquire its capital stock (or rights thereto), or permit an
NU system company to do the same, at times when there is an event of default
existing under the supplemental indentures under which the amortizing notes
were issued.

The indenture under which NU issued $263 million in principal amount of
7.25 percent notes in April 2002 contains a limitation of liens on NU assets
and a limitation of sale and leaseback transactions on those assets.

CL&P's charter contains preferred stock provisions restricting the amount
of additional unsecured debt it may incur. As of December 31, 2002, the amount
of additional unsecured debt it could incur was $480 million.

The indentures securing the outstanding first mortgage bonds of CL&P
provide that additional bonds may not be issued, except for certain refunding
purposes, unless earnings are at least twice the pro forma annual interest
charges on outstanding bonds, and certain prior lien obligations and bonds to
be issued.

The preferred stock provisions of CL&P's charter also prohibit the
issuance of additional preferred stock (except for refinancing purposes) unless
income before interest charges (as defined and after income taxes and
depreciation) is at least 1.5 times the pro forma annual interest charges on
indebtedness and the annual dividend requirements on preferred stock that will
be outstanding after the additional stock is issued. At December 31, 2002,
CL&P's income before interest charges was approximately 2.95 times the pro
forma annual interest and dividend requirements. CL&P has no current plans to
issue any preferred stock.

Certain consolidated subsidiaries have dividend restrictions imposed by
their long-term debt agreements. These restrictions also limit the amount of
retained earnings available for NU common dividends. At December 31, 2002,
retained earnings available for the payment of dividends totaled $765.6
million.

The Federal Power Act limits the payment of dividends by PSNH, NAEC, CL&P,
and WMECO to retained earnings. At December 31, 2002, retained earnings for
these companies were $195 million, $20.3 million, $308.6 million and $77.5
million, respectively.

New Hampshire statutes also limit the payment of dividends by PSNH and
NAEC to the amount of retained earnings.

CL&P's first mortgage bond indenture limits dividend payments and share
repurchases to an amount equal to (i) retained earnings accumulated after
December 31, 1966; plus (ii) retained earnings accumulated prior to January 1,
1967, not exceeding $13.5 million; plus (iii) any additional amounts authorized
by the SEC. In 2000 and 2002, the SEC approved CL&P's proposal to pay
dividends and repurchase shares from capital or unearned surplus of up to $410
million in aggregate from proceeds derived from industry restructuring
transactions.

Applicable merger accounting rules required that upon acquisition by NU,
Yankee's and its subsidiaries' retained earnings were reclassified as capital
surplus. Also, the merger premium NU paid to acquire Yankee was allocated
among Yankee and its subsidiaries and "pushed down" to their balance sheets.
Under accounting conventions in existence at the time of the merger, the
majority of the merger premium would be amortized over 40 years. In June 2001,
the Financial Accounting Standards Board issued a statement that, effective
January 1, 2002, no longer requires companies to amortize goodwill as an
expense to the income statement. Instead goodwill is required to be evaluated
for impairment and any impairments to goodwill would be charged to expense.
The effect of the new accounting standard was a $0.4 million annual reduction
in goodwill amortization expense.

Under the 1935 Act, subsidiaries of registered holding companies are only
allowed to pay dividends out of retained earnings unless the SEC allows
otherwise. The effect of this rule would be to prevent Yankee from paying
dividends to NU from any source other than post-merger earnings, as reduced by
the merger premium amortization. NU had received permission from the SEC,
through June 2002, for Yankee and Yankee Gas to pay dividends (i) out of
additional paid-in capital up to the amount of their respective retained
earnings just prior to the merger with NU and (ii) out of earnings before the
amortization of the merger goodwill (gross earnings) in the case of Yankee Gas
and out of distributed earnings in the case of Yankee. To assure that Yankee
Gas has sufficient cash to fund operations, Yankee Gas will not pay dividends
in excess of 80 percent of gross earnings on a rolling five-year average basis.
In no case would dividends be paid by Yankee or Yankee Gas if their common
equity to total capitalization ratios were below 35 percent. NU also received
permission from the SEC, through June 2002, for Yankee and Yankee Gas to
repurchase their common stock such that their common equity to total
capitalization ratios do not fall below 35 percent. To date, Yankee Gas has
paid no dividends to NU since the merger.

NGC bond covenants prevent NGC from making dividend payments unless (i) no
default or event of default will occur from doing so, (ii) the debt service
reserve account has been sufficiently funded with six months of principal and
interest on the outstanding bonds, and (iii) the debt service coverage ratio
for the previous four fiscal quarters (or, if shorter, since the bond issuance
closing date) and projected debt service coverage ratio for the next eight
fiscal quarters is (a) greater than or equal to 1.35 if contracted generating
capacity is greater than 75 percent or (b) greater than or equal to 1.70 if
contracted generating capacity is less than 75 percent. At December 31, 2002,
NGC's contracted generating capacity was greater than 75 percent. NGC expects
to meet its debt service coverage ratio requirements under this covenant and to
pay dividends in 2003.

NU is required under the 1935 Act to maintain its consolidated common
equity at a level equal to at least 30 percent of its consolidated
capitalization. In planning for the issuance of RRBs and RRCs by its
subsidiaries in 2001, NU anticipated being unable to meet this standard because
such bonds and certificates, although nonrecourse to the NU system company
issuers, are considered to be indebtedness of the companies under generally
accepted accounting principles. In 2000, the SEC authorized the consolidated
common equity ratio of NU to fall below 30 percent through December 31, 2002 on
account of such sales and certain related restructuring transactions. NU's
consolidated common equity ratio was greater than 30 percent as of December 31,
2002 and is expected to remain above this level in the future. The 30 percent
test also applies to NU's electric operating subsidiaries. The SEC has
consented to the common equity ratios of CL&P, WMECO and PSNH falling below 30
percent through December 31, 2004. As of December 31, 2002, NU's, CL&P's,
WMECO's and PSNH's ratios were 33.6 percent, 24.1 percent, 31.9 percent and 26
percent, respectively. These ratios include RRBs and RRCs as debt.

NU provides credit assurance in the form of guarantees and letters of
credit for the financial performance obligations of certain of its unregulated
subsidiaries. NU currently has authorization from the SEC to provide up to
$500 million of such guarantees through September 30, 2003 and has applied for
authority to increase this amount to $750 million and extend the authorization
period through September 30, 2005. As of December 31, 2002, NU had provided
approximately $183 million and $7 million, respectively, of such guarantees and
letters of credit. As of January 31, 2003, NU had provided approximately $234
million and $22 million, respectively, of such guarantees and letters of
credit.

Certain NU system credit financing agreements have trigger events tied to
the credit ratings of certain NU system companies, as discussed below.

RRR is a real estate subsidiary that owns NU's Connecticut headquarters
site. It has approximately $6.5 million of debt outstanding that could be
affected by a ratings change. If NU, CL&P, PSNH or WMECO ratings fall below a
B1 Moody's rating or a B+ Standard & Poor's rating, bondholders would have the
right to demand mandatory prepayments.

NGC has a debt reserve account related to the $440 million bond issue that
can be funded with cash, an NU guarantee or a letter of credit from an
acceptable counterparty. The account is currently funded with cash and may be
funded with a guarantee from NU only if NU has an investment grade rating by
Standard & Poor's and Moody's.

NU and its subsidiaries have $650 million of revolving credit agreements
with a number of banks. There are no ratings triggers that would result in a
default, but lower ratings would increase interest on future borrowings from
the credit lines.

A number of Select Energy's contracts require the posting of additional
collateral in the form of cash or letters of credit in the event NU's ratings
were to decline and in increasing amounts dependent upon the severity of the
decline. At NU's present investment grade ratings, Select Energy has not had
to post any collateral based on credit downgrades. Were NU's unsecured ratings
to decline two to three levels to sub-investment grade, Select Energy would,
under its present contracts, be asked to provide approximately $140 million of
collateral or letters of credit to various unaffiliated counterparties and
approximately $80 million to several independent system operators (ISO) and
unaffiliated local distribution companies, which NU, under present
circumstances, would be able to provide from available sources. NU's ratings
are currently stable, and management does not believe that at this time there
is a significant risk of a ratings downgrade to sub-investment grade levels.

CONSTRUCTION AND CAPITAL IMPROVEMENT PROGRAM

The NU system's construction program expenditures, including allowance for
funds used during construction, is estimated to total $640 million in 2003. Of
such total amount, approximately $327 million is expected to be expended by
CL&P, $116 million by PSNH, $73 million by Yankee Gas, $28 million by WMECO
and up to $96 million by other system entities. This construction program data
includes all anticipated costs necessary for committed projects and for those
reasonably expected to become committed projects in 2003, regardless of whether
the need for the project arises from environmental compliance, reliability
requirements or other causes. The construction program's main focus is
maintaining, upgrading and expanding the existing transmission and distribution
system and natural gas distribution system. The system expects to evaluate its
needs beyond 2003 in light of future developments, such as restructuring,
industry consolidation, performance and other events.

The $96 million in construction expenditures planned for other system
entities in 2003 includes $23 million for NUEI (including NGS).

CL&P has announced plans to invest approximately $535 million by the end
of 2008 to construct two new 345,000 volt transmission lines from inland
Connecticut to Norwalk, Connecticut and another $40 million to replace an
existing 138,000 volt transmission line beneath Long Island Sound. The
investment in transmission lines and continued upgrading of the electric
distribution system are expected to increase CL&P's net investment in electric
plant by between $240 million and $360 million for the years 2003 to 2005.
All of these projects are in the developmental or governmental approval stage
and management cannot yet determine whether the projects will be built as
proposed. If current plans are implemented on schedule, the NU system would
likely require additional external financing to construct these projects. If
all of the transmission projects are built as proposed, the NU system's net
investment in electric transmission would increase to nearly $1.1 billion by
the end of 2008.

Yankee Gas will continue to emphasize system expansion of its natural gas
distribution system in Connecticut and plans to move forward with its three
year plan to install a liquid natural gas facility in Waterbury, Connecticut.
See "Connecticut Rates and Restructuring" for information on Yankee Gas' DPUC
filing and the related decision.

REGULATED ELECTRIC OPERATIONS

DISTRIBUTION AND SALES

CL&P, PSNH and WMECO furnish retail franchise electric service in 149, 201
and 59 cities and towns in Connecticut, New Hampshire and Massachusetts,
respectively. In December 2002, CL&P provided retail franchise service to
approximately 1.2 million customers in Connecticut, PSNH provided retail
service to approximately 449,000 customers in New Hampshire and WMECO served
approximately 204,000 retail customers in Massachusetts.

The following table shows the sources of 2002 electric franchise retail
revenues based on categories of customers (exclusive of HWP):

Total NU
CL&P PSNH WMECO System
---- ---- ----- --------

Residential 46% 42% 45% 45%
Commercial 40% 38% 36% 39%
Industrial 12% 19% 18% 15%
Other 2% 1% 1% 1%
---- ---- ---- ----
Total 100% 100% 100% 100%
==== ==== ==== ====

The actual changes in retail kWh sales for the last two years and the
forecasted retail sales growth estimates for the ten-year period 2003 through
2012 for CL&P, PSNH and WMECO are set forth below:

Forecast
2003-2012
2002 over 2001 over Compound Rate
2001 2000 Of Growth
NU System 1.3% 2.3% 1.0%
CL&P 1.8% 2.4% 1.0%
PSNH -0.1% 3.9% 1.5%
WMECO 1.9% -0.9% 0.7%

Consolidated NU retail sales rose by 1.3 percent in 2002, compared with
2001, primarily due to higher cooling requirements. Residential electric sales
were up 4.5 percent. Commercial sales were up by 2.6 percent for the year and
industrial sales decreased by 7.7 percent. Retail sales for CL&P, WMECO and
PSNH were up 1.8 percent, up 1.9 percent and down 0.1 percent, respectively.

REGIONAL AND SYSTEM COORDINATION

The NU system companies and most other New England utilities are parties
to an agreement (NEPOOL Agreement), which provides for coordinated planning and
operation of the region's generation and transmission facilities. The NEPOOL
Agreement was restated and revised as of March 1997 to provide for (i) a pool-
wide open access transmission tariff; (ii) the creation of an ISO; and (iii) a
broader governance structure for New England Power Pool (NEPOOL) and a more
open, competitive market structure. Under these new arrangements the ISO, a
nonprofit corporation whose board of directors and staff are not controlled by
or affiliated with market participants, ensures the reliability of the NEPOOL
transmission system, administers the NEPOOL tariff and oversees the efficient
and competitive functioning of the regional power market.

The NEPOOL tariff provides for nondiscriminatory open access to the
regional transmission network at a single rate regardless of transmitting
distance for all transactions. The rate is a formula rate, structured to
ensure that each transmission provider under the NEPOOL tariff recovers its
revenue requirements.

In 1999, the NEPOOL Executive Committee filed a comprehensive settlement
of all issues set for hearing concerning the NEPOOL transmission tariff. The
settlement resolves disputes concerning the calculation of revenue requirements
for transmission over NEPOOL facilities and resolves disputes over alleged
"double charges" under grandfathered transmission contracts retained by
individual transmission providers, including the NU system. The settlement
also includes a return on earnings (ROES) component which sets the ROES for
each individual transmission provider owning NEPOOL transmission facilities
with respect to those facilities from March 1, 1997 through at least June 1,
2000, provided no changes to individual network transmission tariff rates are
made after December 31, 1999. NU's ROES has been set at 11.75 percent. NU has
made no changes to its transmission tariff rates since the settlement was
reached; accordingly, its ROES has remained unchanged.

As part of the settlement, ISO is required to independently audit the
charges in effect for the period June 1997 through May 2000 or direct that such
an audit be conducted under its supervision. In June 2000, ISO engaged an
independent auditing firm to conduct such an audit. The audit was conducted
over a two-year period and the resulting audit report was filed at FERC on
April 24, 2002. The audit report identified several areas of disagreement
between the auditors and the audited transmission owners. The issues are
currently being addressed through an alternative dispute resolution process
with the FERC.

In December 2000, NU was notified by FERC that it, along with several
other companies, would be the subject of a separate FERC industry-wide audit of
the accounting related to formula rate transmission tariffs. FERC commenced
its audit of NU in February 2001 and an exit conference was held on
February 12, 2002.

Under an agreement (NUG&T) among CL&P, WMECO and HWP, these companies pool
their electric production costs and the costs of their principal transmission
facilities. The NUG&T was revised in 1999 to eliminate the generation aspects
of the agreement. Final agreement from FERC on this revision was granted in
October 2000.

Transmission revenues are allocated between the NUG&T signatories (CL&P,
HWP, WMECO) and PSNH based upon the respective companies' cost of service.

TRANSMISSION ACCESS AND FERC REGULATORY CHANGES

Pursuant to FERC Order 888 (issued in April 1996), NU system companies
operate their transmission system under an open access, nondiscriminatory
transmission tariff.

In December 1999, the FERC issued an order calling on all transmission
owners to voluntarily join RTOs in order to boost competition in electric
markets (Order 2000). In general, each such organization would be an
independent operator over all transmission facilities, and would perform, among
other functions, tariff administration, construction planning and reliability
management for the particular regional transmission system.

In January 2002, ISO-New England and New York ISO proposed to FERC that
the two pools combine to form a single RTO. On November 22, 2002 the ISOs
withdrew their application. On January 16, 2003, ISO-New England announced its
intent to file a joint application with the New England transmission
organizations to create a New England RTO.

On July 15, 2002, the NEPOOL Participants Committee and ISO-New England
management filed a new NEPOOL market rule in a joint filing to implement SMD in
New England. SMD would adopt LMP as a congestion tool as well as other market
features similar to market rules in New York and the Pennsylvania-New Jersey-
Maryland (PJM) Interconnection. The proposed New England SMD also includes
market mitigation rules that would allow ISO-New England to set congestion
proxy prices within certain Designated Congestion Areas (DCA) and would allow
ISO-New England to utilize RMR contracts to ensure the availability of certain
generating plants to run when it would otherwise be uneconomic for such plants
to do so in order to maintain system reliability. NU intervened in the SMD
docket at FERC largely supporting the new market rules, with the exception of
the DCA proposal which, if implemented without restrictions on the ISO, NU
believes could artificially inflate prices in DCAs. The New England SMD
proposal was approved by FERC on December 20, 2002 and was implemented on
March 1, 2003.

In response to concerns raised by the DPUC and the Connecticut Attorney
General concerning the impact of LMP on transmission constrained areas such as
southwest Connecticut, FERC held that the costs of transmission expansion
projects already identified in ISO-New England's 2002 regional transmission
expansion plan (i.e., NU's Phase I and Phase II southwest Connecticut projects)
built within five years from the date of the order should be spread across the
New England region. The December 20, 2002 Order also approved the DCA
mitigation proposal, however, in apparent recognition of the inherent flaws of
the DCA methodology, required ISO-New England to comment within 90 days on an
alternative methodology. NU is seeking rehearing of the order with respect to
the DCA approval. For further information regarding the effect of SMD in the
NU system companies service territory, see "Rates and Electric Industry
Restructuring-Connecticut Rates and Restructuring."

On July 31, 2002, FERC issued a notice of proposed rulemaking (NOPR) on
SMD. The SMD NOPR would require markets to adopt rules similar to those
proposed in the New England SMD, but would also require transmission owners to
either transfer ownership or operational control over their transmission
facilities to an independent transmission provider (ITP) or to become an ITP.
An ITP is similar to the RTO required by Order 2000 except that it need not
cover as large a geographic area as RTOs. The SMD NOPR also proposes to change
the nature of transmission service by eliminating the notion of non-firm
service and establishing priority of service based on the customer's holding of
financial transmission rights. Comments were filed on November 15, 2002 and a
second round of comments on more controversial issues such as transmission
planning and pricing, financial transmission rights and resource adequacy
requirements were filed on January 10, 2003. A final rule is expected to be
issued some time in 2003.

REGULATED GAS OPERATIONS

In March 2000, NU acquired Yankee and Yankee became a wholly owned
subsidiary of NU. Yankee is the parent of Yankee Gas, the largest natural gas
distribution company in Connecticut. Yankee continues to act as the holding
company of Yankee Gas and its two active nonutility subsidiaries, NorConn
Properties, Inc. (NorConn), which holds the property and facilities of Yankee
and its subsidiaries, and Yankee Energy Financial Services Company, which
provides customers with financing for energy equipment installations.

Yankee Gas operates the largest natural gas distribution system in
Connecticut as measured by number of customers and size of service territory.
Total throughput (sales and transportation) for 2002 was 49.9 billion cubic
feet. In 2002, total gas operating revenues of $293 million were comprised of
the following: 48 percent residential; 28.1 percent commercial; 19.4 percent
industrial; and the remaining 4.1 percent other. Yankee Gas provides firm gas
sales service to customers who require a continuous gas supply throughout the
year, such as residential customers who rely on gas for their heating, hot
water and cooking needs. Yankee Gas also provides interruptible gas sales
service to certain commercial and industrial customers that have the capability
to switch from natural gas to an alternative fuel on short notice. Yankee Gas
can interrupt service to these customers during peak demand periods. Yankee
Gas offers firm and interruptible transportation services to customers who
purchase gas from sources other than Yankee Gas. In addition, Yankee Gas
performs gas sales, gas exchanges and capacity releases to marketers to reduce
its overall gas expense.

Although Yankee Gas is not subject to FERC jurisdiction, the FERC does
regulate the interstate pipelines serving Yankee Gas' service territory.
Yankee Gas, therefore, is directly and substantially affected by the FERC's
policies and actions. Accordingly, Yankee Gas closely follows and, when
appropriate, participates in proceedings before the FERC.

Yankee Gas is subject to regulation by the DPUC, which, among other
things, has jurisdiction over rates, accounting procedures, certain
dispositions of property and plant, mergers and consolidations, issuances of
securities, standards of service, management efficiency and construction and
operation of distribution, production and storage facilities. For information
relating to Yankee Gas DPUC proceedings, see "Rates and Electric Industry
Restructuring - Connecticut Rates and Restructuring."

For information on the proposed expansion of Yankee Gas' natural gas
delivery system in Connecticut, see "Construction and Capital Improvement
Program."

NUCLEAR GENERATION
GENERAL

During 2002, certain NU system companies had ownership interests in one
nuclear unit, Seabrook, and equity interests in four regional nuclear companies
(the Yankee Companies) that separately own the Connecticut Yankee nuclear unit
(CY), the Maine Yankee nuclear unit (MY), VY (prior to its sale) and the Yankee
Rowe nuclear unit (Yankee Rowe). One NU system company operated Seabrook prior
to its sale in November 2002. Yankee Rowe, CY and MY have been permanently
removed from service and are being decontaminated and decommissioned.

On November 1, 2002, CL&P and NAEC and certain nonaffiliated joint owners
consummated the sale of their collective 88.2 percent interests in Seabrook to
FPL. The remaining interests held by certain other nonaffiliated joint owners
were retained by those entities. The NU system received approximately $384
million of cash proceeds from the sale and used those proceeds primarily to pay
down debt maturing in less than one year. As part of the sale, FPL assumed
responsibility for decommissioning Seabrook.

Before Seabrook was sold to FPL, CL&P and NAEC together owned 40.04
percent of Seabrook as tenants in common. Their respective ownership interests
in each unit were 4.06 percent and 35.98 percent. The unit was shut down for a
scheduled 28 day refueling outage beginning on May 4, 2002. The unit returned
to service on June 1, 2002, completing the shortest outage in Seabrook's
history. During 2002, Seabrook operated at a capacity factor of 90.2 percent
through November 1, 2002, the date of closing on the sale of the unit.

CL&P, PSNH, WMECO and other New England electric utilities are the
stockholders of the Yankee Companies. Each Yankee Company, other than VYNPC,
owns a single nuclear generating unit. The stockholder-sponsors of each Yankee
Company are responsible for proportional shares of the operating and
decommissioning costs of the respective Yankee Company. The relative rights
and obligations with respect to the Yankee Companies are approximately
proportional to the stockholders' percentage stock holdings, but vary slightly
to reflect arrangements under which nonstockholder electric utilities have
contractual rights to some of the output of particular units. CL&P's, PSNH's
and WMECO's stock ownership percentages in the Yankee Companies are set forth
below:
NU
CL&P PSNH WMECO System
Connecticut Yankee Atomic
Power Company (CYAPC) 34.5% 5.0% 9.5% 49.0%
Maine Yankee Atomic Power
Company (MYAPC) 12.0% 5.0% 3.0% 20.0%
Vermont Yankee Nuclear
Power Corporation (VYNPC) 10.1% 4.3% 2.6% 17.0%
Yankee Atomic Electric
Company (YAEC) 24.5% 7.0% 7.0% 38.5%

The ownership interests of CL&P, PSNH and WMECO in VYNPC increased
slightly in early 2002 when VYNPC redeemed the stock owned by certain Vermont
municipal electric systems which had previously owned about five percent of
VYNPC's stock.

In March 2001, the board of VYNPC voted to proceed to auction the plant.
J.P. Morgan was selected to conduct the auction. In August 2001, the owners of
VYNPC announced they would sell the VY unit to a subsidiary of Entergy
Corporation for approximately $180 million (approximately $145 million for the
plant, materials and supplies and $35 million for the nuclear fuel). NU
subsidiaries owned 17 percent of the VY unit and, under the terms of the sale,
will continue to buy 17 percent of the plant's output through March 2012 at
fixed prices. The sale of the unit was consummated on July 31, 2002. Prior to
its sale, VY operated at a capacity factor of 91.7 percent during 2002.
Although there was no refueling outage in 2002 prior to the sale, a 12 day mid-
cycle outage began on May 11, 2002. This outage was undertaken primarily to
replace some defective fuel in the reactor.

In conjunction with the sales of Millstone in 2001 and Seabrook in 2002,
NU terminated its nuclear insurance related to these plants. However, through
its continuing association with Nuclear Electric Insurance Limited (NEIL) and
its interests in CYAPC and VYNPC, NU is subject to potential retrospective
assessments totaling $0.8 million under the respective NEIL insurance policies.

The NRC has broad jurisdiction over the design, construction and operation
of nuclear generating stations, including matters of public health and safety,
financial qualifications, antitrust considerations and environmental impact.
The NRC also has jurisdiction over the decommissioning activities at Yankee
Rowe, CY and MY.

NUCLEAR FUEL

GENERAL

In 1998, an action was initiated by the owners of Millstone in the United
States Court of Federal Claims against the United States Department of Energy
(DOE) regarding the special annual assessment that the DOE imposes on
purchasers of enriched uranium to meet the future costs of decontaminating and
decommissioning (D&D) of government owned uranium enrichment facilities.
Similar actions for Seabrook and CY were also filed. The lawsuits challenge
the imposition of the D&D assessment on federal constitutional grounds and are
similar to actions filed by a number of other utilities against DOE.
Proceedings in the Millstone, Seabrook and CY cases were stayed pending the
final resolution of a similar claim brought against the DOE by MYAPC. In July
1999, the claims court dismissed MYAPC's complaint. In November 2001, the
Federal circuit court affirmed the dismissal of MYAPC's claims. On February 6,
2002, MYAPC filed a petition for certiorari, asking the United States Supreme
Court to review the decision of the Federal circuit court, which petition was
denied on May 28, 2002. The Millstone case was dismissed on July 19, 2002.

Nuclear fuel costs associated with nuclear plant operations include
amounts for disposal of spent nuclear fuel. The NU system companies include in
their nuclear fuel expense spent fuel disposal costs accepted by the DPUC,
NHPUC and DTE in rate case or fuel adjustment decisions. Spent fuel disposal
costs also are reflected in the FERC-approved wholesale charges.

HIGH-LEVEL RADIOACTIVE WASTE

The Nuclear Waste Policy Act of 1982 (NWPA) provides that the federal
government is responsible for the permanent disposal of spent nuclear reactor
fuel (SNF) and other high-level waste. As required by the NWPA, electric
utilities generating SNF and high-level waste are obligated to pay fees into a
fund which would be used to cover the cost of siting, constructing, developing
and operating a permanent disposal facility for this waste. The NU system
companies have been paying for such services for fuel burned on or after
April 7, 1983, on a quarterly basis since July 1983. The DPUC, NHPUC and DTE
permit the fee to be recovered through rates. For nuclear fuel used to
generate electricity prior to April 7, 1983 (prior-period fuel), payment must
be made upon the first delivery of spent fuel to the DOE. The DOE's current
estimate for an available site is 2010 at the earliest.

On July 9, 2002, the United States Senate approved a resolution
designating the Yucca Mountain site in Nevada as the nation's repository for
used nuclear fuel. With this vote of approval, Congress formally rejected the
Nevada disapproval and affirmed President Bush's decision to designate Yucca
Mountain as the repository site. The DOE can now prepare and file a license
application with the NRC and begin the development of a transportation policy
and plan.

In return for payment of the fees prescribed by the NWPA, the federal
government is to take title to and dispose of the utilities' high-level wastes
and SNF. There have been numerous litigation proceedings involving the DOE's
statutory and contractual obligation to accept high-level waste and SNF. While
the courts have declined to order the DOE to begin accepting spent fuel for
disposal on January 31, 1998, the courts have left open the utilities' ability
to bring damage claims against the DOE.

In 1998, YAEC, CYAPC and MYAPC filed separate complaints against the DOE
in the United States Court of Federal Claims seeking monetary damages resulting
from DOE's failure to accept spent nuclear fuel for disposal. In decisions
later that year, the court found liability on the part of DOE to the companies
for breach of the standard contract, based upon the DOE's failure to begin
disposal of spent nuclear fuel. The damages owed to YAEC, CYAPC and MYAPC as a
result of DOE's failure to begin disposing of spent nuclear fuel is in
litigation and revised damage claims are expected to be filed in the spring of
2003.

Until the federal government begins accepting nuclear waste for disposal,
nuclear generating plants will need to retain high-level waste and spent fuel
onsite or make some other provisions for its storage.

Construction of dry spent fuel storage facilities, to hold the spent
nuclear fuel and other high level waste generated at those facilities until the
DOE accepts this waste, is in progress at CY, MY and Yankee Rowe. No fuel has
yet been moved to the dry storage facility site at CY, as this move is expected
to begin by the fourth quarter of 2003 and targeted completion of the facility
is by the end of 2004. Approximately 20 percent of the spent fuel has been
transferred to the storage facility at MY, with completion estimated during
late 2003 or early 2004. Approximately 85 percent of the spent fuel at Yankee
Rowe has been moved to the storage site, with completion estimated during the
second quarter of 2003.

DECOMMISSIONING

Pursuant to the Purchase and Sale Agreement with FPL for the sale of
Seabrook, upon the closing of the sale on November 1, 2002, NAEC and CL&P were
obligated to deliver to FPL decommissioning funds in the amount of $66.1
million. In addition, a "top off" payment of $36.8 million was made. Upon the
closing, FPL assumed full responsibility for decommissioning NU's former
interests in Seabrook, and NU shareholders, the NU system companies and their
ratepayers have no further obligation related to decommissioning.

CYAPC and MYAPC are currently collecting revenues for the decommissioning
of the related sites through their power purchasers. YAEC ceased
decommissioning collections in June 2000. The table below sets forth the NU
system companies' estimated share of remaining decommissioning costs of the
Yankee Companies' units as of December 31, 2002. The estimates are based on
the latest decommissioning cost estimates. For information on the equity
ownership of the NU system companies in each of the Yankee Companies' units,
see "Electric Operations-Nuclear Generation-General."

CL&P PSNH WMECO NU System
(Millions)

CY* $126.4 $18.3 $34.8 $179.5
MY* $ 53.0 $22.1 $13.3 $ 88.4
Rowe* $ 55.1 $15.7 $15.7 $ 86.5
------ ----- ----- ------
Total $234.5 $56.1 $63.8 $354.4
====== ===== ===== ======

* The costs shown include the expected future revenue requirements
associated with the funding of decommissioning, recovery of remaining assets
and other closure costs associated with the early retirement of Yankee Rowe, CY
and MY as of December 31, 2002, which have been recorded as an obligation on
the books of the NU system companies.

As of December 31, 2002, the Yankee Companies' share of the external
decommissioning trust fund balances (at market), reflecting the contribution
share provided by the NU system companies, is as follows:

CL&P PSNH WMECO NU System
(Millions)

CY $ 79.1 $11.4 $21.8 $112.3
Rowe 17.7 5.1 5.1 27.9
MY 13.1 5.4 3.3 21.8
------ ----- ----- ------
Total $109.9 $21.9 $30.2 $162.0
====== ===== ===== ======

As part of an ongoing review process, management of CYAPC, YAEC and MYAPC
prepared preliminary revised estimates of the cost of the nuclear units owned
by those companies. The estimated costs of decommissioning CY, Yankee Rowe and
MY have increased by approximately $150 million, $190 million and $40 million,
respectively, over prior estimates and are subject to FERC approval prior to
recovery in rates by the Yankee Companies. Such prior estimated costs were
included in the Yankee Companies' rates which have been approved by the FERC.
The new cost estimates will be revised from time to time based on information
available to the Yankee Companies regarding future costs and are attributable
mainly to increases in the projected costs of spent fuel storage, security and
liability and property insurance. The respective shares of the increased costs
would be approximately as follows: CL&P: $103 million; PSNH: $23 million; and
WMECO: $29 million.

CYAPC is required to file with FERC no later than mid-2004 for increased
costs associated with the decommissioning of CYAPC. YAEC is expected to file
with FERC in the spring of 2003 to renew decommissioning collections from its
sponsor companies. The anticipated decommissioning collection levels, pending
FERC approval, are assumed to begin in June 2003. The delay in YAEC's fuel
transfer activities is expected to extend the completion of decommissioning
activities to 2005. It is also anticipated that MYAPC will file with FERC no
later than November 1, 2003 for new rates to be effective January 1, 2004. In
the case of each of CYAPC, YAEC and MYAPC, the precise annual collection
amounts and duration will be determined as part of the FERC approval process.

In January 2001, NNECO filed a written notification with the NRC reporting
that during a reconciliation and verification of Millstone spent nuclear fuel
records, personnel concluded that the location of two full-length irradiated
fuel pins could not be determined and were not properly tracked in the records.
NNECO reported that the two fuel rods are from the same fuel assembly, which
was disassembled in 1972 for inspection, and were displaced from the fuel
assembly in 1974. NNECO further reported that records indicate that in 1979
and 1980 the displaced rods were physically verified to be stored in a canister
in the Millstone 1 spent fuel pool, and that the rods and canister are no
longer in the spent fuel pool location documented in 1979 and 1980. NNECO's
report indicated that records retrieved to date do not document the relocation
or disposition of the two fuel rods.

On October 5, 2001, NU issued a report, following an extensive search,
concerning two missing fuel pins at the retired Millstone 1 nuclear unit which
was subsequently sold to DNCI. As of December 31, 2002, costs related to this
search totaled $9.1 million. The report concluded that the pins are currently
located in one of four facilities licensed to store low or high-level nuclear
waste and that they are not a threat to public health and safety. A follow-up
inspection by the NRC concluded that NU's investigation was thorough and
complete and its conclusions were reasonable and supportable. These events
have, however, resulted in the issuance of an NRC notice of violation and the
imposition of a $288,000 civil penalty. The NRC is expected to conclude its
review of this matter in 2003.

OTHER REGULATORY AND ENVIRONMENTAL MATTERS

ENVIRONMENTAL REGULATION

GENERAL

The NU system and its subsidiaries are subject to federal, state and local
regulations with respect to water quality, air quality, toxic substances,
hazardous waste and other environmental matters. Additionally, the NU system's
major generation and transmission facilities may not be constructed or
significantly modified without a review by the applicable state agency of the
environmental impact of the proposed construction or modification. Compliance
with increasingly more stringent environmental laws and regulations,
particularly air and water pollution control requirements, may limit operations
or require substantial investments in new equipment at existing facilities.

SURFACE WATER QUALITY REQUIREMENTS

The federal Clean Water Act requires every "point source" discharger of
pollutants into navigable waters to obtain a National Pollutant Discharge
Elimination System (NPDES) permit from the United States Environmental
Protection Agency (EPA) or state environmental agency specifying the allowable
quantity and characteristics of its effluent. NU system facilities are in the
process of obtaining or renewing all required NPDES permits in effect.
Compliance with NPDES and state water discharge permits has necessitated
substantial expenditures, which are difficult to estimate, and may require
further expenditures because of additional requirements that could be imposed
in the future. For information regarding civil lawsuits related to alleged
violations of certain facilities' NPDES permits, see Item 3, "Legal
Proceedings."

The Federal Oil Pollution Act of 1990 (OPA 90) sets out the requirements
for facility response plans and periodic inspections of spill response
equipment at facilities that can cause substantial harm to the environment by
discharging oil or hazardous substances into the navigable waters of the United
States and onto adjoining shorelines. The NU system companies are currently in
compliance with the requirements of OPA 90. OPA 90 includes limits on the
liability that may be imposed on persons deemed responsible for release of oil.
The limits do not apply to oil spills caused by negligence or violation of laws
or regulations. OPA 90 also does not preempt state laws regarding liability
for oil spills. In general, the laws of the states in which the NU system owns
facilities and through which the NU system transports oil could be interpreted
to impose strict liability for the cost of remediating releases of oil and for
damages caused by releases. The NU system currently carries general liability
insurance in the total amount of $160 million annual coverage, which includes
liability coverage for oil spills.

AIR QUALITY REQUIREMENTS

The Clean Air Act Amendments of 1990 (CAAA), as well as state laws in
Connecticut, Massachusetts and New Hampshire, impose stringent requirements on
emissions of sulfur dioxide (SO2) and nitrogen oxide (NOX) for the purpose of
controlling acid rain and ground level ozone. In addition, the CAAA address
the control of toxic air pollutants. Installation of continuous emissions
monitors and expanded permitting provisions also are included. Compliance with
CAAA requirements has cumulatively cost the NU system approximately $72 million
as of December 31, 2002: $11 million for CL&P, $55 million for PSNH, $1 million
for WMECO, and $5 million for HWP. In addition, PSNH expects to spend
approximately $3 million a year for SO2 allowances and approximately $3 million
for annual operational costs for NOX controls.

Massachusetts and New Hampshire are both imposing significant emission
reduction requirements on power plants, in addition to the Federal
requirements. The cost for Mt. Tom Station to meet current Massachusetts
emission limits is estimated to be approximately $7 million. Additional costs
for compliance with expected mercury limits are unknown at this time. In New
Hampshire, the emissions reduction Clear Air Bill was signed into law in May
2002. This law addresses emissions reductions of four pollutants. Oxides of
nitrogen, sulfur dioxide and carbon dioxide have their emission caps
established for current compliance beginning in 2007. The mercury emission cap
is expected to be set prior to July 1, 2005. Estimates for compliance
(excluding mercury control) are between $4 and $5 million dollars and will be
better known after the mercury reduction requirement is established.

HAZARDOUS MATERIALS REGULATIONS

As many other industrial companies have done in the past, the NU system
companies disposed of residues from operations by depositing or burying such
materials on-site or disposing of them at off-site landfills or facilities.
Typical materials disposed of include coal gasification waste, fuel oils, ash,
gasoline and other hazardous materials that might contain polychlorinated
biphenyls (PCBs). It has since been determined that deposited or buried
wastes, under certain circumstances, could cause groundwater contamination or
create other environmental risks. The NU system has recorded a liability for
what it believes is, based upon currently available information, its estimated
environmental remediation costs for waste disposal sites for which the NU
system companies expect to bear legal liability, and continues to evaluate the
environmental impact of its former disposal practices. Under federal and state
law, government agencies and private parties can attempt to impose liability on
NU system companies for such past disposal. At December 31, 2002, the
liability recorded by the NU system for its estimated environmental remediation
costs for known sites needing remediation, including those sites described
below, exclusive of recoveries from insurance or from third parties, was
approximately $42 million, representing 48 sites. This total includes
liabilities recorded by Yankee Gas of $19.5 million. All cost estimates were
made in accordance with generally accepted accounting principles where
remediation costs are probable and reasonably estimable. These costs could be
significantly higher if alternative remedies become necessary.
These liabilities break down as follows:

1. Under the federal Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, commonly known as Superfund, EPA has the
authority to clean up or order the clean up of hazardous waste sites and to
impose the clean up costs on parties deemed responsible for the hazardous waste
activities on the sites. Responsible parties include the current owner of a
site, past owners of a site at the time of waste disposal, waste transporters,
and waste generators. The NU system currently is involved in five Superfund
sites: one in Connecticut, one in New Jersey, two in New Hampshire and one in
Kentucky, which could have a material impact on the NU system. The NU system
has committed in the aggregate approximately $750,000 to its share of the clean
up of these sites. For further information on litigation relating to the
Connecticut site, see Item 3, "Legal Proceedings."

2. The greatest liabilities currently relate to former manufactured gas
plant (MGP) facilities which represent the largest share of future clean up
costs. These facilities were owned and operated by predecessor companies to
the NU system from the mid-1800's to mid-1900. Byproducts from the manufacture
of gas using coal resulted in fuel oils, hydrocarbons, coal tar, metals and
other waste products that may pose risks to human health and the environment.
The NU system currently has partial or full ownership responsibilities at 29
former MGP sites. Of the total NU system liabilities, $38.5 million has been
established to address future remediation costs at MGP sites.

3. Other sites undergoing comprehensive investigations or remedial
actions under state programs located in Connecticut, Massachusetts, New
Hampshire or New Jersey include two former fuel oil releases, two landfills,
two asbestos hazard abatement projects and nine miscellaneous projects. To
date, approximately $2.75 million has been established to address future
remediation costs at these sites.

In the past, the NU system has received other claims from government
agencies and third parties for the cost of remediating sites not currently
owned by the NU system but affected by past NU system disposal activities and
may receive more such claims in the future. The NU system expects that the
costs of resolving claims for remediating sites about which it has been
notified will not be material, but cannot estimate the costs with respect to
sites about which it has not been notified.

ELECTRIC AND MAGNETIC FIELDS

Published reports have discussed the possibility of adverse health effects
from electric and magnetic fields (EMF) associated with electric transmission
and distribution facilities and appliances and wiring in buildings and homes.
Most researchers, as well as numerous scientific review panels considering all
significant EMF epidemiological and laboratory studies to date, agree that
current information remains inconclusive, inconsistent and insufficient for
characterizing EMF as a health risk.

Based on this information, management does not believe that a causal
relationship between EMF exposure and adverse health effects has been
established or that significant capital expenditures are appropriate to
minimize unsubstantiated risks. The NU system companies have closely monitored
research and government policy developments for many years and will continue to
do so.

If further investigation were to demonstrate that the present electricity
delivery system is contributing to increased risk of cancer or other health
problems, the industry could be faced with the difficult problem of delivering
reliable electric service in a cost-effective manner while managing EMF
exposures. To date, no courts have concluded that individuals have been harmed
by EMF from electric utility facilities, but if utilities were to be found
liable for damages, the potential monetary exposure for all utilities,
including the NU system companies, could be enormous. Without definitive
scientific evidence of a causal relationship between EMF and health effects,
and without reliable information about the kinds of changes in utilities'
transmission and distribution systems that might be needed to address the
problem, if one is found, no estimates of the cost impacts of remedial actions
and liability awards are available.

FERC HYDROELECTRIC PROJECT LICENSING

New Federal Power Act licenses may be issued for hydroelectric projects
for terms of 30 to 50 years as determined by the FERC. Upon the expiration of
an existing license, (i) the FERC may issue a new license to the existing
licensee, or (ii) the United States may take over the project or the FERC may
issue a new license to a new licensee, upon payment to the existing licensee of
the lesser of the fair value or the net investment in the project, plus
severance damages, less certain amounts earned by the licensee in excess of a
reasonable rate of return.

The NU system companies currently hold FERC licenses for 11 hydroelectric
projects totaling 16 plants. In addition, the NU system companies own and
operate five unlicensed hydroelectric projects that are currently deemed non-
jurisdictional by FERC. These licensed and unlicensed hydroelectric projects
are located in Connecticut, Massachusetts and New Hampshire and aggregate
approximately 1,367 MW of capacity. CL&P's and WMECO's five licensed projects
and four unlicensed projects with approximately 1,302 MW of capacity were
transferred to NGC in March 2000. As part of the Restructuring Settlement,
PSNH has proposed to auction its seven hydroelectric projects (totaling nine
plants) with approximately 65 MW of capacity upon approval of the agreement.
Subsequently, the New Hampshire legislature deferred the sale of any PSNH
fossil or hydroelectric facilities until at least February 2004.

NGC's FERC licenses for operation of the Falls Village and Housatonic
hydroelectric projects expired in August 2001. Annual operating licenses allow
NGC to continue plant operations until new licenses are granted. NGC filed an
application for a new license which proposed to combine both projects under one
license, in August 1999. The Connecticut Department of Environmental
Protection (CDEP) has issued its Section 401 water quality certification for
the combined Housatonic River Project. A draft environmental impact statement
for the relicensing is anticipated in April 2003 and a final environmental
impact statement is expected in October 2003. A new license for the Housatonic
Project is likely to be issued in 2005. At this time, it is impossible to
determine the terms and conditions of any new license, or to predict the effect
of any terms and conditions on project economics.

PSNH's FERC license for the Merrimack River Hydroelectric Project that
consists of the Amoskeag, Hooksett and Garvins Falls hydroelectric generating
stations expires on December 31, 2005. In December 2000, PSNH filed a notice
of intent with the FERC stating its plan to file an application for a new
license by December 31, 2003. PSNH has begun formal consultations with federal
and state resource agencies, as well as non-governmental organizations and the
public. PSNH plans to file its final license application with the FERC no
later than December 31, 2003. The FERC's review of license applications
normally takes several years. If a new license is not issued by the expiration
of the current license (December 31, 2005), it is expected that FERC will issue
an annual license for the project. Annual licenses are commonly issued under
the same terms and conditions as the current license, but may include new
conditions if such conditions are authorized by the existing license.

Licensed operating hydroelectric projects are not generally subject to
decommissioning during the license term in the absence of a specific license
provision which expressly permits the FERC to order decommissioning during the
license term. However, the FERC has taken the position that under appropriate
circumstances it may order decommissioning of hydroelectric projects at
relicensing or may require the establishment of decommissioning trust funds as
a condition of relicensing. The FERC may also require project decommissioning
during a license term if a hydroelectric project is abandoned, the project
license is surrendered or the license is revoked.

At this time, it appears unlikely that the FERC will order decommissioning
of NGC or PSNH hydroelectric projects at relicensing or that the projects will
be abandoned, surrendered or the project licenses revoked. However, it is
impossible to predict the outcome of FERC relicensing proceedings with
certainty, or to determine the impact of future regulatory actions on project
economics. Until such time as a project is ordered to be decommissioned and
the terms and conditions of a decommissioning order are known, it is not
possible to accurately estimate or predict the cost of project decommissioning.

EMPLOYEES

As of December 31, 2002, the NU system companies had 6,561 employees on
their payrolls, excluding temporary employees, of which 2,098 were employed by
CL&P, 1,252 by PSNH, 398 by WMECO, 494 by Yankee Gas, 311 by NGS, 1,426 by
NUSCO, 141 by Select, 89 by SESI and 352 by SECI. NU, NGC, NAEC, Mode 1, NUEI
and Select Energy Portland Pipeline, Inc. have no employees.

In response to the reduced demand for certain services and the
increasingly competitive nature of their business environments, NGS and SESI
eliminated some of their service lines and reduced their workforce in other
parts of their businesses. As a result, during the second quarter of 2002,
SESI reduced its workforce by seven employees, during the third quarter of
2002, NGS reduced its workforce by 27 employees and during the fourth quarter
of 2002, Select Energy reduced its workforce by seven employees, at a total
cost of approximately $1.2 million.

On September 4, 2002, NU announced a reorganization of its administrative
and support-related functions to reflect the divestiture of most of its
generating facilities. On September 26, 2002, 142 full time equivalent
employees of NUSCO and PSNH were involuntarily terminated. Severance and other
costs related to the terminations were approximately $4.8 million.

In November 2001, CL&P announced a reorganization to reflect the
separation of regulated from competitive services and to refocus the
organization on distribution responsibilities. The reorganization began with
the selection of new officers in December 2001, with further selection
processes at subsequent management levels during the first quarter of 2002.
The majority of the costs associated with the reorganization is attributable to
restructuring in Connecticut and is not expected to impact earnings. In
connection with this process, 60 managerial and other employees of CL&P
participated in a voluntary reduction program in 2002, the costs of which were
approximately $8.1 million.

Approximately 2,329 employees of CL&P, PSNH, WMECO, HWP, NUSCO and Yankee
Gas are covered by 16 union agreements, three of which were in negotiation as
of the end of January 2003, and the remainder of which will expire between
September 1, 2004 and May 31, 2006.

ITEM 2. PROPERTIES

The physical properties of the NU system are owned or leased by
subsidiaries of NU. CL&P's properties are located either on land which is
owned in fee or on land, as to which CL&P owns perpetual occupancy rights
adequate to exclude all parties except possibly state and federal governments,
which has been reclaimed and filled pursuant to permits issued by the United
States Army Corps of Engineers. The principal properties of PSNH are held by
it in fee. In addition, PSNH leased space in an office building under a 30-
year lease which expired in March of 2002. In March of 2002, PSNH moved its
headquarters to a refurbished former PSNH generating station site. A major
portion of WMECO's properties are owned in fee. In 2002, NAEC sold its 35.98
percent interest in Seabrook. In addition, CL&P, PSNH and WMECO lease certain
data processing equipment, vehicles, and office space. Also CL&P and WMECO
lease certain substation equipment. With few exceptions, the NU system
companies' lines are located on or under streets or highways, or on properties
either owned or leased, or in which they have appropriate rights, easements,
licenses or permits from the owners or the appropriate governmental
authorities.

Yankee Gas' property consists primarily of its gas distribution facilities
including distribution lines (mains and services), meter, valves, pressure
regulators and flow controllers. Yankee Gas owns various propane facilities
with a combined storage capacity equivalent to approximately 245,000 Mcf.
Yankee Gas also owns service buildings in Meriden, Waterbury, Norwalk, and
Danielson, Connecticut. Yankee Gas rents buildings in Ansonia, Danbury and
Waterford, Connecticut, and leases a service building in East Windsor,
Connecticut, from an affiliate, NorConn. Yankee Gas' customer information
center is located in Wethersfield, Connecticut and its corporate headquarters
are located in Berlin, Connecticut.

CL&P, PSNH, NGC and Yankee Gas' properties are subject to the lien of each
company's respective first mortgage indentures. In addition, CL&P's interest
in transmission assets is subject to a second mortgage lien for the benefit of
the PCRBs. Various properties are also subject to minor encumbrances which do
not substantially impair the usefulness of the properties to the owning
company.

The NU system companies' properties are well maintained and are in good
operating condition.

TRANSMISSION AND DISTRIBUTION SYSTEM

At December 31, 2002, the NU system companies owned 105 transmission and
351 distribution substations that had an aggregate transformer capacity of
17,221,990 kilovoltamperes (kVa) and 9,077,962 kVa, respectively; 3,075 circuit
miles of overhead transmission lines ranging from 69 kilovolt (kV) to 345 kV,
and 196 cable miles of underground transmission lines ranging from 69 kV to 138
kV; 33,334 pole miles of overhead and 2,331 conduit bank miles of underground
distribution lines; and 433,588 line transformers in service with an aggregate
capacity of 18,990,000 kVa.

ELECTRIC GENERATING PLANTS

As of December 31, 2002, the electric generating plants of the NU system
companies and the NU system companies' entitlement in the generating plant of
VYNPC were as follows (See "Item 1. Business - Nuclear Generation" for
information on ownership and operating results for the year):

Claimed
Year Capability*
Owner Name of Plant (Location) Type Installed (kilowatts)
----- ------------------------ ---- --------- -----------

PSNH Total - Fossil-Steam Plants (6 units) 1952-74 986,805
Total - Hydro-Conventional (20 units) 1917-83 67,690
Total - Internal Combustion (5 units) 1968-70 102,792
---------
Total PSNH Generating Plant (31 units) 1,157,287
=========

HWP Total - Fossil-Steam Plants (1 unit) 1960 147,000
=========

NGC Total - Hydro-Conventional (36 units) 1903-55 157,930
Total - Hydro-Pumped (7 units) 1928-73 1,109,000
Storage
Total - Internal Combustion (1 unit) 1969 20,800
---------

Total NGC Generating Plant (44 units) 1,287,730
=========

NU System Total - Fossil-Steam Plants (7 units) 1952-74 1,133,805
Total - Hydro-Conventional (56 units) 1903-83 225,620
Total - Hydro-Pumped (7 units) 1928-73 1,109,000
Storage
Total - Internal Combustion (6 units) 1968-70 123,592
---------

Total NU System Generating Plant (76 units) 2,592,017
=========

*Claimed capability represents winter ratings as of December 31, 2002.

FRANCHISES

CL&P. Subject to the power of alteration, amendment or repeal by the
General Assembly of Connecticut and subject to certain approvals, permits and
consents of public authority and others prescribed by statute, CL&P has,
subject to certain exceptions not deemed material, valid franchises free from
burdensome restrictions to provide electric transmission and distribution
services in the respective areas in which it is now supplying such service.

In addition to the right to provide electric transmission and distribution
services as set forth above, the franchises of CL&P include, among others,
limited rights and powers, as set forth in Title 16 of the Connecticut General
Statutes and the special acts of the General Assembly constituting its charter,
to manufacture, generate, purchase and sell electricity at retail, including to
provide standard offer, backup, and default service, to sell electricity at
wholesale to other utility companies and municipalities and to erect and
maintain certain facilities on public highways and grounds, all subject to such
consents and approvals of public authority and others as may be required by
law. The franchises of CL&P include the power of eminent domain.

PSNH. The NHPUC, pursuant to statutory requirement, has issued orders
granting PSNH exclusive franchises free from burdensome restrictions to
distribute electricity in the respective areas in which it is now supplying
such service.

In addition to the right to distribute electricity as set forth above, the
franchises of PSNH include, among others, rights and powers to manufacture,
generate, purchase, and transmit electricity, to sell electricity at wholesale
to other utility companies and municipalities and to erect and maintain certain
facilities on certain public highways and grounds, all subject to such consents
and approvals of public authority and others as may be required by law. The
franchises of PSNH include the power of eminent domain.

NNECO. Subject to the power of alteration, amendment or repeal by the
General Assembly of Connecticut and subject to certain approvals, permits and
consents of public authority and others prescribed by statute, NNECO has a
valid franchise free from burdensome restrictions to sell electricity to
utility companies doing an electric business in Connecticut and other states.

In addition to the right to sell electricity as set forth above, the
franchise of NNECO includes, among others, rights and powers to manufacture,
generate and transmit electricity, and to erect and maintain facilities on
certain public highways and grounds, all subject to such consents and approvals
of public authority and others as may be required by law. With the sale of the
Millstone in 2001, NNECO is inactive except for minor transactions associated
with post-sale matters.

WMECO. WMECO is authorized by its charter to conduct its electric
business in the territories served by it, and has locations in the public
highways for transmission and distribution lines. Such locations are granted
pursuant to the laws of Massachusetts by the Department of Public Works of
Massachusetts or local municipal authorities and are of unlimited duration, but
the rights thereby granted are not vested. Such locations are for specific
lines only, and, for extensions of lines in public highways, further similar
locations must be obtained from the Department of Public Works of Massachusetts
or the local municipal authorities. In addition, WMECO has been granted
easements for its lines in the Massachusetts Turnpike by the Massachusetts
Turnpike Authority.

Pursuant to the Massachusetts restructuring legislation, the DTE is
required to define service territories for each distribution company, including
WMECO, based on the service territories actually served on July 1, 1997, and
following municipal boundaries to the extent possible. The DTE has not yet
defined service territories. After these service territories are established
by the DTE, until they are terminated by effect of law or otherwise, the
distribution company shall have the exclusive obligation to provide
distribution service to all retail customers within its service territory, and
no other person shall provide distribution service within such service
territory without the written consent of such distribution company.

HWP and Holyoke Power and Electric Company (HP&E). HWP, and its wholly
owned subsidiary HP&E, are authorized by their charters to conduct their
businesses in the territories served by them. HWP's electric business is
subject to the restriction that sales be made by written contract in amounts of
not less than 100 horsepower to purchasers who use the electricity in their own
business in the counties of Hampden or Hampshire, Massachusetts and cities and
towns in these counties, and customers who occupy property in which HWP has a
financial interest, by ownership or purchase money mortgage. The two companies
have locations in the public highways for their transmission and distribution
lines. Such locations are granted pursuant to the laws of Massachusetts by the
Department of Public Works of Massachusetts or local municipal authorities and
are of unlimited duration, but the rights thereby granted are not vested. Such
locations are for specific lines only and, for extensions of lines in public
highways, further similar locations must be obtained from the Department of
Public Works of Massachusetts or the local municipal authorities. HP&E has no
retail service territory area and sells electric power exclusively at
wholesale. In connection with the sale of certain of HWP's and HP&E's assets
to the city of Holyoke Gas and Electric Department (HG&E) effective December
2001, HWP agreed to cause the charters of HWP and HP&E to be amended to
eliminate their rights to distribute electricity at retail in Holyoke and
surrounding towns unless other sellers can legally compete with HG&E, and not
to exercise such rights prior to such amendment.

NGC. NGC is an exempt wholesale generator and, as it currently operates
its business, is not regulated by the DPUC or the DTE. FERC's authorization
for exempt wholesale generators such as NGC (EWG) to sell wholesale electric
power at market-based rates typically contains an exemption from much of the
traditional public utility company rate regulation. As an EWG, NGC is a
"public utility" subject to the Federal Power Act. The market-based rate
authorization that NGC has received from FERC exempts NGC from some, but not
all, of Federal Power Act regulations, including traditional cost-based rate
regulation. However, NGC is required to file summary information concerning
its power transactions on a quarterly basis with FERC.

Yankee Gas. Yankee Gas and its predecessors in interest hold valid
franchises to sell gas in the areas in which Yankee Gas supplies gas service.
Generally, Yankee Gas holds franchises to serve customers throughout
Connecticut, so long as the area is not served by another gas utility. Such
franchises are perpetual but remain subject to the power of alteration,
amendment or repeal by the General Assembly of the State of Connecticut, the
power of revocation by the DPUC and certain approvals, permits and consents of
public authorities and others prescribed by statute. Yankee Gas' franchises
include, among other rights and powers, rights and powers to manufacture,
generate, purchase, transmit and distribute gas, to sell gas at wholesale to
other utility companies and municipalities and to erect and maintain certain
facilities on public highways and grounds, all subject to such consents and
approvals of public authorities and others as may be required by law. The
franchises include the power of eminent domain.

ITEM 3. LEGAL PROCEEDINGS

1. Con Edison, Inc. v. NU - Merger Appeals and Related Litigation

On October 13, 1999, Consolidated Edison, Inc. (Con Edison) and NU entered
into an Agreement and Plan of Merger (as amended and restated as of January 11,
2001, the Merger Agreement), providing for the acquisition of NU by Con Edison,
subject to the approval of various state and federal regulatory agencies.

On March 5, 2001, Con Edison advised NU that it was unwilling to close its
merger with NU on the terms set forth in the Merger Agreement. That same day,
NU notified Con Edison that it would treat Con Edison's refusal to proceed with
the merger as a repudiation and breach of the Merger Agreement and would file
suit to obtain the benefits of the transaction for NU shareholders. On
March 6, 2001, Con Edison filed suit in the United States District Court for
the Southern District of New York (the District Court) seeking a declaratory
judgment that it had been relieved of its obligation to proceed with the merger
due to, among other things, NU's alleged breach of the Merger Agreement and the
alleged occurrence of a "Material Adverse Change" with respect to NU, as that
term is defined in the Merger Agreement. On March 12, 2001, NU filed suit
against Con Edison in the District Court seeking to recover monetary damages
arising from Con Edison's breach of the Merger Agreement including, but not
limited to, the amount of the acquisition premium (estimated to be $1.2
billion) together with interest at the rate established by law (9 percent).

On May 11, 2001, in accordance with a stipulation of the parties and order
of the District Court, Con Edison filed an amended complaint in which it added
claims seeking damages for breach of contract, fraudulent inducement and
negligent misrepresentation. Con Edison has claimed that it is entitled to
recover 82 percent of the synergy savings estimated by the parties to have been
achievable over ten years following consummation of the merger. Con Edison
contends that these estimated synergies totaled $1.754 billion and have a
present value of $707 million. NU contends that Con Edison is not entitled to
any damages as a matter of law.

On June 1, 2001, NU answered Con Edison's amended complaint, denying all
of its material allegations and asserting affirmative defenses, and asserted a
counterclaim seeking to recover monetary damages as described above against Con
Edison for breach of the Merger Agreement. NU subsequently dismissed its
March 12 complaint, without prejudice, since it was duplicative of the June 1
counterclaim. On June 8, 2001, Con Edison answered NU's counterclaim, denying
its material allegations and asserting affirmative defenses.

In addition, separate petitions were filed with the DPUC asking that its
merger approval be rescinded or reversed. The DPUC reopened its docket
approving the merger and asked parties to comment on the question of whether a
date certain should be imposed for consummation of the merger and whether that
date should be January 31, 2002. On January 30, 2002, the DPUC issued a
decision establishing January 31, 2002 as the deadline for merger consummation.

The companies completed discovery in the litigation and submitted cross
motions for summary judgment. The District Court has denied Con Edison's
motion in its entirety, leaving intact NU's claim for breach of the Merger
Agreement and has partially granted NU's motion for summary judgment by
eliminating Con Edison's claims against NU for fraud and negligent
misrepresentation. No trial date has been set. At this stage of the
litigation, management can predict neither the outcome of this matter nor its
ultimate effect on NU.

2. Millstone - Damage to Fish Population Lawsuits

On April 20, 2000, two fishermen, Aldred Madeira, Jr. and Timothy F.
Madieros, brought a lawsuit against NNECO and NUSCO in New London Superior
Court alleging two counts: common law nuisance and tortious interference with
a business expectancy. DNCI has since been added as an additional defendant.
The lawsuit alleges that Millstone has engaged in various actions, including
entrainment of winter flounder, that have caused the two fishermen to suffer
damages. The suit initially sought temporary and permanent injunctions to
suspend Millstone operations during the winter flounder spawning season,
conversion of Millstone to a closed-cooling system, or in the alternative,
permanent shutdown, as well as compensatory and punitive damages. However, the
injunctive relief claims were dismissed by the Court on March 11, 2002.

On August 23, 2001, two additional fishermen, James Engelmann and Michael
Stepski, brought a lawsuit similar to the Madeira and Madieros action against
NNECO, NUSCO and DNCI in Superior Court alleging two counts: common law
nuisance and tortious interference with a business expectancy. Like the
earlier suit, plaintiffs' injunctive relief claims have been dismissed.

On December 16, 2002, the court heard argument on defendants' motion to
strike both counts of the second revised complaint. A decision is pending. On
February 24, 2003, the court denied plaintiffs' motion to amend the complaint
to add a claim for violation of the Connecticut Unfair Trade Purchase Act.

On April 26, 2000, another lawsuit was filed in Connecticut Superior Court
against NUSCO, NNECO and the Commissioner of the CDEP challenging the validity
of previously issued CDEP emergency and temporary authorizations allowing
Millstone to discharge wastewater not expressly authorized by the facility's
NPDES permit. The suit sought a temporary and permanent injunction against
operations at Millstone 1, 2 and 3. On August 30, 2000, NNECO filed a motion
to dismiss, and on October 16, 2000, NNECO's motion was granted. On
November 22, 2000, the Connecticut Coalition Against Millstone (CCAM) and the
Long Island Coalition Against Millstone filed an appeal with the Connecticut
Appellate Court. Subsequently, on May 3, 2002, NNECO and NUSCO filed a motion
to dismiss the appeal on the grounds of mootness. On June 26, 2002, this
motion was granted and the appeal dismissed. On November 6, 2002, plantiffs'
petition to the Connecticut Supreme Court for certification to appeal this
matter further was denied. This matter is now considered closed.

3. Sale of Millstone to DNCI

On February 20, 2001, the CCAM filed in Connecticut Superior Court an
appeal of the DPUC's decision approving the sale of Millstone to DNCI. CCAM
alleges that the final decision violates the Connecticut general statutes on
multiple grounds and requests that the decision be reversed and vacated. On
March 26, 2001, CCAM's appeal was dismissed. On April 16, 2001, plaintiffs
filed an appeal with the Connecticut Appellate Court. On February 21, 2002,
the court dismissed CCAM's appeal.

On March 8, 2001, CCAM and other parties also filed a lawsuit in
Connecticut Superior Court against the CDEP, NNECO and DNCI challenging (1) the
validity of Millstone's NPDES permit (Permit) and a previously issued CDEP
emergency authorization allowing Millstone to discharge wastewater not
expressly authorized by the facility's Permit, and (2) CDEP's authority to
transfer both Millstone's permit and emergency authorization to DNCI. On March
29, 2001, CCAM's request for a temporary restraining order enjoining CDEP from
transferring both the Permit and emergency authorization to DNCI prior to a
full hearing was denied. Subsequently, on July 19, 2001, the entire matter was
dismissed. On September 20, 2002, the Connecticut Supreme Court assigned the
matter to itself. The suit has not yet been scheduled for oral argument.

4. FERC - Installed Capability (ICAP) Deficiency Charge

In July 2001, NU filed an appeal of the FERC orders imposing a $0.17 per
kilowatt-month ICAP charge rate from August 1, 2000 to April 1, 2001. In
December 2001, FERC denied rehearing its order allowing the $0.17 rate during
the court stay period, April through August 2001. NU appealed this decision to
the First Circuit Court of Appeals (First Circuit) and on October 4, 2002, the
First Circuit denied the appeal.

In its December 3, 2001 report on alternatives to the ICAP requirement,
ISO-New England proposed an interim advance ICAP purchase requirement but
indicated that other ICAP improvements would be implemented with SMD (scheduled
for late 2002 or early 2003) and that it intended to develop a forward reserves
market thereafter. The ISO's interim advance purchase requirement proposal was
filed with FERC in late December 2001. Subsequently, ISO-New England published
the results of its study on the cost of new peaking units in New England which
suggests that the level of a cost based ICAP deficiency charge would be $6.15
rather than $4.87.

5. Retirement Plan Litigation

This matter involves four separate but related federal court lawsuits by
nineteen former employees of NUSCO, WMECO and CL&P who retired between 1991 and
1994. The complaints generally allege that the Company breached its fiduciary
duties to the plaintiffs by making affirmative misrepresentations that caused
them to retire prematurely, since as a result of these alleged
misrepresentations they came to believe incorrectly that no particular future
enhancement of employee benefits was being seriously considered at the time by
the Company.

The cases were tried together in a summary bench trial in the United
States District Court in Hartford, Connecticut in April-May 2002; post-trial
briefs have been filed and the parties are awaiting the judge's decision.

6. HP&E

In July of 1998, HP&E entered into a contract with Bridgeport Energy, LLC
(Bridgeport), a subsidiary of Duke Energy, to purchase ICAP at a rate of $3.125
per kilowatt per month through April 30, 2004. This contract was subsequently
assigned to Select Energy. The contract contains a clause that allowed either
party to terminate the contract upon 30 days prior notice if FERC, NEPOOL or
ISO-New England (1) eliminates ICAP or (2) makes material changes to ICAP that
materially adversely affect the parties and such changes can't be resolved
through negotiation.

When ISO-New England filed with FERC in May 2000 to eliminate the ICAP
product, Select Energy sought to terminate the contract. Pending the
resolution of the ICAP issues at FERC and in court, the parties entered into a
series of agreements to preserve their rights to argue whether the contract
should be terminated, during which time Bridgeport continued to supply, and
Select Energy continued to pay for, the ICAP. In June 2001, Select Energy
discontinued purchasing the ICAP from Bridgeport. In July 2001, Select Energy
filed a complaint in Connecticut Superior Court, requesting the court to
declare that the contract was terminated as of June 2000, asking for an order
that the contract was effectively terminated in June 2000 and requesting
damages for the above-market portion of its payment. Bridgeport filed a
complaint in Connecticut Superior Court shortly thereafter, alleging that
Select Energy is in default under the contract and owes damages from June of
2000 through the remainder of the term of the contract. A settlement in this
matter was reached on November 12, 2002.

7. Wisvest-Connecticut, LLC (Wisvest) v. Select Energy

Wisvest filed suit in July 2002 against Select Energy in the Superior
Court at New Britain, Connecticut. In its complaint, Wisvest alleges that
Select Energy breached its Load Asset Contract for Electrical Load dated
November 23, 1999 (the Agreement) by unilaterally reducing the amount of
electricity it proposed to purchase from Wisvest. Wisvest alleged that the
Agreement obligated Select Energy to purchase from Wisvest 11.5 percent of the
CL&P Standard Offer Service Load (Load) during the term of the Agreement, but
that in February 2002 it unilaterally announced that it would thereafter
purchase only 9.4 percent of the CL&P Load. The complaint seeks monetary
damages and a declaratory judgment declaring that Select Energy has no right to
unilaterally alter its obligation to receive and purchase 11.5 percent of the
CL&P Load.

Select Energy has filed an Answer to the complaint, denying any liability.
It has also filed several special defenses and counterclaims. No trial date
has been set.

8. NRG - Credit Rating Status

Recent changes in the credit status of NRG have impacted the contractual
relationships between NRG and CL&P, Yankee Gas and Select Energy. On July 26
and 29, 2002, the three major ratings agencies lowered the ratings of NRG to
below investment grade. Concurrently, the potential, but now postponed,
deactivation of NRG owned generating units in the state of Connecticut further
called into question NRG's financial viability and the long term availability
of power to serve CL&P's standard offer customers. On September 16, 2002, NRG
announced its failure to meet a September 13, 2002 deadline by which it was to
post collateral in excess of $1 billion and that it had not made payments on
certain debt issues dues on September 16, 2002. On November 22, 2002, an
involuntary bankruptcy case was filed against NRG by seven former NRG
executives. A proposed settlement between NRG and the former executives is
scheduled for hearing on March 27, 2003 and objections to the dismissal of the
case pursuant to the settlement must be filed on or before March 20, 2003. In
addition, on February 27, 2003, lenders under a revolving credit agreement
accelerated the repayment of $1 billion of NRG debt. On February 28, 2003, two
NRG creditors filed to join the pending involuntary case.

Yankee Gas

On November 12, 2002, NRG affiliate Meriden Gas Turbines, LLC (MGT) filed
suit against Yankee Gas in Superior Court in Meriden, Connecticut. MGT claims,
among other things, that Yankee Gas breached its obligations under a
transportation, construction and interconnection service agreement (MGT
Agreement) entered into in December 2001 in connection with a Meriden power
plant project. MGT seeks a declaratory ruling from the court that Yankee Gas
was not entitled to draw down a $16 million letter of credit issued in its
favor in connection with the MGT Agreement. Yankee Gas intends to defend this
case vigorously and will file a response to the complaint early in 2003.

CL&P

On December 20, 2002, FERC issued an order in connection with a dispute
between CL&P and NRG concerning the provision of station service to Connecticut
generating plants purchased from CL&P by NRG affiliates in December 1999. CL&P
filed a complaint at FERC seeking interpretation of a FERC-filed
interconnection agreement in which NRG agreed to pay CL&P's applicable retail
rates for station service power (if procured from CL&P) and delivery of such
power (whether procured from CL&P or a third party supplier). FERC further
affirmed the language in its Order 888 concerning state jurisdiction over the
delivery of power to end users, even in the absence of distribution facilities,
and the state's authority to impose certain charges on end users, such as those
associated with stranded cost recovery. CL&P has made a demand upon NRG for
payment of $13.3 million in station service charges through January 2003 and is
preparing to take any steps necessary to collect the unpaid balance.

Select Energy

Select Energy, also concerned about NRG's solvency and ability to continue
to meet the terms of its contracts, terminated its contractual relationships
with NRG and its affiliates on August 15, 2002 as a result of NRG's failure to
provide adequate financial assurances. Subsequent to this date, Select Energy
calculated its damages and forwarded final payment to NRG. On November 1,
2002, Select Energy received NRG's protest to Select Energy's calculation of
damages, to which Select Energy responded that its calculations were in accord
with the underlying contracts.

9. Enron Power Marketing, Inc. (Enron)/Select Energy

On January 13, 2003, Select Energy received notice from the United States
Bankruptcy Court of an adverse proceeding filed by Enron against Select Energy
for approximately $2.5 million. In its complaint, Enron alleges that Select
Energy improperly set off pre-petition debt arising from the termination of
transactions entered into under a power purchase agreement between Select
Energy and Enron against post-petition amounts owed for deliveries of power
under transactions entered into under the same agreement. On February 19,
2003, in substitution of an answer to the complaint, Select Energy filed a
motion for relief from the automatic stay and to compel arbitration, or,
alternatively, to dismiss. On March 4, 2003, the Court issued an order
directing mediation of all adversary proceedings involving trading agreements,
including those of Select Energy, and further stayed all pending motions
seeking to modify the automatic stay in order to seek arbitration. In
accordance with the Court's Order, Select Energy filed a brief summary of the
essential issues in its proceedings with the mediation judge and subsequently
participated in the initial mediation conference on March 12, 2003.

10. Hawkins, Delafield & Wood (Hawkins) v. NU, NUSCO and CL&P

On December 12, 2002, Hawkins, a New York law firm sued by the Connecticut
Resources Recovery Authority (CRRA) as a result of the Enron bankruptcy,
brought an apportionment complaint against a number of former Enron officers,
directors and outside accountants. In addition to the Enron defendants,
Hawkins also named as defendants in its complaint NU, NUSCO and CL&P. Hawkins
asserts in its complaint that in the event it is found liable to CRRA, then the
apportionment defendants, including NU, NUSCO and CL&P, are responsible for
some or all of the $220 million claimed as damages. The NU defendants will
file their appearance in the case by January 28, 2003, and will file a response
to the complaint, in the form of a pre-answer dispositive motion, on or before
February 27, 2003.

The case is proceeding along three broad tracks: (a) an attempt by
various defendants to persuade the Multi-District Litigation (MDL) Judicial
Panel to transfer the case to the United States District Court for the Southern
District of Texas; (b) an attempt to consolidate this case with a case now
pending, which itself is subject to a conditional order of the MDL Panel
transferring it to the Southern District of Texas; and (c) an attempt to remand
this case to Connecticut's state court. No further action in this case is
anticipated until the MDL Panel rules, as the United States District Court
judge has stayed all proceedings pending such ruling. The NU defendants had
not yet responded to the apportionment complaint at the time the proceedings
were stayed.

11. Environmental Litigation

On September 25, 2002, NUSCO, among other defendants, was sued by the
Joseph A. Schiavone Corporation (Schiavone) under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 for the costs
associated with the investigation and remediation of a commercial property
owned by Schiavone in North Haven, Connecticut. Schiavone alleges that from
1968 through 1978, NUSCO sold transformers containing PCBs to a company named
H. Kasden & Sons, a co-defendant, which owned the property before Schiavone and
operated a scrap yard at the site. The property is currently involved in an
EPA and CDEP monitored investigation and remediation of PCB contamination and
related costs are estimated at approximately $4 million.

NUSCO has answered the complaint denying the material allegations.
Discovery will commence in January. After a status conference held on
February 13, 2003, a United States Magistrate entered a case management plan
and ordered the parties to report back by March 13, 2003 regarding settlement
potential.

12. Other Legal Proceedings

The following sections of Item 1, "Business" discuss additional legal
proceedings: See "Rates and Electric Industry Restructuring" for information
about various state restructuring proceedings and civil lawsuits related
thereto and the implementation of SMD; "Regulated Electric Operations" and
"Regulated Gas Operations" for information about proceedings relating to power,
transmission and pricing issues; "Regulated Electric Operations - Nuclear
Generation" for information related to nuclear plant performance, nuclear fuel
enrichment pricing, high-level and low-level radioactive waste disposal,
decommissioning matters, and NRC regulation; "Other Regulatory and
Environmental Matters" for information about proceedings involving surface
water and air quality, toxic substances and hazardous waste, EMF, licensing of
hydroelectric projects, and other matters.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No event that would be described in response to this item occurred with
respect to NU, PSNH or WMECO.

CL&P. In a written Consent in Lieu of a Special Meeting of Stockholders
of CL&P (Company) (Consent) dated October 25, 2002, the stockholders voted to
sell the Company's ownership interest in the Seabrook Nuclear Power Station
(Seabrook) pursuant to that Purchase and Sale Agreement dated April 13, 2002
(Agreement) by and among the Company, certain other owners of Seabrook, North
Atlantic Energy Service Corporation, and the buyer, FPL Energy Seabrook, LLC
(Buyer), in consideration of the total purchase price of $836,610,000, subject
to adjustment as provided in the Agreement. The vote authorizing the sale was
6,035,205 shares in favor, representing 100 percent of the issued and
outstanding shares of common stock of CL&P.

PART II

ITEM 5. MARKET FOR THE REGISTRANTS' COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

NU. The common shares of NU are listed on the New York Stock Exchange.
The ticker symbol is "NU," although it is frequently presented as "Noeast Util"
and/or "NE Util" in various financial publications. The high and low closing
sales prices for the past two years, by quarters, are shown below.

Year Quarter High Low
---- ------- ---- ---

2002 First $19.87 $17.61
Second 20.57 18.05
Third 18.45 13.84
Fourth 16.97 13.20

2001 First $23.56 $16.80
Second 20.75 17.35
Third 20.79 18.30
Fourth 19.25 16.95

As of January 31, 2003, there were 65,176 common shareholders of record of
NU. As of the same date, there were a total of 131,161,040 common shares
issued, including 3,755,714 unallocated Employee Stock Ownership Plan (ESOP)
shares held in the ESOP trust.

On January 13, 2003, the NU Board of Trustees approved the payment of a
13.75 cent per share dividend, payable on March 31, 2003, to shareholders of
record as of March 1, 2003.

On January 8, 2002, the NU Board of Trustees approved the payment of a
12.5 cent per share dividend, payable on March 29, 2002, to shareholders of
record as of March 1, 2002.

On April 19, 2002, the NU Board of Trustees approved the payment of a 12.5
cent per share dividend, payable on June 28, 2002, to shareholders of record as
of June 1, 2002.

On May 14, 2002, the NU Board of Trustees approved the payment of a 13.75
cent per share dividend, payable on September 30, 2002, to shareholders of
record as of September 1, 2002.

On October 8, 2002, the NU Board of Trustees approved the payment of a
13.75 cent per share dividend, payable on December 31, 2002, to shareholders of
record as of December 1, 2002.

On January 9, 2001, the NU Board of Trustees approved the payment of a 10
cent per share dividend, payable on March 31, 2001, to shareholders of record
as of March 1, 2001.

On April 9, 2001, the NU Board of Trustees approved the payment of a 10
cent per share dividend, payable on June 29, 2001, to shareholders of record as
of June 1, 2001.

On June 28, 2001, the NU Board of Trustees approved the payment of a 12.5
cent per share dividend, payable on September 28, 2001, to shareholders of
record as of September 1, 2001.

On October 9, 2001, the NU Board of Trustees approved the payment of a
12.5 cent per share dividend, payable on December 31, 2001, to shareholders of
record as of December 1, 2001.

Information with respect to dividend restrictions for NU and its
subsidiaries is contained in Item 1. Business under the caption "Financing
Program - Financing Limitations" and in Note (a) to the "Consolidated
Statements of Shareholders' Equity" on page 37 of NU's 2002 Annual Report to
Shareholders, which information is incorporated herein by reference.

CL&P, PSNH and WMECO. There is no established public trading market for
the common stock of CL&P, PSNH and WMECO. The common stock of CL&P, PSNH and
WMECO is held solely by NU.

During 2002 and 2001, CL&P approved and paid approximately $60.1 million
of common stock dividends to NU.

During 2002 and 2001, PSNH approved and paid approximately $45 million and
$27 million of common stock dividends, respectively, to NU.

During 2002 and 2001, WMECO approved and paid approximately $16 million
and $22 million of common stock dividends, respectively, to NU.

ITEM 6. SELECTED FINANCIAL DATA

NU. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on page 63 of NU's 2002 Annual Report to
Shareholders, which information is incorporated herein by reference.

CL&P. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on page 25 of CL&P's 2002 Annual Report,
which information is incorporated herein by reference.

PSNH. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on page 24 of PSNH's 2002 Annual Report,
which information is incorporated herein by reference.

WMECO. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on page 22 of WMECO's 2002 Annual
Report, which information is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS;

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NU. Reference is made to information under the heading "Management's
Discussion and Analysis and Results of Operations" and Note 3, "Derivative
Instruments, Market Risk and Risk Management," contained on pages 15 through 31
and pages 47 through 49, respectively, of NU's 2002 Annual Report to
Shareholders, which information is incorporated herein by reference.

CL&P. Reference is made to information under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained on pages 1 through 8 of CL&P's 2002 Annual Report, which information
is incorporated herein by reference.

PSNH. Reference is made to information under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained on pages 1 through 7 of PSNH's 2002 Annual Report, which information
is incorporated herein by reference.

WMECO. Reference is made to information under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained on pages 1 through 6 of WMECO's 2002 Annual Report, which information
is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

NU. Reference is made to information under the headings "Company Report,"
"Independent Auditor's Report," "Report of Independent Public Accountants,"
"Consolidated Balance Sheets," "Consolidated Statements of Income,"
"Consolidated Statements of Comprehensive Income," "Consolidated Statements of
Shareholders' Equity," "Consolidated Statements of Cash Flows," "Consolidated
Statements of Capitalization," "Consolidated Statements of Income Taxes,"
"Notes to Consolidated Financial Statements," and "Consolidated Statements of
Quarterly Financial Data" contained on pages 32 through 62 of NU's 2002 Annual
Report to Shareholders, which information is incorporated herein by reference.

CL&P. Reference is made to information under the headings "Independent
Auditor's Report," "Report of Independent Public Accountants," "Consolidated
Balance Sheets," "Consolidated Statements of Income," "Consolidated Statements
of Comprehensive Income," "Consolidated Statements of Common Stockholder's
Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated
Financial Statements," and "Consolidated Quarterly Financial Data" contained on
pages 9 through 25 of CL&P's 2002 Annual Report, which information is
incorporated herein by reference.

PSNH. Reference is made to information under the headings "Independent
Auditor's Report," "Report of Independent Public Accountants," "Consolidated
Balance Sheets," "Consolidated Statements of Income," "Consolidated Statements
of Comprehensive Income," "Consolidated Statements of Common Stockholder's
Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated
Financial Statements," and "Consolidated Quarterly Financial Data" contained on
pages 8 through 24 of PSNH's 2002 Annual Report, which information is
incorporated herein by reference.

WMECO. Reference is made to information under the headings "Independent
Auditor's Report," "Report of Independent Public Accountants," "Consolidated
Balance Sheets," "Consolidated Statements of Income," "Consolidated Statements
of Comprehensive Income," "Consolidated Statements of Common Stockholder's
Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated
Financial Statements," and "Consolidated Quarterly Financial Data" contained on
pages 7 through 22 of WMECO's 2002 Annual Report, which information is
incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

No unreported event that would be described in response to this item has
occurred with respect to NU, CL&P, PSNH or WMECO.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS

NU.

In addition to the information provided below concerning the executive
officers of NU, incorporated herein by reference is the information contained
in the sections "Proxy Statement", "Election of Trustees", "Board Committees
and Responsibilities", and "Section 16(a) Beneficial Ownership Reporting
Compliance", of the definitive proxy statement for solicitation of proxies by
NU's Board of Trustees, dated March 27, 2003, which will be filed with the
Commission pursuant to Rule 14a-6 under the Securities Exchange Act of 1934.

Positions
Name Held
- ------------------------ ---------

Gregory B. Butler (*) VP, SEC, GC
John H. Forsgren (*) EVP, CFO, VC, T
Cheryl W. Grise (*) P
Bruce D. Kenyon (*)(**) P
Michael G. Morris (*) CHB, P, CEO, T
Charles W. Shivery (*) P

CL&P.

Positions
Name Held
- ------------------------ ---------

David H. Boguslawski VP, D
Gregory B. Butler (*) OTH
John H. Forsgren (*) OTH
Cheryl W. Grise (*) CEO, D
Michael G. Morris (*) OTH
Leon J. Olivier (*) P, COO, D

PSNH.

Positions
Name Held
- ------------------------ ---------

David H. Boguslawski VP, D
Gregory B. Butler (*) OTH
John C. Collins (***) D
John H. Forsgren (*) OTH, D
Cheryl W. Grise (*) CEO, D
Gerald Letendre (***) D
Gary A. Long (*) P, COO, D
Michael G. Morris (*) CH, D
Jane E. Newman (***) D

WMECO.

Positions
Name Held
- ------------------------ ---------

David H. Boguslawski VP, D
Gregory B. Butler (*) OTH
James E. Byrne (***) D
John H. Forsgren (*) OTH, D
Cheryl W. Grise (*) CEO, D
Kerry J. Kuhlman (*) P, COO, D
Paul J. McDonald (***) D
Michael G. Morris (*) CH, D
Melinda M. Phelps (***) D

* Executive Officer
** Retired as of the close of business on December 31, 2002.
*** Resigned as of the close of business on December 31, 2002.

Key:
CEO - Chief Executive Officer OTH - Executive Officer of
CFO - Chief Financial Officer Registrant because of policy-
CH - Chairman making function for NU system
CHB - Chairman of the Board P - President
COO - Chief Operating Officer SEC - Secretary
D - Director SVP - Senior Vice President
EVP - Executive Vice President T - Trustee
GC - General Counsel VP - Vice President
VC - Vice Chairman

Name Age Business Experience During Past 5 Years
- ----------------------- --- ---------------------------------------

David H. Boguslawski 48 Vice President - Transmission Business of
CL&P, PSNH and WMECO since May 1, 2001 and a
Director of CL&P, PSNH and WMECO since June 30,
1999; previously Vice President - Energy Delivery
of CL&P, PSNH and WMECO from September 1996 to
May 2001.

Gregory B. Butler 45 Vice President, Secretary and General
Counsel of NU since May 1, 2001 and a Director of
Northeast Utilities Foundation, Inc. since
December 1, 2002; previously Vice President-
Governmental Affairs of NUSCO from January 1997
to May 2001; Vice President of Federal Affairs at
New England Electric System from January 1995 to
December 1996; and senior counsel for Niagara
Mohawk Power Corporation from December 1992 to
January 1995.

James E. Byrne 48 Partner, Finneran, Byrne & Dreshsler,
L.L.P., since 1982. Director of WMECO from
September 1999 through December 2002.

John C. Collins (1) 57 Chief Executive Officer, Dartmouth-
Hitchcock Clinic, Dartmouth-Hitchcock Medical
Center since 1977. Director of PSNH from October
1992 through December 2002.

John H. Forsgren (2) 56 Vice Chairman of NU since May 1, 2001;
Executive Vice President and Chief Financial
Officer of NU since February 1, 1996; Executive
Vice President and Chief Financial Officer of
CL&P, PSNH, and WMECO since February 27, 2003 and
from February 1996 to June 1999; Director of
WMECO since June 10, 1996 and of PSNH since
August 5, 1996 and a Director of Northeast
Utilities Foundation, Inc. since September 23,
1998; Director of CL&P from June 1996 to June
1999.

Cheryl W. Grise (3) 50 President - Utility Group of NU since
May 2001, Chief Executive Officer of CL&P, PSNH
and WMECO since September 10, 2002 a Director of
CL&P since May 1, 2001, PSNH since May 14, 2001
and WMECO since June 2001, and a Director of
Northeast Utilities Foundation, Inc. since
September 23, 1998; previously President of CL&P
from May 2001 to September 2001, Senior Vice
President, Secretary and General Counsel of NU
from July 1998 to May 2001, Senior Vice
President, Secretary and General Counsel of CL&P,
and PSNH and Senior Vice President, Secretary,
Assistant Clerk and General Counsel of WMECO from
July 1998 to June 1999 and Senior Vice President,
Secretary and General Counsel of NGC from January
1999 to June 1999; previously Director of CL&P
and WMECO (January 1994 through November 1997)
and PSNH (February 1995 through November 1997);
Senior Vice President and Chief Administrative
Officer of CL&P and PSNH, and Senior Vice
President of WMECO from 1995 to 1998.

Bruce D. Kenyon 60 Retired January 1, 2003; previously
President-Generation Group of NU from March 1999
through December 2002 and a Director of Northeast
Utilities Foundation, Inc. from September 1998
through December 2002; President-Generation Group
of CL&P, PSNH and WMECO from March 1999 to June
1999; President-Nuclear Group of NU, CL&P, PSNH
and WMECO from September 1996 to March 1999, a
Director of CL&P and WMECO from September 1996 to
June 1999, and a Director of PSNH from November
1997 to June 1999.

Kerry J. Kuhlman 52 President and Chief Operating Officer
and a Director of WMECO since April 1999;
previously Vice President-Customer
Operations of WMECO from October 1998 to April
1999; Vice President-Central Region of CL&P from
August 1997 to October 1998; and Vice President-
Eastern Region of CL&P from July 1994 to August
1997.

Gerald Letendre (4) 61 President, Diamond Casting & Machine Co.,
Inc. since 1972. Director of PSNH from October
1992 through December 2002.

Gary A. Long 51 President and Chief Operating Officer
and a Director of PSNH since July 1, 2000;
previously Senior Vice President-PSNH of PSNH
from February 2000 through June 2000 and Vice
President-Customer Service and Economic
Development of PSNH from January 1994 to February
2000.

Paul J. McDonald (5) 59 Advisor to the Board of Directors, Friendly
Ice Cream Corporation since January 2000;
Director of WMECO from September 1999 through
December 2002; previously Senior Executive Vice
President and Chief Financial Officer, Friendly
Ice Cream Corporation from 1986 to 1999.

Michael G. Morris (6) 56 Chairman of the Board, President and Chief
Executive Officer and a Trustee of NU and
Chairman and a Director of PSNH and WMECO since
August 19, 1997 and a Director of Northeast
Utilities Foundation, Inc. since September 23,
1998; previously Chief Executive Officer of PSNH
from August 19, 1997 through March 1, 2000 and
from July 1, 2000 through September 10, 2002;
Chief Executive Officer of WMECO from June 30,
1999 to September 10, 2002; Chairman and a
Director of CL&P from August 1997 to June 1999;
and President and Chief Executive Officer of
Consumers Power Company from 1994 to 1997.

Jane E. Newman (7) 57 Executive Dean, Harvard University's
John F. Kennedy School of Government since July
2000; Director of PSNH from October 1992 through
December 2002. Previously Managing Director, The
CommerceGroup, LLC, a strategic communications
company, from January 1999 to July 2000; and
Dean, Whittemore School of Business and Economics
of the University of New Hampshire from January
1998 to January 1999; Executive Vice President
and Director of Exeter Trust Company from 1995 to
1997.

Leon J. Olivier 54 President and Chief Operating Officer
and a Director of CL&P since September 2001;
previously Senior Vice President of Entergy
Nuclear Corp. from April 2001 to September 2001;
Senior Vice President and Chief Nuclear Officer
of Northeast Nuclear Energy Company from October
1998 to May 2001; and Senior Vice President,
Nuclear of Boston Edison Company from 1997 to
October 1998.

Melinda M. Phelps 46 Partner, Bulkley, Richardson & Gelinas,
LLP since January 1, 2001; Director of WMECO from
September 1999 through December 2002. Previously
of counsel to Bulkley, Richardson & Gelinas, LLP,
from May 2000 through December 2000 and partner,
Keyes and Donnellan, P.C., from 1992 to 2000.

Charles W. Shivery 57 President-Competitive Group of NU and
President and Chief Executive Officer of NU
Enterprises, Inc., since June 2002; previously Co-
President of Constellation Energy Group, Inc.
from October 2000 to February 2002; President and
Chief Executive Officer of Constellation Power
Source Holdings, Inc., from July 2000 to February
2002; Chief Executive Officer and President of
Constellation Enterprises, Inc. from 1998 to
February 2002; and Chairman of the Board,
President and Chief Executive Officer of
Constellation Power Source, Inc., from 1997 to
February 2002.

(1) Mr. Collins is a Director of Blue Cross and Blue Shield of Vermont, The
Vermont Health Plan, and Hamden Assurance Company Limited.
(2) Mr. Forsgren is a Director of NEON Communications, Inc. and CuraGen
Corporation, and a member of the Board of Regents of Georgetown
University.
(3) Mrs. Grise is a Director of Dana Corporation, University of Connecticut
Foundation and American Red Cross, Greater Hartford Chapter.
(4) Mr. Letendre is a Director of the National Association of Manufacturers
(Washington, DC).
(5) Mr. McDonald is a Director of CIGNA Investments Inc. and Polytainer's, LLC
(Toronto, Canada).
(6) Mr. Morris is a Director of the Edison Electric Institute, the American
Gas Association, Nuclear Electric Insurance Limited, St. Francis Care,
Inc., Connecticut Business & Industry Association, the Webster Financial
Corporation, and the Spinnaker Exploration Co. Mr. Morris is also a
Regent of Eastern Michigan University.
(7) Ms. Newman is a Director of Citizens Advisors.

There are no family relationships between any director or executive
officer and any other director or executive officer of NU, CL&P, PSNH or WMECO.

ITEM 11. EXECUTIVE COMPENSATION

NU

Incorporated herein by reference is the information contained in the
sections "Executive Compensation," "Long-Term Incentive Plans - Awards in Last
Fiscal Year," "Pension Benefits," "Trustee Compensation," "Employment Contracts
and Termination of Employment Arrangements," "Compensation Committee Report on
Executive Compensation" and "Share Performance Chart" of the definitive proxy
statement for solicitation of proxies by NU's Board of Trustees, dated
March 27, 2003, which will be filed with the Commission pursuant to Rule 14a-6
under the Securities Exchange Act of 1934.

SUMMARY COMPENSATION TABLE
CL&P, PSNH, WMECO

The following tables present the cash and non-cash compensation received
by the Chief Executive Officer and the next four highest paid executive
officers of CL&P, PSNH, and WMECO accordance with rules of the SEC:

- ---------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
------------------- -----------------------------------------------
Awards Payouts
------------------------- ---------------------
Restricted Securities Long-Term All
Stock Underlying Incentive Other
Other Annual Award(s) Options/Stock Program Compen-
Name and Salary Compensation ($) Appreciation Payouts sation ($)
Principal Position Year ($) Bonus ($) ($) (Note 1) (Note 2) Rights (#) ($) (Note 3)
- ---------------------------------------------------------------------------------------------------------------

Michael G. Morris 2002 915,385 558,000 209,883 - 630,600 - 27,462
Chairman of the
Board, President 2001 900,000 869,805 238,924 - 220,000 - 27,000
and Chief Executive
Officer of NU and 2000 830,770 1,200,000 196,964 - 140,000 - 27,326
Chairman of
PSNH and WMECO

John H. Forsgren 2002 556,154 165,000 - - 54,400 - 179,674
Executive Vice
President and 2001 524,423 200,000 - - 98,000 - 5,100
Chief Financial
Officer and Vice 2000 444,615 450,000 - - 36,000 - 5,100
Chairman of NU

Cheryl W. Grise 2002 409,231 280,000 - - 39,600 - 180,523
President -
Utility Group of NU 2001 338,654 180,000 - - 76,000 - 10,119
and Chief Executive
Officer of CL&P, 2000 279,616 290,000 - - 23,000 - 8,795
PSNH and WMECO

Gregory B. Butler 2002 206,154 70,000 - - 13,200 - 6,000
Vice President,
Secretary and 2001 189,269 70,000 - - 7,600 - 5,100
General Counsel of
NU and NUSCO 2000 174,462 105,000 - - 9,000 72,995 5,100

Leon J. Olivier 2002 303,908 138,000 - - 9,900 9,117
President and Chief
Operating Officer 2001 194,232 123,000 - 100,009 22,500 -
of CL&P
(CL&P Table Only) 2000 274,462 165,000 - - 13,000 9,261

Gary A. Long 2002 178,154 70,000 - - 8,100 6,000
President and Chief
Operating Officer 2001 171,846 55,000 - - 6,750 5,100
of PSNH
(PSNH Table Only) 2000 152,137 91,000 - - 6,500 4,564

Kerry J. Kuhlman 2002 173,093 62,000 - - 7,900 5,193
President and Chief
Operating Officer 2001 166,846 45,000 - - 6,200 5,005
of WMECO
(WMECO Table Only) 2000 161,539 90,000 - - 7,500 4,846

OPTION/SAR GRANTS IN LAST FISCAL YEAR

- -----------------------------------------------------------------------------------------------------------
Individual Grants Grand Date Value
----------------- ----------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Options/SARs Employees Base Price Expiration Present
Name Granted (#) in Fiscal Year ($/sh) Date Value ($)
- -----------------------------------------------------------------------------------------------------------

Michael G. Morris 130,600 9.77 18.58 2/25/2012 797,966 (Note 4)
500,000 37.39 16.55 8/20/2012 1,985,000 (Note 5)

John H. Forsgren 54,400 4.07 18.58 2/25/2012 332,384 (Note 4)

Cheryl W. Grise 39,600 2.96 18.58 2/25/2012 241,956 (Note 4)

Gregory B. Butler 13,200 0.99 18.58 2/25/2012 80,652 (Note 4)

Leon J. Olivier 9,900 0.74 18.58 2/25/2012 60,489 (Note 4)

Gary A. Long 8,100 0.61 18.58 2/25/2012 49,491 (Note 4)

Kerry J. Kuhlman 7,900 0.59 18.58 2/25/2012 48,269 (Note 4)

AGGREGATED OPTIONS/SAR EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION/SAR VALUES

- -------------------------------------------------------------------------------------------------------
Shares With
Respect to Number of Securities Value of Unexercised
Which Underlying Unexercised In-the-Money
Options Were Value Options/SARs Options/SARs
Exercised Realized at Fiscal Year End (#) at Fiscal Year End ($)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------

Michael G. Morris - - 849,591 823,935 2,794,204 -

John H. Forsgren 60,116 258,198 102,584 131,735 - -

Cheryl W. Grise - - 73,292 97,936 4,583 -

Gregory B. Butler - - 24,249 21,267 1,986 -

Leon J. Olivier - - 3,334 19,900 - -

Gary A. Long - - 13,282 14,768 891 -

Kerry J. Kuhlman - - 14,329 14,535 955 -

Notes to Summary Compensation and Option/SAR Grants Tables:

1. Other annual compensation for Mr. Morris includes personal use of the
Company's airplane, having a cost to the Company of $180,886 in 2002,
$219,088 in 2001, and $173,357 in 2000.

2. At December 31, 2002, the aggregate restricted stock holdings by the
individuals named in the table were 36,978 shares with a value of
$560,956. No restricted shares were awarded as incentive
compensation to these individuals in 2002; payment of 50 percent of
the 2001 annual bonus of each of Mr. Morris, Mr. Forsgren, and Mrs.
Grise was made on February 25, 2002 in the form of restricted shares
vesting one-third on February 25, 2003, February 25, 2004, and
February 25, 2005. Dividends on restricted stock are paid out.

3. "All Other Compensation" for 2002 consists of employer matching
contributions under the Northeast Utilities Service Company 401k
Plan, generally available to all eligible employees (each of Messrs.
Morris, Forsgren, Butler and Mrs. Grise - $6,000, Mr. Long - $5,345
and Ms. Kuhlman - $5,193) and matching contributions under the
Deferred Compensation Plan for Executives (Mr. Morris - $21,462, Mrs.
Grise - $6,277 and Mr. Olivier - $9,117). For Mr. Forsgren and Mrs.
Grise, it also includes vested deferred compensation paid out on
June 28, 2002 of $173,674 and $168,246 respectively (See Employment
Contracts and Termination of Employment and Change in Control
Arrangements, Below).

4. These options were granted on February 25, 2002 under the Northeast
Utilities Incentive Plan (Incentive Plan). All options granted vest
one-third on February 25, 2003, one-third on February 25, 2004 and
one-third on February 25, 2005. Valued using the Black-Scholes option
pricing model, discounted by 5.88% to reflect the risk of forfeiture,
with the following assumptions: Volatility: 24.33 percent (36 months
of monthly data); Risk-free rate: 5.18 percent; Dividend yield: 1.82
percent; Exercise date: February 25, 2012.

5. These options were granted on November 1, 2002 under the Incentive
Plan. All options granted vest one-third on November 1, 2003, one-
third on November 1, 2004 and one-third on November 1, 2005. Valued
using the Black-Scholes option pricing model, discounted by 14.13% to
reflect the risk of forfeiture, with the following assumptions:
Volatility: 23.09 percent (36 months of monthly data); Risk-free
rate: 4.47 percent; Dividend yield: 2.44 percent; Exercise date:
November 1, 2012.

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

Grants of performance units were made during 2002 under the Incentive
Plan to the Company's officers. Payments will be made in cash following the
close of the performance period. Threshold, target, and maximum payouts will
be determined based on average annual rate of growth in net earnings over the
performance period. Grants to the executive officers named in the Summary
Compensation Table were as follows:

Estimated Future Payouts
Under Non-Stock Price-Based Plans
---------------------------------

(a) (b) (c) (d) (e) (f)
Number of Performance
Shares, or Other
Units or Period Until
Other Maturation
Rights Or Payout Threshold Target Maximum
Name (#) ($) ($) ($)
- ---- -------- ------------------- --------- ------ -------

Michael G. Morris 9,900 1/1/2002-12/31/2004 396,000 990,000 1,386,000
John H. Forsgren 4,125 1/1/2002-12/31/2004 165,000 412,500 577,500
Cheryl W. Grise 3,000 1/1/2002-12/31/2004 120,000 300,000 420,000
Gregory B. Butler 1,000 1/1/2002-12/31/2004 40,000 100,000 140,000
Leon J. Olivier 750 1/1/2002-12/31/2004 30,000 75,000 105,000
Gary A. Long 616 1/1/2002-12/31/2004 24,640 61,600 86,240
Kerry J. Kuhlman 599 1/1/2002-12/31/2004 23,960 59,900 83,860

PENSION BENEFITS

The tables on the following pages show the estimated annual retirement
benefits payable to an executive officer of Northeast Utilities upon
retirement, assuming that retirement occurs at age 65 and that the officer is
at that time not only eligible for a pension benefit under the Northeast
Utilities Service Company Retirement Plan (the Retirement Plan) but also
eligible for either the make-whole benefit or the make-whole benefit plus the
target benefit under the Supplemental Executive Retirement Plan for Officers
of Northeast Utilities System Companies (the Supplemental Plan). The
Supplemental Plan is a non-qualified pension plan providing supplemental
retirement income to system officers. The make-whole benefit under the
Supplemental Plan, available to all officers, makes up for benefits lost
through application of certain tax code limitations on the benefits that may
be provided under the Retirement Plan, and includes as "compensation" awards
under the executive incentive plans and deferred compensation (as earned).
The target benefit further supplements these benefits and is available to
officers at the Senior Vice President level and higher who are selected by
the Board of Trustees to participate in the target benefit and who remain in
the employ of Northeast Utilities companies until at least age 60 (unless the
Board of Trustees sets an earlier age).

Mr. Morris's Employment Agreement provides that upon retirement (or upon
disability or termination or following a change of control, as defined) he
will be entitled to receive a special retirement benefit calculated by
applying the benefit formula of the CMS Energy/Consumers Energy Company (CMS)
Supplemental Executive Retirement Plan to all compensation earned from the
Company and to all service rendered to the Company and CMS. If Mr. Morris
retires after age 60, his special retirement benefit will be no less than
that which he would have received had he been eligible for a make-whole
benefit plus a target benefit under the Supplemental Plan.

Mr. Forsgren and Mrs. Grise are currently eligible for a make-whole plus a
target benefit. Messrs. Butler, Olivier and Long and Mrs. Kuhlman are
eligible for the make-whole benefit but not the target benefit.

Mr. Forsgren's Employment Agreement provides for supplemental pension
benefits based on crediting up to ten years additional service and providing
payments equal to 25 percent of final average compensation (not to exceed 170
percent of highest average base compensation received in any 36 month period)
for up to 15 years following retirement, reduced by four percentage points
for each year that his age is less than 65 years at retirement. In addition,
if Mr. Forsgren retires after age 58, he will be eligible for a make-whole
plus a target benefit under the Supplemental Plan based on crediting three
extra years of service, unreduced for early commencement.

ANNUAL BENEFIT FOR OFFICERS ELIGIBLE FOR MAKE-WHOLE BENEFIT

Final Years of Credited Service
Average
Compensation
15 20 25 30 35

$200,000 $43,521 $58,028 $72,535 $87,042 $101,549
$250,000 $54,771 $73,028 $91,285 $109,542 $127,799
$300,000 $66,021 $88,028 $110,035 $132,042 $154,049
$350,000 $77,271 $103,028 $128,785 $154,542 $180,299
$400,000 $88,521 $118,028 $147,535 $177,042 $206,549
$450,000 $99,771 $133,028 $166,285 $199,542 $232,799
$500,000 $111,021 $148,028 $185,035 $222,042 $259,049
$600,000 $133,521 $178,028 $222,535 $267,042 $311,549
$700,000 $156,021 $208,028 $260,035 $312,042 $364,049
$800,000 $178,521 $238,028 $297,535 $357,042 $416,549
$900,000 $201,021 $268,028 $335,035 $402,042 $469,049
$1,000,000 $223,521 $298,028 $372,535 $447,042 $521,549
$1,100,000 $246,021 $328,028 $410,035 $492,042 $574,049
$1,200,000 $268,521 $358,028 $447,535 $537,042 $626,549

ANNUAL BENEFIT FOR OFFICERS ELIGIBLE FOR
MAKE-WHOLE PLUS TARGET BENEFIT

Final Years of Credited Service
Average
Compensation 15 20 25 30 35
$ 200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000
250,000 90,000 120,000 150,000 150,000 150,000
300,000 108,000 144,000 180,000 180,000 180,000
350,000 126,000 168,000 210,000 210,000 210,000
400,000 144,000 192,000 240,000 240,000 240,000
450,000 162,000 216,000 270,000 270,000 270,000
500,000 180,000 240,000 300,000 300,000 300,000
600,000 216,000 288,000 360,000 360,000 360,000
700,000 252,000 336,000 420,000 420,000 420,000
800,000 288,000 384,000 480,000 480,000 480,000
900,000 324,000 432,000 540,000 540,000 540,000
1,000,000 360,000 480,000 600,000 600,000 600,000
1,100,000 396,000 528,000 660,000 660,000 660,000
1,200,000 432,000 576,000 720,000 720,000 720,000

The benefits presented in the tables above are based on a straight life
annuity beginning at age 65 and do not take into account any reduction for
joint and survivorship annuity payments. Final average compensation for
purposes of calculating the target benefit is the highest average annual
compensation of the participant during any 36 consecutive months compensation
was earned. Final average compensation for purposes of calculating the make-
whole benefit is the highest average annual compensation of the participant
during any 60 consecutive months compensation was earned. Compensation for
these benefits includes the annual salary and bonus shown in the Summary
Compensation Table and, for officers hired before November 1, 2001, an amount
that represents the annual value of long term incentive compensation.
Compensation for purposes of these benefits does not include employer
matching contributions under the 401k Plan. In the event that an officer's
employment terminates because of disability, the retirement benefits shown
above would be offset by the amount of any disability benefits payable to the
recipient that are attributable to contributions made by Northeast Utilities
and its subsidiaries under long term disability plans and policies.

Mr. Morris is not eligible to participate in the Supplemental Plan, but
he does participate in the Retirement Plan. The amount of his annual
compensation covered by the Retirement Plan was limited by the IRS to
$200,000 for 2002. The compensation covered by the Supplemental Plan in 2002
for Mr. Forsgren, Mrs. Grise, Mr. Butler, Mr. Olivier, Mr. Long, and Mrs.
Kuhlman was $933,084, $826,155, $307,699, $484,360, $270,840, and $258,191,
respectively.

As of December 31, 2002, the executive officers named in the Summary
Compensation Table had approximately the following years of credited service
for purposes of the Supplemental Plan: Mr. Kenyon - 8, Mr. Forsgren - 6, Mrs.
Grise - 22, Mr. Butler - 6, -Mr. Olivier - 4, Mr. Long - 27, and Mrs. Kuhlman
- - 22. Mr. Morris had 24 years of service for purpose of his special
retirement benefit. In addition, Mr. Forsgren had 12 years of service for
purposes of his supplemental pension benefit and would have 25 years of
service for such purpose if he were to retire at age 65.

COMPENSATION OF DIRECTORS

During 2002 each non-employee Director of PSNH and WMECO was compensated
at an annual rate of $10,000 cash, and received $500 for each meeting
attended of the Board of Directors or, in the case of PSNH, its committees.
A non-employee Director who participates in a meeting of the Board of
Directors or any of its committees by conference telephone receives $300 per
meeting. Also, committee chairs were compensated at an additional annual
rate of $1,500.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS

Northeast Utilities has entered into an employment agreement with Mr.
Morris and NUSCO has entered into employment agreements with Mr. Forsgren and
Mrs. Grise; each of the other named executive officers participates in the
Special Severance Program for Officers of Northeast Utilities Companies. The
agreements and the Special Severance Program are also binding on Northeast
Utilities and on each majority-owned subsidiary of Northeast Utilities.

Each agreement obligates the officer to perform such duties as may be
directed by the NUSCO Board of Directors or the Northeast Utilities Board of
Trustees, protect the Company's confidential information, and refrain, while
employed by the Company and for a period of time thereafter, from competing
with the Company in a specified geographic area. Each agreement provides
that the officer's base salary will not be reduced below certain levels
without the consent of the officer, and that the officer will participate in
specified benefits under the Supplemental Executive Retirement Plan or other
supplemental retirement programs (see Pension Benefits, above) and/or in
certain executive incentive programs at specified incentive opportunity
levels.

Each agreement provides for a specified employment term and for automatic
one-year extensions of the employment term unless at least six months' notice
of non-renewal is given by either party. The employment term may also be
ended by the Company for "cause", as defined, at any time (in which case no
supplemental retirement benefit, if any, shall be due), or by the officer on
thirty days' prior written notice for any reason. Absent "cause", the
Company may remove the officer from his or her position on sixty days' prior
written notice, but in the event the officer is so removed and signs a
release of all claims against the Company, the officer will receive one or
two years' base salary and annual incentive payments, specified employee
welfare and pension benefits, and vesting of stock appreciation rights,
options and restricted stock.

Under the terms of the agreements and the Special Severance Program, upon
any termination of employment following a change of control, as defined,
between (a) the earlier of the date shareholders approve a change of control
transaction or a change of control transaction occurs and (b) the earlier of
the date, if any, on which the Board of Trustees abandons the transaction or
the date two years following the change of control, if the officer signs a
release of all claims against the Company, the officer will be entitled to
certain payments including a multiple (not to exceed three) of annual base
salary, annual incentive payments, specified employee welfare and pension
benefits, and vesting of stock appreciation rights, options and restricted
stock. Certain of the change of control provisions may be modified by the
Board of Trustees prior to a change of control, on at least two years' notice
to the affected officer(s).

Besides the terms described above, the agreements of Messrs. Morris and
Forsgren provide for a specified salary, cash, restricted stock and/or stock
options upon employment, special incentive programs and/or special retirement
benefits. See Pension Benefits, above, for further description of these
provisions. The agreements of Mr. Forsgren and Mrs. Grise were supplemented
during 2001 to provide for special deferred compensation of $520,000 and
$500,000, respectively, vesting in even installments (adjusted to reflect
investment performance) on June 28, 2002, 2003 and 2004, so long as such
officer remains in the employ of Northeast Utilities Service Company, and
vesting sooner in the event of a change of control of the Company or
involuntary termination without cause.

Letter agreements reflecting the terms of employment of Messrs. Butler,
Boguslawski, and Olivier provide for specified salary, cash, restricted
stock, stock options or other benefits upon employment.

The descriptions of the various agreements set forth above are for purpose
of disclosure in accordance with the proxy and other disclosure rules of the
SEC and shall not be controlling on any party; the actual terms of the
agreements themselves determine the rights and obligations of the parties.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS

NU.

Incorporated herein by reference is the information contained in the
sections "Common Stock Ownership of Certain Beneficial Owners", "Common Stock
Ownership of Management", and "Securities Authorized for Issuance Under
Equity Compensation Plans" of the definitive proxy statement for solicitation
of proxies by NU's Board of Trustees, dated March 27, 2003, which will be
filed with the Commission pursuant to Rule 14a-6 under the Securities
Exchange Act of 1934.

CL&P, PSNH, and WMECO.

NU owns 100% of the outstanding common stock of registrants CL&P, PSNH,
and WMECO. As of March 14, 2003, the Directors and Executive Officers of
CL&P, PSNH, and WMECO beneficially owned the number of shares of each class
of equity securities of NU listed below. No equity securities of CL&P, PSNH,
or WMECO are owned by the Directors and Executive Officers of CL&P, PSNH, and
WMECO. Unless otherwise noted, each Director and Executive Officer of CL&P,
PSNH, and WMECO has sole voting and investment power with respect to the
listed shares.

Title of Amount and Nature of Percent of
Class Name Beneficial Ownership Class

NU Common David H. Boguslawski (1) 34,373 (2)
NU Common Gregory B. Butler (3) 49,018 (2)
NU Common John H. Forsgren (4) 187,567 (2)
NU Common Cheryl W. Grise (5) 128,135 (2)
NU Common Kerry J. Kuhlman (6) 32,555 (2)
NU Common Gary A. Long (7) 30,871 (2)
NU Common Michael G. Morris (8) 1,067,100 (2)
NU Common Leon J. Olivier (9) 16,683 (2)

Amount beneficially owned by Directors and Executive Officers as a group:

Amount and Nature of Percent of
Company Number of Persons Beneficial Ownership Outstanding

CL&P 6 1,482,876 (2)
PSNH 6 1,497,064 (2)
WMECO 6 1,498,748 (2)

(1) Includes 23,704 shares that could be acquired by Mr. Boguslawski
pursuant to currently exercisable options and 5,304 restricted shares,
as to which Mr. Boguslawski has sole voting and no dispositive power.

(2) As of March 14, 2003, there were 130,383,840 common shares of NU
outstanding. The percentage of such shares beneficially owned by any
Director or Executive Officer of CL&P, PSNH, or WMECO and by all of the
Directors and Executive Officers of each of CL&P, PSNH and WMECO does
not exceed one percent.

(3) Includes 34,182 shares that could be acquired by Mr. Butler pursuant
to currently exercisable options and 7,779 restricted shares as to which
Mr. Butler has sole voting and no dispositive power.

(4) Includes 143,718 shares that could be acquired by Mr. Forsgren pursuant
to currently exercisable options and 39,631 restricted shares as to
which Mr. Forsgren has sole voting and no dispositive power.

(5) Includes 73,292 shares that could be acquired by Mrs. Grise pursuant to
currently exercisable options, 36,072 restricted as to which Mrs. Grise
has sole voting and no dispositive power, and 265 shares held by Mrs.
Grise's husband as custodian for her children, with whom she shares
voting and dispositive power.

(6) Includes 21,529 shares that could be acquired by Ms. Kuhlman pursuant to
currently exercisable options and 4,420 restricted shares, as to which
Ms. Kuhlman has sole voting and no dispositive power.

(7) Includes 20,399 shares that could be acquired by Mr. Long pursuant to
currently exercisable options and 4,597 restricted shares, as to which
Mr. Long has sole voting and no dispositive power.

(8) Includes 979,792 shares that could be acquired by Mr. Morris pursuant to
currently exercisable options and 31,732 restricted shares as to which
Mr. Morris has sole voting and no dispositive power.

(9) Includes 6,634 shares that could be acquired by Mr. Olivier pursuant to
currently exercisable options and 5,552 restricted shares, as to which
Mr. Olivier has sole voting and no dispositive power.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth the number of Common Shares of Northeast
Utilities issuable under the equity compensation plans of the Northeast
Utilities System, as well as their weighted exercise price, in accordance
with the rules of the SEC:

- -------------------------------------------------------------------------------------------------
Number of securities
Number of securities Weighted-average remaining available for
to be issued upon exercise price of future issuance under
exercise of outstanding equity compensation plans
outstanding options, options, warrants (excluding securities
Plan Category warrants and rights and rights reflected in column (a))
- -------------------------------------------------------------------------------------------------
(a) (b) (c)
- -------------------------------------------------------------------------------------------------

Equity
compensation
plans approved by
security holders 3,956,137 $16.73 See Note 1
- -------------------------------------------------------------------------------------------------
Equity
compensation
plans not
approved by
security holders 500,000 $9.625 None
- -------------------------------------------------------------------------------------------------
Total 4,456,137 $15.93 See Note 1
- -------------------------------------------------------------------------------------------------

Notes to table:

1. Under the Incentive Plan, 3,873,851 shares were available for issuance as
of December 31, 2002. In addition, an amount equal to one percent of the
outstanding shares as of the end of each year becomes available for issuance
under the Incentive Plan the following year. Under the Northeast Utilities
Employee Share Purchase Plan II, 7,438,295 additional shares are available
for issuance. Each such plan expires in 2008.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference is the information contained in the
section "Certain Relationships and Related Transactions" of the definitive
proxy statement for solicitation of proxies by NU's Board of Trustees, dated
March 27, 2003, which will be filed with the Commission pursuant to Rule 14a-
6 under the Securities Exchange Act of 1934.

ITEM 14. CONTROLS AND PROCEDURES

NU, CL&P, PSNH and WMECO (collectively, the companies) evaluated the
design and operation of their disclosure controls and procedures to determine
whether they are effective in ensuring that the disclosure of required
information is timely made in accordance with the Exchange Act and the rules
and forms of the SEC. These evaluations were made under the supervision and
with the participation of management, including the companies' principal
executive officer and principal financial officer, within the 90-day period
prior to the filing of this Annual Report on Form 10-K. The principal
executive officer and principal financial officer have concluded, based on
their review, that the companies' disclosure controls and procedures, as
defined at Exchange Act Rules 13a-14(c) and 15(d)-14(c), are effective to
ensure that information required to be disclosed by the companies in reports
that it files under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in SEC rules and forms. No
significant changes were made to the companies' internal controls or other
factors that could significantly affect these controls subsequent to the date
of their evaluation.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Financial Statements:

The Report of Independent Public Accountants and financial
statements of CL&P, PSNH and WMECO are hereby incorporated by
reference and made a part of this report (see "Item 8. Financial
Statements and Supplementary Data").

Independent Auditors' Report S-1

Independent Auditors' Consent S-2

2. Schedules:

Financial Statement Schedules for NU (Parent),
NU and Subsidiaries, CL&P and Subsidiaries,
PSNH and Subsidiaries, and WMECO and Subsidiary
are listed in the Index to Financial
Statements Schedules S-3

3. Exhibits Index E-1

(b) Reports on Form 8-K:

NU filed a current report on Form 8-K dated January 22, 2002,
disclosing:

o NU's earnings press release for the fourth quarter and full year 2001.

NU and PSNH filed current reports on Form 8-K dated January 30, 2002,
disclosing:

o The closing on the sale of $50 million of RRBs through PSNH's
subsidiary, PSNH Funding LLC 2.

NU, CL&P, PSNH, and WMECO filed current reports on Form 8-K dated
March 15, 2002, disclosing:

o NU's change in its certifying accountant.

NU filed a current report on Form 8-K/A dated March 15, 2002,
disclosing:

o An amendment to NU's current report on Form 8-K dated March 15, 2002,
disclosing NU's change in its certifying accountant.

NU and CL&P filed current reports on Form 8-K dated June 17, 2002,
disclosing:

o NU's lowering of its earnings estimates for 2002 and CL&P's criticism
of the DPUC's decision on standard offer generation rates.

NU filed a current report on Form 8-K dated August 2, 2002, disclosing:

o NU's submission to the SEC of Statements under Oath of the Principal
Executive Officer and Principal Financial Officer in accordance with
the SEC's June 27, 2002 Order requiring the filing of sworn statements
pursuant to Section 21(a)(1) of the Securities and Exchange Act of
1934.

NU filed a current report on Form 8-K dated August 14, 2002, disclosing:

o NU's submission to the SEC of certain Statements under Oath of the
Principal Executive Officer and Principal Financial Officer in
accordance with the SEC's June 27, 2002 Order requiring the filing of
sworn statements pursuant to Section 21(a)(1) of the Securities and
Exchange Act of 1934.

NU, CL&P, PSNH and WMECO filed current reports on Form 8-K dated
November 26, 2002, disclosing:

o An increase in the estimated decommissioning costs associated with
various nuclear units.

NU, CL&P, PSNH and WMECO filed current reports on Form 8-K/A dated
November 26, 2002, providing:

o An amendment to their respective current reports on Form 8-K dated
November 26, 2002, disclosing an increase in the estimated
decommissioning costs associated with various nuclear units.

NU filed a current report on Form 8-K dated January 28, 2003, disclosing:

o NU's earnings press release for the fourth quarter and full year 2002.

NORTHEAST UTILITIES

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

NORTHEAST UTILITIES
-------------------
(Registrant)

Date: March 21, 2003 By /s/ Michael G. Morris
-------------- ---------------------
Michael G. Morris
Chairman of the Board,
President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Date Title Signature
- ---- ----- ---------

March 21, 2003 Chairman of the Board, /s/ Michael G. Morris
- -------------- President and -----------------------------
Chief Executive Officer Michael G. Morris
and a Trustee

March 21, 2003 Vice Chairman, /s/ John H. Forsgren
- -------------- Executive Vice ----------------------------
President and Chief John H. Forsgren
Financial Officer
and a Trustee

March 21, 2003 Vice President - /s/ John P. Stack
- -------------- Accounting and ----------------------------
Controller John P. Stack

March 21, 2003 Trustee /s/ Richard H. Booth
- -------------- ----------------------------
Richard H. Booth

March 21, 2003 Trustee /s/ Cotton M. Cleveland
- -------------- ----------------------------
Cotton M. Cleveland

March 21, 2003 Trustee /s/ Sanford Cloud, Jr.
- -------------- ----------------------------
Sanford Cloud, Jr.

March 21, 2003 Trustee /s/ James F. Cordes
- -------------- ----------------------------
James F. Cordes

March 21, 2003 Trustee /s/ E. Gail de Planque
- -------------- ----------------------------
E. Gail de Planque

March 21, 2003 Trustee /s/ Elizabeth T. Kennan
- -------------- ----------------------------
Elizabeth T. Kennan

March 21, 2003 Trustee /s/ Robert E. Patricelli
- -------------- ----------------------------
Robert E. Patricelli

March 21, 2003 Trustee /s/ John F. Swope
- -------------- ----------------------------
John F. Swope

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael G. Morris, Chairman, President and Chief Executive Officer of
Northeast Utilities (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ Michael G. Morris
(Signature)
Michael G. Morris
Chairman, President and Chief Executive Officer

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John H. Forsgren, Vice Chairman, Executive Vice President and Chief
Financial Officer of Northeast Utilities (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ John H. Forsgren
(Signature)
John H. Forsgren
Vice Chairman, Executive
Vice President and Chief
Financial Officer

THE CONNECTICUT LIGHT AND POWER COMPANY

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

THE CONNECTICUT LIGHT AND POWER COMPANY
---------------------------------------
(Registrant)

Date: March 21, 2003 By /s/ Cheryl W. Grise
-------------- ---------------------------
Cheryl W. Grise
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Date Title Signature
- ---- ----- ---------

March 21, 2003 President and /s/ Leon J. Olivier
- -------------- Chief Operating ----------------------------
Officer and Leon J. Olivier
a Director

March 21, 2003 Chief Executive /s/ Cheryl W. Grise
- -------------- Officer and ----------------------------
a Director Cheryl W. Grise

March 21, 2003 Executive Vice /s/ John H. Forsgren
- -------------- President and ----------------------------
Chief Financial John H. Forsgren
Officer

March 21, 2003 Vice President - /s/ John P. Stack
- -------------- Accounting and ----------------------------
Controller John P. Stack

March 21, 2003 Director /s/ David H. Boguslawski
- -------------- ----------------------------
David H. Boguslawski

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Cheryl W. Grise, Chief Executive Officer of The Connecticut Light and
Power Company (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ Cheryl W. Grise
(Signature)
Cheryl W. Grise
Chief Executive Officer

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John H. Forsgren, Executive Vice President and Chief Financial Officer of
The Connecticut Light and Power Company (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ John H. Forsgren
(Signature)
John H. Forsgren
Executive Vice President and
Chief Financial Officer

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
---------------------------------------
(Registrant)

Date: March 21, 2003 By /s/ Cheryl W. Grise
-------------- ---------------------------
Cheryl W. Grise
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Date Title Signature
- ---- ----- ---------

March 21, 2003 Chairman /s/ Michael G. Morris
- -------------- and a Director ----------------------------
Michael G. Morris

March 21, 2003 Chief Executive /s/ Cheryl W. Grise
- -------------- Officer and ----------------------------
a Director Cheryl W. Grise

March 21, 2003 President and /s/ Gary A. Long
- -------------- Chief Operating ----------------------------
Officer and Gary A. Long
a Director

March 21, 2003 Executive Vice /s/ John H. Forsgren
- -------------- President and ----------------------------
Chief Financial John H. Forsgren
Officer and
a Director

March 21, 2003 Vice President - /s/ John P. Stack
- -------------- Accounting and ----------------------------
Controller John P. Stack

March 21, 2003 Director /s/ David H. Boguslawski
- -------------- ----------------------------
David H. Boguslawski

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Cheryl W. Grise, Chief Executive Officer of Public Service Company of New
Hampshire (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ Cheryl W. Grise
(Signature)
Cheryl W. Grise
Chief Executive Officer

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John H. Forsgren, Executive Vice President and Chief Financial Officer of
Public Service Company of New Hampshire (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ John H. Forsgren
(Signature)
John H. Forsgren
Executive Vice President and
Chief Financial Officer

WESTERN MASSACHUSETTS ELECTRIC COMPANY

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

WESTERN MASSACHUSETTS ELECTRIC COMPANY
--------------------------------------
(Registrant)

Date: March 21, 2003 By /s/ Cheryl W. Grise
-------------- -----------------------------
Cheryl W. Grise
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Date Title Signature
- ---- ----- ---------

March 21, 2003 Chairman /s/ Michael G. Morris
- -------------- and a Director ----------------------------
Michael G. Morris

March 21, 2003 Chief Executive /s/ Cheryl W. Grise
- -------------- Officer and ----------------------------
a Director Cheryl W. Grise

March 21, 2003 President and /s/ Kerry J. Kuhlman
- -------------- Chief Operating ----------------------------
Officer and Kerry J. Kuhlman
a Director

March 21, 2003 Executive Vice /s/ John H. Forsgren
- -------------- President and ----------------------------
Chief Financial John H. Forsgren
Officer and
a Director

March 21, 2003 Vice President - /s/ John P. Stack
- -------------- Accounting and ----------------------------
Controller John P. Stack

March 21, 2003 Director /s/ David H. Boguslawski
- -------------- ----------------------------
David H. Boguslawski

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Cheryl W. Grise, Chief Executive Officer of Western Massachusetts Electric
Company (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ Cheryl W. Grise
(Signature)
Cheryl W. Grise
Chief Executive Officer

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John H. Forsgren, Executive Vice President and Chief Financial Officer of
Western Massachusetts Electric Company (the Company), certify that:

1. I have reviewed this annual report on Form 10-K of the Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
annual report (the Evaluation Date); and

c) presented in this annual 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 officers 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 functions):

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
annual report whether 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: March 21, 2003

/s/ John H. Forsgren
(Signature)
John H. Forsgren
Executive Vice President and
Chief Financial Officer

INDEPENDENT AUDITORS' REPORT

To the Board of Trustees and Shareholders of Northeast Utilities and the
Boards of Directors of The Connecticut Light and Power Company, Public
Service Company of New Hampshire and Western Massachusetts Electric Company:

We have audited the consolidated financial statements of Northeast Utilities
and subsidiaries (the "Company") and The Connecticut Light and Power Company
("CL&P") as of December 31, 2002 and 2001 and for the years then ended, and
the consolidated financial statements of Public Service Company of New
Hampshire ("PSNH") and Western Massachusetts Electric Company ("WMECO") as of
and for the year ended December 31, 2002 (collectively "the Companies"), and
have issued our reports thereon dated January 28, 2003 (February 27, 2003 as
to Note 8A) for the Company, January 28, 2003 (February 27, 2003 as to Note
6A) for CL&P, and January 28, 2003 for PSNH and WMECO; such financial
statements and reports are included in Northeast Utilities' 2002 Annual
Report to Shareholders and in CL&P 's, PSNH's and WMECO's 2002 annual
reports, all of which are incorporated herein by reference. Our report on
the consolidated financial statements of Northeast Utilities expresses an
unqualified opinion and includes an explanatory paragraph with respect to the
Company's adoption of Statement of Financial Accounting Standards (SFAS) No.
133, "Accounting for Derivative Instruments and Hedging Activities," as
amended, effective January 1, 2001, and its adoption in 2002 of Emerging
Issues Task Force Issue 02-3, "Accounting for Contracts Involved in Energy
Trading and Risk Management Activities," and SFAS No. 142, "Goodwill and
Other Intangible Assets." Our report also includes an additional paragraph
regarding the audit procedures we applied to certain adjustments made to the
Company's 2000 consolidated financial statements for the transitional
disclosures required by SFAS No. 142. We do not express an opinion or any
form of assurance on the 2000 financial statements taken as a whole.

Our audits also included the 2002 and 2001 financial statement schedules of
Northeast Utilities and CL&P and the 2002 financial statement schedules of
PSNH and WMECO, listed in Item 15. The 2000 consolidated financial
statements and financial statement schedules of Northeast Utilities and CL&P
and the 2001 and 2000 financial statements and financial statement schedules
of PSNH and WMECO were audited by other auditors who have ceased operations.
Those auditors expressed an unqualified opinion on those financial statements
and financial statement schedules in their reports dated January 22, 2002.
These financial statement schedules are the responsibility of the Companies'
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedules audited by us, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

/s/ Deloitte & Touche LLP
Deloitte & Touche LLP

Hartford, Connecticut
January 28, 2003

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement Nos.
33-34622, 333-55142 and 33-40156 on Forms S-3 and Nos. 33-44814, 33-63023,
333-52413 and 333-52415 on Forms S-8 of Northeast Utilities (the Company) of
our reports dated January 28, 2003 (February 27, 2003 as to Note 8A),
appearing in and incorporated by reference in this Annual Report on Form 10-K
of Northeast Utilities for the year ended December 31, 2002 (which express an
unqualified opinion and include explanatory paragraphs with respect to the
Company's adoption of Statement of Financial Accounting Standards (SFAS) No.
133, "Accounting for Derivative Instruments and Hedging Activities," as
amended, effective January 1, 2001, and its adoption in 2002 of Emerging
Issues Task Force Issue 02-3, "Accounting for Contracts Involved in Energy
Trading and Risk Management Activities" and SFAS No. 142, "Goodwill and Other
Intangible Assets"). Our reports also include an additional paragraph
regarding the audit procedures we applied to certain adjustments made to the
Company's 2000 consolidated financial statements for the transitional
disclosures required by SFAS No. 142. We do not express an opinion or any
form of assurance on the 2000 consolidated financial statements taken as a
whole.

/s/ Deloitte & Touche LLP
Deloitte & Touche LLP

Hartford, Connecticut
March 21, 2003

INDEX TO FINANCIAL STATEMENTS SCHEDULES

Schedule

I. Financial Information of Registrant:
Northeast Utilities (Parent) Balance
Sheets at December 31, 2002 and 2001 S-4

Northeast Utilities (Parent) Statements
of Income for the Years Ended December 31,
2002, 2001, and 2000 S-5

Northeast Utilities (Parent) Statements
of Cash Flows for the Years Ended December 31,
2002, 2001, and 2000 S-6

II. Valuation and Qualifying Accounts and Reserves
for 2002, 2001, and 2000:

Northeast Utilities and Subsidiaries S-7 - S-9
The Connecticut Light and Power Company
and Subsidiaries S-10 - S-12
Public Service Company of New Hampshire
and Subsidiaries S-13 - S-15
Western Massachusetts Electric Company
and Subsidiary S-16 - S-18

All other schedules of the companies' for which provision is made in the
applicable regulations of the SEC are not required under the related
instructions or are not applicable, and therefore have been omitted.

SCHEDULE I
NORTHEAST UTILITIES (PARENT)
FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS
AT DECEMBER 31, 2002 AND 2001
(Thousands of Dollars)

SCHEDULE I
NORTHEAST UTILITIES (PARENT)
FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
(Thousands of Dollars, Except Share Information)

SCHEDULE I
NORTHEAST UTILITIES (PARENT)
FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
(Thousands of Dollars)

EXHIBIT INDEX

Each document described below is incorporated by reference to the files
of the SEC, unless the reference to the document is marked as follows:

* - Filed with the 2002 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 2002 NU Form 10-K, File No. 1-5324
into the 2002 Annual Reports on Form 10-K for CL&P, PSNH and WMECO.

# - Filed with the 2002 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 2002 NU Form 10-K, File No. 1-5324
into the 2002 Annual Report on Form 10-K for CL&P.

@ - Filed with the 2002 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 2002 NU Form 10-K, File No. 1-5324
into the 2002 Annual Report on Form 10-K for PSNH.

** - Filed with the 2002 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 2002 NU Form 10-K, File No. 1-5324
into the 2002 Annual Report on Form 10-K for WMECO.

Exhibit
Number Description

2 Plan of acquisition, reorganization, arrangement, liquidation or
succession

2.1 Amended and Restated Agreement and Plan of Merger (Exhibit 1 to
NU's Current Report on Form 8-K dated December 2, 1999, File No. 1-
5324).

2.2 Purchase and Sale Agreement for the Seabrook Nuclear Power Station
dated April 13, 2002 (Exhibit 10.63 to NU Form 10-Q for the quarter
ended March 31, 2002, File No. 1-5324)

3 Articles of Incorporation and By-Laws

3.1 Northeast Utilities

3.1.1 Declaration of Trust of NU, as amended through
May 24, 1988. (Exhibit 3.1.1, 1988 NU Form 10-K, File No.
1-5324)

3.2 The Connecticut Light and Power Company

3.2.1 Certificate of Incorporation of CL&P, restated to
March 22, 1994. (Exhibit 3.2.1, 1993 NU Form 10-K, File
No. 1-5324)

3.2.2 Certificate of Amendment to Certificate of
Incorporation of CL&P, dated December 26, 1996. (Exhibit
3.2.2, 1996 NU Form 10-K, File No. 1-5324)

3.2.3 Certificate of Amendment to Certificate of
Incorporation of CL&P, dated April 27, 1998. (Exhibit
3.2.3, 1998 NU Form 10-K, File No. 1-5324)

3.2.4 By-laws of CL&P, as amended to January 1, 1997.
(Exhibit 3.2.3, 1996 NU Form 10-K, File No. 1-5324)

3.3 Public Service Company of New Hampshire

3.3.1 Articles of Incorporation, as amended to May 16, 1991.
(Exhibit 3.3.1, 1993 NU Form 10-K, File No. 1-5324)

3.3.2 By-laws of PSNH, as amended to November 1, 1993.
(Exhibit 3.3.2, 1993 NU Form 10-K, File No. 1-5324)

3.4 Western Massachusetts Electric Company

3.4.1 Articles of Organization of WMECO, restated to
February 23, 1995. (Exhibit 3.4.1, 1994 NU Form 10-K,
File No. 1-5324)

3.4.2 By-laws of WMECO, as amended to April 1, 1999. (Exhibit
3.1, 1999 NU Form 10-Q for the Quarter Ended June 30,
1999, File No. 1-5324)

3.4.3 By-laws of WMECO, as further amended to May 1,
2000. (Exhibit 3.1, 2000 NU Form 10-Q for the Quarter
Ended June 30, 2000, File No. 1-5324)

4 Instruments defining the rights of security holders, including
indentures

4.1 Northeast Utilities

4.1.1 Indenture dated as of December 1, 1991 between Northeast
Utilities and IBJ Schroder Bank & Trust Company, with
respect to the issuance of Debt Securities. (Exhibit
4.1.1, 1991 NU Form 10-K, File No. 1-5324)

4.1.1.1 First Supplemental Indenture dated as of December 1,
1991 between Northeast Utilities and IBJ Schroder
Bank & Trust Company, with respect to the issuance
of Series A Notes. (Exhibit 4.1.2, 1991 NU Form
10-K, File No. 1-5324)

4.1.1.2 Second Supplemental Indenture dated as of March 1,
1992 between Northeast Utilities and IBJ Schroder
Bank & Trust Company with respect to the issuance of
8.38% Amortizing Notes. (Exhibit 4.1.3, 1992 NU
Form 10-K, File No. 1-5324)

4.1.2 Rights Agreement dated as of February 23, 1999, between
Northeast Utilities and Northeast Utilities Service
Company, as Rights Agent. (Exhibit 1 to NU's
Registration Statement on Form 8-A, filed on April 12,
1999, File No. 001-05324).

4.1.2.1 Amendment to Rights Agreement. (Exhibit 3 to NU's
Current Report on Form 8-K dated October 13, 1999,
File No. 1-5324).

4.1.2.2 Second Amendment to Rights Agreement. (Exhibit 3 to
NU Form 8-A-12B-A dated February 1, 2002, File No.
001-05324 and Exhibit B-3 to NU Rule 35-CERT, dated
February 1, 2002, File No. 070-09463).

4.1.3 Indenture dated as of April 1, 2002, between NU and the
Bank of New York as Trustee. (Exhibit A-3 to NU 35-CERT
filed April 9, 2002, File No. 70-9535)

4.1.3.1 First Supplemental Indenture dated as of April 1,
2002, between NU and the Bank of New York as
Trustee, relating to $263M of Senior Notes,
Series A, due 2012. (Exhibit A-4 to NU 35-CERT
filed April 9 2002, File No. 70-9535)

4.1.4 Revolving Credit Agreement among NU and the Banks named
therein, dated November 12, 2002. (Exhibit B-3 to NU 35-
CERT filed November 21, 2002, File No. 70-9755)

4.2 The Connecticut Light and Power Company

4.2.1 Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, Trustee, dated as of May 1, 1921.
(Composite including all twenty-four amendments to May 1,
1967.) (Exhibit 4.1.1, 1989 NU Form 10-K, File No. 1-
5324)

Supplemental Indentures to the Composite May 1, 1921
Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, dated as of:

4.2.1.1 June 1, 1994. (Exhibit 4.2.15,
1994 NU Form 10-K, File No. 1-5324)

4.2.1.2 October 1, 1994. (Exhibit 4.2.16, 1994 NU Form
10-K, File No. 1-5324)

4.2.2 Financing Agreement between Industrial Development
Authority of the State of New Hampshire and CL&P
(Pollution Control Bonds, 1986 Series) dated as of
December 1, 1986. (Exhibit C.1.47, 1986 NU Form U5S,
File No. 30-246)

4.2.3 Financing Agreement between Industrial Development
Authority of the State of New Hampshire and
CL&P (Pollution Control Bonds, 1988 Series) dated as of
October 1, 1988. (Exhibit C.1.55, 1988 NU Form U5S, File
No. 30-246)

4.2.4 Loan and Trust Agreement among Business Finance Authority
of the State of New Hampshire, CL&P and the Trustee
(Pollution Control Bonds, 1992 Series A) dated as of
December 1, 1992. (Exhibit C.2.33, 1992 NU Form U5S,
File No. 30-246)

4.2.5 Loan Agreement between Connecticut Development Authority
and CL&P (Pollution Control Bonds - Series A, Tax Exempt
Refunding) dated as of September 1, 1993. (Exhibit
4.2.21, 1993 NU Form 10-K, File No. 1-5324)

4.2.6 Loan Agreement between Connecticut Development Authority
and CL&P (Pollution Control Bonds - Series B, Tax Exempt
Refunding) dated as of September 1, 1993. (Exhibit
4.2.22, 1993 NU Form 10-K, File No. 1-5324)

4.2.7 Amended and Restated Loan Agreement between Connecticut
Development Authority and CL&P (Pollution Control Revenue
Bond - 1996A Series) dated as of May 1, 1996 and Amended
and Restated as of January 1, 1997. (Exhibit 4.2.24,
1996 NU Form 10-K, File No. 1-5324)

4.2.7.1 Amended and Restated Indenture of Trust
between Connecticut Development Authority
and the Trustee (CL&P Pollution Control Revenue
Bond-1996A Series), dated as of May 1, 1996 and
Amended and Restated as of January 1, 1997.
(Exhibit 4.2.24.1, 1996 NU Form 10-K, File No.
1-5324)

4.2.7.2 Standby Bond Purchase Agreement
among CL&P, Bank of New York as Purchasing
Agent and the Banks Named therein, dated
October 24, 2000. (Exhibit 4.2.24.2 of 2000 NU
Form 10-K, File No. 1-5324)

4.2.7.3 AMBAC Municipal Bond Insurance
Policy issued by the Connecticut Development
Authority (CL&P Pollution Control Revenue Bond-
1996A Series), effective January 23, 1997.
(Exhibit 4.2.24.3, 1996 NU Form 10-K, File No.
1-5324)

4.2.7.4 Amendment No. 2 to the Standby Bond
Purchase Agreement dated as of September 9,
2002, among CL&P, The Bank of New York, and
the Participating Banks referred to therein.
(Exhibit 4.2.7.4, 2002 NU Form 10-Q for the
Quarter Ended September 30, 2002, File No. 1-
5324)

4.2.8 Amended and Restated Receivables Purchase and Sale
Agreement dated as of March 30, 2001 (CL&P and CL&P
Receivables Corporation (CRC)). (Exhibit 10.1, 2001 NU
10-Q for the Quarter Ended September 30, 2001 (File No. 1-
5324)

#4.2.8.1 Amendment No. 2 to the Purchase and Sale
Agreement dated as of July 10, 2002 (CL&P and
CRC).

4.2.9 Purchase and Contribution Agreement (CL&P and CRC), dated
as of September 30, 1997 (Exhibit 10.49.1, 1997 NU Form
10-K, File No. 1-5324)

#4.2.9.1 Amendment No. 2 to the Purchase and
Contribution Agreement between CL&P and CRC
dated as of March 30, 2001.

4.2.10 Revolving Credit Agreement among WMECO, CL&P, PSNH and
Yankee and the banks named therein, dated November 12,
2002. (Exhibit B-4 to 35-CERT filed November 21, 2002,
File No. 70-9755)

4.3 Public Service Company of New Hampshire

4.3.1 First Mortgage Indenture dated as of August 15, 1978
between PSNH and First Fidelity Bank, National
Association, New Jersey, now First Union National Bank,
Trustee, (Composite including all amendments to May 16,
1991). (Exhibit 4.4.1, 1992 NU Form 10-K, File No.
1-5324)

4.3.1.1 Tenth Supplemental Indenture dated as of May 1,
1991 between PSNH and First Fidelity Bank,
National Association, now First Union National
Bank. (Exhibit 4.1, PSNH Current Report on
Form 8-K dated February 10, 1992, File No. 1-
6392)

4.3.1.2 Twelfth Supplemental Indenture dated as of
December 1, 2001 between PSNH and First Union
National Bank. (Exhibit 4.3.1.2, 2001 NU Form
10-K, File No. 1-5324)

4.3.2 Series D (Tax Exempt Refunding) Amended and Restated
PCRB Loan and Trust Agreement dated as of April 1, 1999.
(Exhibit 4.3.6, 1999 NU Form 10-K, File No. 1-5324)

4.3.3 Series E (Tax Exempt Refunding) Amended & Restated
PCRB Loan and Trust Agreement dated as of April 1, 1999.
(Exhibit 4.3.7, 1999 NU Form 10-K, File No. 1-5324)

4.3.4 Series A Loan and Trust Agreement among Business Finance
Authority of the State of New Hampshire and PSNH and
State Street Bank and Trust Company, as Trustee (Tax
Exempt Pollution Control Bonds) dated as of October 1,
2001. (Exhibit 4.3.4, 2001 NU Form 10-K, File No. 1-
5324)

4.3.5 Series B Loan and Trust Agreement among Business Finance
Authority of the State of New Hampshire and PSNH and
State Street Bank and Trust Company, as Trustee (Tax
Exempt Pollution Control Bonds) dated as of October 1,
2001. (Exhibit 4.3.5, 2001 NU Form 10-K, File No. 1-
5324)

4.3.6 Series C Loan and Trust Agreement among Business Finance
Authority of the State of New Hampshire and PSNH and
State Street Bank and Trust Company, as Trustee (Tax
Exempt Pollution Control Bonds) dated as of October1,
2001. (Exhibit 4.3.6, 2001 NU Form 10-K, File No. 1-5324)

4.3.7 Revolving Credit Agreement among WMECO, CL&P, PSNH and
Yankee and the banks named therein, dated November 12,
2002. (Exhibit B-4 to 35-CERT filed November 21, 2002,
File No. 70-9755)

4.4 Western Massachusetts Electric Company

4.4.1 Loan Agreement between Connecticut Development Authority
and WMECO, (Pollution Control Bonds - Series A, Tax
Exempt Refunding) dated as of September 1, 1993. (Exhibit
4.4.13, 1993 NU Form 10-K, File No. 1-5324)

4.4.2 Revolving Credit Agreement among WMECO, CL&P, PSNH and
Yankee and the banks named therein, dated November 12,
2002. (Exhibit B-4 to 35-CERT filed November 21, 2002,
File No. 70-9755)

10 Material Contracts

10.1 Stockholder Agreement dated as of July 1, 1964 among the
stockholders of CYAPC. (Exhibit 10.1, 1994 NU Form 10-K, File No.
1-5324)

10.2 Form of Power Contract dated as of July 1, 1964 between CYAPC and
each of CL&P, HELCO, PSNH and WMECO. (Exhibit 10.2, 1994 NU Form
10-K, File No. 1-5324)

10.2.1 Form of Additional Power Contract dated as of April 30,
1984, between CYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.2.1, 1994 NU Form 10-K, File No. 1-5324)

10.2.2 Form of 1987 Supplementary Power Contract dated as of
April 1, 1987, between CYAPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.2.6, 1987 NU Form 10-K, File No. 1-
5324)

10.3 Capital Funds Agreement dated as of September 1, 1964 between CYAPC
and CL&P, HELCO, PSNH and WMECO. (Exhibit 10.3, 1994 NU Form 10-K,
File No. 1-5324)

10.4 Stockholder Agreement dated December 10, 1958 between YAEC and
CL&P, HELCO, PSNH and WMECO. (Exhibit 10.4, 1993 NU Form 10-K,
File No. 1-5324)

10.5 Form of Amendment No. 3, dated as of April 1, 1985, to Power
Contract between YAEC and each of CL&P, PSNH and WMECO, including a
composite restatement of original Power Contract dated June 30,
1959 and Amendment No. 1 dated April 1, 1975 and Amendment No. 2
dated October 1, 1980. (Exhibit 10.5, 1988 NU Form 10-K, File No. 1-
5324.)

10.5.1 Form of Amendment No. 4 to Power Contract, dated May 6,
1988, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.1, 1989 NU Form 10-K, File No. 1-5324)

10.5.2 Form of Amendment No. 5 to Power Contract, dated June 26,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.2, 1989 NU Form 10-K, File No. 1-5324)

10.5.3 Form of Amendment No. 6 to Power Contract, dated July 1,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.3, 1989 NU Form 10-K, File No. 1-5324)

10.5.4 Form of Amendment No. 7 to Power Contract, dated
February 1, 1992, between YAEC and each of CL&P, PSNH and
WMECO. (Exhibit 10.5.4, 1993 NU Form 10-K, File No. 1-
5324)

10.6 Stockholder Agreement dated as of May 20, 1968 among
stockholders of MYAPC. (Exhibit 10.6, 1997 NU Form 10-K, File No.
1-5324)

10.7 Form of Power Contract dated as of May 20, 1968 between MYAPC
and each of CL&P, HELCO, PSNH and WMECO. (Exhibit 10.7, 1997 Form
10-K, File No. 1-5324)

10.7.1 Form of Amendment No. 1 to Power Contract dated as of
March 1, 1983 between MYAPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.7.1, 1993 NU Form 10-K, File No. 1-
5324)

10.7.2 Form of Amendment No. 2 to Power Contract dated as of
January 1, 1984 between MYAPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.7.2, 1993 NU Form 10-K, File No. 1-
5324)

10.7.3 Form of Amendment No. 3 to Power Contract dated as of
October 1, 1984 between MYAPC and each of CL&P, PSNH and
WMECO. (Exhibit No. 10.7.3, 1994 NU Form 10-K, File No.
1-5324)

10.7.4 Form of Additional Power Contract dated as of February 1,
1984 between MYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.7.4, 1993 NU Form 10-K, File No. 1-5324)

10.8 Capital Funds Agreement dated as of May 20, 1968 between MYAPC
and CL&P, PSNH, HELCO and WMECO. (Exhibit 10.8, 1997 NU Form 10-K,
File No. 1-5324)

10.8.1 Amendment No. 1 to Capital Funds Agreement, dated as of
August 1, 1985, between MYAPC, CL&P, PSNH and WMECO.
(Exhibit No. 10.8.1, 1994 NU Form 10-K, File No. 1-5324)

10.9 Sponsor Agreement dated as of August 1, 1968 among the
sponsors of VYNPC. (Exhibit 10.9, 1997 NU Form 10-K, File No.
1-5324)

10.10 Form of Power Contract dated as of February 1, 1968 between
VYNPC and each of CL&P, HELCO, PSNH and WMECO. (Exhibit 10.10,
1997 NU Form 10-K, File No. 1-5324)

10.10.1 Form of Amendment to Power Contract dated as of June 1,
1972 between VYNPC and each of CL&P, HELCO, PSNH and
WMECO. (Exhibit 5.22, File No. 2-47038)

10.10.2 Form of Second Amendment to Power Contract dated as of
April 15, 1983 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.2, 1993 NU Form 10-K, File No. 1-
5324)

10.10.3 Form of Third Amendment to Power Contract dated as of
April 24, 1985 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit No. 10.10.3, 1994 NU Form 10-K, File No.
1-5324)

10.10.4 Form of Fourth Amendment to Power Contract
dated as of June 1, 1985 between VYNPC and each of CL&P,
PSNH and WMECO. (Exhibit No. 10.10.4, 1996 NU Form 10-K,
File No. 1-5324)

10.10.5 Form of Fifth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.5, NU Form 10-K, File No. 1-
5324)

10.10.6 Form of Sixth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.6, 1990 NU Form 10-K, File No. 1-
5324)

10.10.7 Form of Seventh Amendment to Power Contract dated as of
June 15, 1989 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.7, 1990 NU Form 10-K, File No. 1-
5324)

10.10.8 Form of Eighth Amendment to Power Contract dated as of
December 1, 1989 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.8, 1990 NU Form 10-K, File No. 1-
5324)

10.10.9 Form of Additional Power Contract dated as of February 1,
1984 between VYNPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.10.9, 1993 NU Form 10-K, File No. 1-5324)

*10.10.10 Form of Amendatory Agreement, dated as of September 21,
2001 between VYNPC and each of CL&P, PSNH and WMECO.

10.11 Capital Funds Agreement dated as of February 1, 1968
between VYNPC and CL&P, HELCO, PSNH and WMECO. Exhibit 10.11,
1997 NU Form 10-K, File No. 1-5324)

10.11.1 Form of First Amendment to Capital Funds Agreement dated
as of March 12, 1968 between VYNPC and CL&P, HELCO, PSNH
and WMECO. (Exhibit 10.11.1, 1997 NU Form 10-K, File
No. 1-5324)

10.11.2 Form of Second Amendment to Capital Funds Agreement dated
as of September 1, 1993 between VYNPC and CL&P, HELCO,
PSNH and WMECO. (Exhibit 10.11.2, 1993 NU Form 10-K,
File No. 1-5324)

10.12 Agreement dated July 19, 1990, among NAESCO and Seabrook Joint
owners with respect to operation of Seabrook. (Exhibit 10.53,
1990 NU Form 10-K, File No. 1-5324)

10.13 Sharing Agreement between CL&P, WMECO, HP&E, HWP and PSNH dated
as of June 1, 1992. (Exhibit 10.17, 1992 NU Form 10-K, File No.
1-5324)

10.14 Rate Agreement by and between NUSCO, on behalf of NU, and the
Governor of the State of New Hampshire and the New Hampshire
Attorney General dated as of November 22, 1989. (Exhibit 10.44,
1989 NU Form 10-K, File No. 1-5324)

10.14.1 First Amendment to Rate Agreement dated as of
December 5, 1989. (Exhibit 10.16.1, 1995 NU Form 10-K,
File No. 1-5324)

10.14.2 Second Amendment to Rate Agreement dated as of
December 12, 1989. (Exhibit 10.16.2, 1995 NU Form 10-K,
File No. 1-5324)

10.14.3 Third Amendment to Rate Agreement dated as of
December 3, 1993. (Exhibit 10.16.3, 1995 NU Form 10-K,
File No. 1-5324)

10.14.4 Fourth Amendment to Rate Agreement dated as of
September 21, 1994. (Exhibit 10.16.4, 1995 NU Form 10-K,
File No. 1-5324)

10.14.5 Fifth Amendment to Rate Agreement dated as of
September 9, 1994. (Exhibit 10.16.5, 1995 NU Form 10-K,
File No. 1-5324)

10.15 Agreement to Settle PSNH Restructuring. (Exhibit 10.2, 1999 NU
Form 10-Q for the Quarter Ended June 30, 1999, File No. 1-5324)

10.15.1 Revised and Conformed Agreement to Settle PSNH
Restructuring, dated August 2, 1999, conformed June 23
and executed on September 22, 2000. (Exhibit 10.15.1,
2001 NU Form 10-K, File No. 1-5324)

10.16 Merger Settlement Agreement between NU, Con Edison and NHPUC dated
as of December 6, 2000. (Exhibit O.1, to NU's U-1 Application, File
No. 70-9711)

10.17 Form of Seabrook Power Contracts between PSNH and NAEC, as amended
and restated. (Exhibit 10.45, 1992 NU Form 10-K, File No. 1-5324)

10.18 Agreement (composite) for joint ownership, construction and
operation of New Hampshire nuclear unit, as amended through the
November 1, 1990 twenty-third amendment. (Exhibit No. 10.17, 1994
NU Form 10-K, File No. 1-5324)

10.18.1 Memorandum of Understanding dated November 7,
1988 between PSNH and Massachusetts Municipal Wholesale
Electric Company. (Exhibit 10.17, PSNH 1989 Form 10-K,
File No. 1-6392)

10.18.2 Agreement of Settlement among Joint Owners dated as of
January 13, 1989. (Exhibit 10.13.21, 1988 NU Form 10-K,
File No. 1-5324)

10.18.2.1 Supplement to Settlement Agreement,
dated as of February 7, 1989, between PSNH and
Central Maine Power Company. (Exhibit 10.18.1,
PSNH 1989 Form 10-K, File No. 1-6392)

10.19 Amended and Restated Agreement for Seabrook Project Disbursing
Agent dated as of November 1, 1990. (Exhibit 10.4.7, File No. 33-
35312)

10.19.1 Form of First Amendment to Exhibit 10.22.
(Exhibit 10.4.8, File No. 33-35312)

10.19.2 Form (Composite) of Second Amendment to Exhibit
10.22. (Exhibit 10.18.2, 1993 NU Form 10-K, File No. 1-
5324)

10.20 Agreement dated November 1, 1974 for Joint Ownership, Construction
and Operation of William F. Wyman Unit No. 4 among PSNH, Central
Maine Power Company and other utilities. (Exhibit 5.16, File No. 2-
52900)

10.20.1 Amendment to Exhibit 10.20 dated June 30, 1975.
(Exhibit 5.48, File No. 2-55458)

10.20.2 Amendment to Exhibit 10.20 dated as of
August 16, 1976. (Exhibit 5.19, File No. 2-58251)

10.20.3 Amendment to Exhibit 10.20 dated as of
December 31, 1978. (Exhibit 5.10.3, File No. 2-64294)

10.21 Form of Service Contract dated as of July 1, 1966 between each of
NU, CL&P and WMECO and NUSCO. (Exhibit 10.20, 1993 NU Form 10-K,
File No. 1-5324)

10.21.1 Service Contract dated as of June 5, 1992
between PSNH and NUSCO. (Exhibit 10.12.4, 1992 NU Form
10-K, File No. 1-5324)

10.21.2 Form of Annual Renewal of Service Contract.
(Exhibit 10.20.3, 1993 NU Form 10-K, File No. 1-5324)

10.22 Service Contract dated as of January 4,1999 between NUSCO and NGC.
(Exhibit 10.7 to NGC Registration Statement S-4 dated December 6,
2001, File No. 333-74636)

10.22.1 Form of Service Agreement Renewals, dated
December 31, 1999 and December 31, 2000, of Service
Contract, dated as of January 4, 1999, between NUSCO and
NGC. (Exhibit 10.7.1 to NGC Registration Statement S-4
dated December 6, 2001, File No. 333-74636)

10.23 Management and Operating Agreement, dated February 1, 2000, between
NGC and NGS. (Exhibit 10.6 to NGC Registration Statement S-4 dated
December 6, 2001, File No. 333-74636)

10.23.1 Amendment No. 1, dated March 1, 2000, to Management and
Operating Agreement, dated February 1, 2000, between NGC
and NGS. (Exhibit 10.6.1 to NGC Registration Statement
S-4 dated December 6, 2001, File No. 333-74636)

10.24 Memorandum of Understanding between CL&P, HELCO, HP&E, HWP and
WMECO dated as of June 1, 1970 with respect to pooling of
generation and transmission. (Exhibit 13.32, File No. 2-38177)

10.24.1 Amendment to Memorandum of Understanding
between CL&P, HELCO, HP&E, HWP and WMECO dated as of
February 2, 1982 with respect to pooling of generation
and transmission. (Exhibit 10.21.1, 1993 NU Form 10-K,
File No. 1-5324)

10.24.2 Amendment to Memorandum of Understanding between
CL&P, HELCO, HP&E, HWP and WMECO dated as of
January 1, 1984 with respect to pooling of generation and
transmission. (Exhibit 10.21.2, 1994 NU Form 10-K, File
No. 1-5324)

10.24.3 Second Amendment to Memorandum of Understanding between
CL&P, HELCO, HP&E, HWP and WMECO dated as of June 8, 1999
with respect to pooling of generation and transmission.
(Exhibit 10.23.3, 1999 NU Form 10-K, File No. 1-5324)

10.25 Restated NEPOOL Power Pool Agreement. (restated by the Sixty-Ninth
Agreement dated as of December 31, 2000, and includes the Restated
NEPOOL Open Access Transmission Tariff)

10.25.1 Form of Interim ISO Agreement (Attachment to
Thirty-Third Amendment to Exhibit 10.26 dated as of
December 31, 1996). (Exhibit 10.23.6, 1996 NU Form 10-K,
File No. 1-5324)

*10.25.1.1 Amendment No. 3 to Interim
ISO Agreement dated as of April 30, 2002.

10.25.2 Seventieth Agreement Amending NEPOOL Agreement (ISO
Capital Funding Tariff) (FERC Docket ER-01-1460-000)
dated as of February 2, 2001. (Exhibit 10.23.2, 2001 NU
Form 10-K, File No. 1-5324)

10.25.3 Seventy-First Agreement Amending NEPOOL Agreement (Late
Payment Fees) (FERC Docket ER-01-1460-000) dated as of
February 2, 2001. (Exhibit 10.23.3, 2001 NU Form 10-K,
File No. 1-5324)

10.25.4 Seventy-Second Agreement Amending NEPOOL Agreement (Net
Commitment Period Compensation "NCPC") (FERC Docket ER-01-
1891-000) dated as of April 6, 2001. (Exhibit 10.23.4,
2001 NU Form 10-K, File No. 1-5324)

10.25.5 Seventy-Third Agreement Amending NEPOOL Agreement
(Schedule 2 Changes) (FERC Docket ER-01-2161-000) dated
as of May 9, 2001. (Exhibit 10.23.5, 2001 NU Form 10-K,
File No. 1-5324)

10.25.6 Seventy-Fourth Agreement Amending NEPOOL Agreement
(Review Bond Amendment) (FERC Docket ER-01-2140-000)
dated as of May 9, 2001. (Exhibit 10.23.6, 2001 NU Form
10-K, File No. 1-5324)

10.25.7 Seventy-Sixth Agreement Amending NEPOOL Agreement
(Compliance with June 13, 2001 Orders) (FERC Dockets EL00-
62-004, et al. and ER-98-3853-005) dated as of June 29,
2001. (Exhibit 10.23.7, 2001 NU Form 10-K, File No. 1-
5324)

10.25.8 Seventy-Eighth Agreement Amending NEPOOL Agreement
(Revised Sections 18.4 and 18.5) (FERC Docket EL00-62-
036) dated as of September 24, 2001. (Exhibit 10.23.8,
2001 NU Form 10-K, File No. 1-5324)

10.25.9 Seventy-Ninth Agreement Amending NEPOOL Agreement (ICA
Compliance Amendment) (FERC Docket EL00-62-036) dated as
of September 24, 2001. (Exhibit 10.23.9, 2001 NU Form
10-K, File No. 1-5324)

10.25.10 Eightieth Agreement Amending NEPOOL Agreement (Generation
Information System "GIS" Agreement) dated as of
October 12, 2001. (Exhibit 10.23.10, 2001 NU Form 10-K,
File No. 1-5324)

10.25.11 Eighty-First Agreement Amending NEPOOL Agreement
(Restatement of Financial Assurance Policies) dated as of
December 7, 2001. (Exhibit 10.23.11, 2001 NU Form 10-K,
File No. 1-5324)

*10.25.12 Eighty-Second Agreement Amending NEPOOL Agreement
(Amendment to Schedule 16) dates as of January 18, 2002.

*10.25.13 Eighty-Third Agreement Amending NEPOOL (Financial
Assurance and Billing Policies) dated as of March 8,
2002.

*10.25.14 Eighty-Fourth Agreement Amending NEPOOL (Integration of
Merchant Transmission Facilities) dated as of April 5,
2002.

*10.25.15 Eighty-Fifth Agreement Amending NEPOOL (Non Participant
FTR Financial Assurance Policy) dated as of May 9, 2002.

*10.25.16 Eighty-Sixth Agreement Amending NEPOOL
(Interruptible/Dispatchable Loads for Objective
Capability) dated as of May 3, 2002.

*10.25.17 Eighty-Seventh Agreement Amending NEPOOL (Financial
Assurance Policies and Billing Procedures) dated as of
June 21, 2002.

*10.25.18 Eighty-Eighth Agreement Amending NEPOOL (Schedule 16
Amendment) dated as of October 4, 2002).

*10.25.19 Eighty-Ninth Agreement Amending NEPOOL (Technical
Committee Voting Changes) dated as of October 4, 2002.

*10.25.20 Ninetieth Agreement Amending NEPOOL (Excess Financial
Assurance) dated as of October 4, 2002.

*10.25.21 Ninety-First Agreement Amending NEPOOL (Demand Response
Provider Changes) dated as of November 1, 2002.

*10.25.22 Ninety-Second Agreement Amending NEPOOL (NEPOOL SMD -
Conforming RNA Changes) dated as of November 1, 2002.

*10.25.23 Ninety Third Agreement Amending NEPOOL (NEPOOL SMD -
Conforming Tariff Charges) dated as of November 1, 2002.

10.26 Agreements among New England Utilities with respect to the Hydro-
Quebec interconnection projects. (See Exhibits 10(u) and 10(v);
10(w), 10(x), and 10(y), 1990 and 1988, respectively, Form 10-K of
New England Electric System, File No. 1-3446.)

10.27 Lease dated as of April 14, 1992 between RRR and NUSCO with respect
to the Berlin, Connecticut headquarters (office lease). (Exhibit
10.29, 1992 NU Form 10-K, File No. 1-5324)

10.27.1 Lease dated as of April 14, 1992 between RRR
and NUSCO with respect to the Berlin, Connecticut
headquarters (project lease). (Exhibit 10.29.1, 1992 NU
Form 10-K, File No. 1-5324)

10.28 Lease and Agreement, dated as of December 15, 1988, by and between
WMECO and Bank of New England, N.A., with BNE Realty Leasing
Corporation of North Carolina. (Exhibit 10.63, 1988 NU Form 10-K,
File No. 1-5324.)

10.29 Note Agreement dated April 14, 1992, by and between RRR and
Purchasers named therein (Connecticut General Life Insurance
Company, Life Insurance Company of North America, INA Life
Insurance Company of New York, Life Insurance Company of Georgia),
with respect to RRR's sale of $15 million of guaranteed senior
secured notes due 2007 and $28 million of guaranteed senior secured
notes due 2017. (Exhibit 10.52, 1992 NU Form 10-K, File No. 1-
5324)

10.29.1 Amendment to Note Agreement, dated
September 26, 1997. (Exhibit 10.31.1, 1997 NU Form 10-K,
File No. 1-5324)

10.29.2 Note Guaranty dated April 14, 1992 by Northeast
Utilities pursuant to Note Agreement dated April 14, 1992
between RRR and Note Purchasers, for the benefit of The
Connecticut National Bank as Trustee, the Purchasers and
the owners of the notes. (Exhibit 10.52.1, 1992 NU Form
10-K, File No. 1-5324)

10.29.2.1 Extension of Note Guaranty, dated
September 26, 1997. (Exhibit 10.31.2.1, 1997
NU Form 10-K, File No. 1-5324)

10.29.3 Assignment of Leases, Rents and Profits,
Security Agreement and Negative Pledge, dated as of
April 14, 1992 among RRR, NUSCO and The Connecticut
National Bank as Trustee, securing notes sold by RRR
pursuant to April 14, 1992 Note Agreement. (Exhibit
10.52.2, 1997 NU Form 10-K, File No. 1-5324)

10.29.3.1 Modification of and Confirmation of
Assignment of Leases, Rents and Profits,
Security Agreement and Negative Pledge, dated
as of September 26, 1997. (Exhibit 10.31.3.1,
1997 NU Form 10-K, File No. 1-5324)

10.29.4 Purchase and Sale Agreement, dated July 28,
1997 by and between RRR and the Sellers and Purchasers
named therein. (Exhibit 10.31.4, 1997 NU Form 10-K, File
No. 1-5324)

10.29.5 Purchase and Sale Agreement, dated September 26, 1997
by and between RRR and the Purchaser named therein.
(Exhibit 10.31.5, 1992 NU Form 10-K, File No. 1-5324)

10.30 NU Executive Incentive Plan, effective as of January 1, 1991.
(Exhibit 10.44, NU 1991 Form 10-K, File No. 1-5324)

10.31 Northeast Utilities Incentive Plan, effective as of January 1,
1998. (Exhibit 10.35.1, 1998 NU Form 10-K, File No. 1-5324)

10.31.1 Amendment to Northeast Utilities Incentive
Plan, effective as of February 23, 1999. (Exhibit
10.35.1.1, 1998 NU Form 10-K, File No. 1-5324)

10.32 Supplemental Executive Retirement Plan for Officers of NU system
Companies, Amended and Restated effective as of January 1, 1992.
(Exhibit 10.45.1, NU Form 10-Q for the Quarter Ended June 30, 1992,
File No. 1-5324)

10.32.1 Amendment 1 to Supplemental Executive
Retirement Plan, effective as of August 1, 1993.
(Exhibit 10.35.1, 1993 NU Form 10-K, File No. 1-5324)

10.32.2 Amendment 2 to Supplemental Executive
Retirement Plan, effective as of January 1, 1994.(Exhibit
10.35.2, 1993 NU Form 10-K, File No. 1-5324)

10.32.3 Amendment 3 to Supplemental Executive
Retirement Plan, effective as of January 1, 1996.
(Exhibit 10.36.3, 1995 NU Form 10-K, File No. 1-5324)

10.32.4 Amendment 4 to Supplemental Executive
Retirement Plan, effective as of February 26, 2002.
(Exhibit 10.35.4, 2001 NU Form 10-K, File No. 1-5324)

10.32.5 Amendment 5 to Supplemental Executive
Retirement Plan, effective as of November 1, 2001.
(Exhibit 10.35.5, 2001 NU Form 10-K, File No. 1-5324)

*10.33 Trust under Supplemental Executive Retirement Plan dated May 2, 1994.

10.34 Special Severance Program for Officers of NU system companies, as
adopted on July 15, 1998. (Exhibit 10.37, 1998 NU Form 10-K, File
No. 1-5324)

10.34.1 Amendment to Special Severance Program, effective as of
February 23, 1999. (Exhibit 10.37.1, 1998 NU Form 10-K,
File No. 1-5324)

10.34.2 Amendment to Special Severance Program, effective as of
September 14, 1999. (Exhibit 10.3, 1999 NU Form 10-Q for
the Quarter Ended September 30, 1999, File No. 1-5324)

10.35 Loan Agreement dated as of December 2, 1991, by and between NU and
Mellon Bank, N.A., as Trustee, with respect to NU's loan of $175
million to an ESOP trust. (Exhibit 10.46, 1991 NU Form 10-K, File
No. 1-5324)

10.35.1 First Amendment to Loan Agreement dated February 7, 1992.
(Exhibit 10.36.1, 1993 NU Form 10-K, File No. 1-5324)

10.35.2 Loan Agreement dated as of March 19, 1992 by and between
NU and Mellon Bank, N.A., as Trustee, with respect to NU's
loan of $75 million to the ESOP trust. (Exhibit 10.49.1,
1992 NU Form 10-K, File No. 1-5324)

10.35.3 Second Amendment to Loan Agreement dated April 9, 1992.
(Exhibit 10.36.3, 1993 NU Form 10-K, File No. 1-5324)

10.36 Indenture Mortgage, dated as of October 18, 2001 between NGC and
The Bank of New York, as trustee. (Exhibit 4.1 to NGC Registration
Statement S-4 dated December 6, 2001, File No. 333-74636)

10.36.1 First Supplemental Indenture Mortgage, dated as of
October 18, 2001 between NGC and The Bank of New York, as
trustee. (Exhibit 4.2 to NGC Registration Statement S-4
dated December 6, 2001, File No. 333-74636)

10.37 Employment Agreement with Michael G. Morris. (Exhibit 10.39, 1997
NU Form 10-K, File No. 1-5324)

10.37.1 Amendment to Morris Employment Agreement, dated as of
February 23, 1999. (Exhibit 10.39.1, 1998 NU Form 10-K,
File No. 1-5324)

10.37.2 Amendment to Morris Employment Agreement, dated as of
June 28, 2001. (Exhibit 10.41.2 to 2001 NU Form 10-Q for
the Quarter Ending September 30, 2001, File No. 1-5324)

10.37.3 Amendment to Morris Employment Agreement, dated as of
September 11, 2001. (Exhibit 10.41.3 to 2001 NU Form 10Q
for the Quarter Ending September 30, 2001, File No.
1-5324)

10.37.4 Employment Agreement with Michael G. Morris dated as of
August 20, 2002. (Exhibit 10.38.4 to 2002 NU Form 10-Q
for the Quarter Ending September 30, 2002, File No. 1-
5324)

10.38 Arrangement with Michael G. Morris with Respect to Seabrook.
(Exhibit 10.38.4 to 2002 NU Form 10-Q for the Quarter Ending
September 30, 2002, File No. 1-5324)

10.39 Arrangement with Michael G. Morris with respect to use of corporate
airplane.

10.40 Transition and Retirement Agreement with Bernard M. Fox. (Exhibit
10.39, 1996 NU Form 10-K, File No. 1-5324)

10.41 Employment Agreement with Bruce M. Kenyon. (Exhibit 10.40, 1996 NU
Form 10-K, File No. 1-5324)

10.41.1 Amendment to Kenyon Employment Agreement, dated
as of January 13, 1998. (Exhibit 10.41.1, 1998 NU Form
10-K, File No. 1-5324)

10.41.2 Amendment to Kenyon Employment Agreement, dated
as of February 23, 1999. (Exhibit 10.41.2, 1998 NU Form
10-K, File No. 1-5324)

10.41.3 Amendment to Kenyon Employment Agreement, dated as of
May 14, 1999. (Exhibit 10.1, 1999 NU Form 10-Q for the
Quarter Ended March 31,1999, File No. 1-5324)

10.41.4 Amendment to Kenyon Employment Agreement, dated as of
March 21, 2000. (Exhibit 10.1, 2000 NU Form 10-Q for the
Quarter Ended March 31, 2000, File No. 1-5324)

10.41.5 Consulting Agreement with Bruce M. Kenyon, dated as of
December 21, 2002.

10.42 Employment Agreement with John H. Forsgren. (Exhibit 10.41, 1996
NU Form 10-K, File No. 1-5324)

10.42.1 Amendment to Forsgren Employment Agreement Exhibit 10.43,
dated as of January 13, 1998. (Exhibit 10.42.1, 1998 NU
Form 10-K, File No. 1-5324)

10.42.2 Amendment to Forsgren Employment Agreement, dated as of
February 23, 1999. (Exhibit 10.42.2, 1998 NU Form 10-K,
File No. 1-5324)

10.42.3 Amendment to Forsgren Employment Agreement, dated as of
May 10, 1999. (Exhibit 10.1, 1999 NU Form 10-Q for the
Quarter Ended March 31, 1999, File No. 1-5324)

10.42.4 Amendment to Forsgren Employment Agreement,
dated as of September 14, 1999. (Exhibit 10.4, 1999 NU
Form 10-Q for the Quarter Ended September 30, 1999, File
No. 1-5324)

10.42.5 Amendment to Forsgren Employment Agreement, dated as of
September 19, 2001. (Exhibit 10.44.7 to 2001 NU Form
10-Q for the Quarter Ending September 30, 2001, File No.
1-5324).

10.43 Supplemental Retirement Benefit with John H. Forsgren, dated
as of August 8, 2001. (Exhibit 10.44.5, 2001 NU Form 10-Q for
Quarter Ended September 30, 2001, File No. 1-5324)

10.44 Supplemental Compensation Arrangement with John J. Forsgren,
dated as of September 5, 2001. (Exhibit 10.44.6, 2001 NU Form
10-Q for Quarter Ended September 30, 2001, File No. 1-5324).

10.45 Employment Agreement with Cheryl W. Grise. (Exhibit 10.44,
1998 NU Form 10-K, File No. 1-5324)

10.45.1 Amendment to Grise Employment Agreement, dated as of
January 13, 1998. (Exhibit 10.44.1, 1998 NU Form 10-K,
File No. 1-5324)

10.45.2 Amendment to Grise Employment Agreement, dated as of
February 23, 1999. (Exhibit 10.44.2, 1998 NU Form 10-K,
File No. 1-5324)

10.45.3 Amendment to Grise Employment Agreement, dated as of
September 14, 1999. (Exhibit 10.5, 1999 NU Form 10-Q for
the Quarter Ended September 30, 1999, File No. 1-5324)

10.45.4 Amendment to Grise Employment Agreement dated as of
September 19, 2001. (Exhibit 10.46.5 to 2001 NU Form
10-Q for the Quarter Ending September 30, 2001, File No.
1-5324)

10.45.5 Supplemental Compensation Arrangement with Cheryl W.
Grise, dated as of September 17, 2001. (Exhibit 10.46.4,
2001 NU Form 10-Q for Quarter Ended September 30, 2001,
File No. 1-5324)

10.46 Agreement with Gary D. Simon dated March 16, 1998. (Exhibit 10.45,
2001 NU Form 10-K, File No. 1-5324)

10.47 Employment Agreement with Charles W. Shivery, dated as of June 1,
2002. (Exhibit 10.64 to NU Form 10-Q for the quarter ended June 30,
2002, File No. 1-5324)

10.48 Northeast Utilities Deferred Compensation Plan for Trustees,
Amended and Restated December 13, 1994. (Exhibit 10.39, 1995 NU
Form 10-K, File No. 1-5324)

10.48.1 Amendment to Deferred Compensation Plan, effective
November 5, 2001. (Exhibit 10.46.1, 2001 NU Form 10-K,
File No. 1-5324)

10.49 Deferred Compensation Plan for Officers of Northeast Utilities
System Companies adopted September 23, 1986. (Exhibit 10.40, 1995
NU Form 10-K, File No. 1-5324)

10.50 Northeast Utilities Deferred Compensation Plan for Executives,
adopted January 13, 1998. (Exhibit A.5, File No. 70-09185)

10.51 Reciprocal Support Agreement Among NNECO, NAESCO, CYAPC, YAEC and
NUSCO dated January 1, 1996. (Exhibit 10.41, 1995 NU Form 10-K,
File No. 1-5324)

10.52 Indenture of Mortgage and Deed of Trust dated July 1, 1989 between
Yankee Gas and the Connecticut National Bank, as Trustee (Exhibit
4.7, 1990 YES Form 10-K, File No. 0-10721)

10.53 Power Purchase and Sales Agreement, dated December 27, 1999 between
NGC and Select Energy (Exhibit 10.1 to NGC Registration Statement
S-4 dated December 6, 2001)

10.53.1 Consent and Agreement, dated as of October 18,
2001, among NU, Select Energy, The Bank of New York, as
trustee and NGC, dated as of October 18, 2001 between
NGC. (Exhibit 10.3 to NGC Registration Statement on Form
S-4 dated December 6, 2001)

10.53.2 Security Agreement, dated as of October 18,
2001, between NGC and The Bank of New York, as trustee.
(Exhibit 10.4 to NGC Registration Statement on Form S-4
dated December 6, 2001)

10.53.3 Form of Mortgage, Assignment of Leases and
Rents, Security Agreement and Fixture Filing, dated as of
October 18, 2001, by NGC in favor of The Bank of New
York, as Trustee. (Exhibit 10.5 to NGC Registration
Statement on Form S-4 dated December 6, 2001)

10.54 CL&P Transition Property Purchase and Sale Agreement dated as of
March 30, 2001. (Exhibit 10.55, 2001 CL&P Form 10-K, File No. 0-
11419)

10.55 CL&P Transition Property Servicing Agreement dated as of March 30,
2001. (Exhibit 10.56, 2001 NU Form 10-K, File No. 1-5324)

10.56 PSNH Purchase and Sale Agreement with PSNH Funding LLC dated as of
April 25, 2001. (Exhibit 10.57, 2001 NU Form 10-K, File No. 1-
5324)

10.57 PSNH Servicing Agreement with PSNH Funding LLC dated as of
April 25, 2001. (Exhibit 10.58, 2001 NU Form 10-K, File No. 1-
5324)

10.58 PSNH Purchase and Sale Agreement with PSNH Funding LLC2 dated as of
January 30, 2002. (Exhibit 10.59 2001 NU Form 10-K, File No. 1-
5324)

10.59 PSNH Servicing Agreement with PSNH Funding LLC2 dated as of
January 30, 2002. (Exhibit 10.60, 2001 NU Form 10-K, File No. 1-
5324)

10.60 WMECO Transition Property Purchase and Sale Agreement dated as of
May 17, 2001. (Exhibit 10.61, 2001 NU Form 10-K, File No. 1-5324)

10.61 WMECO Transition Property Servicing Agreement dated as of May 17,
2001. (Exhibit 10.62, 2001 NU Form 10-K, File No. 1-5324)

12 Ratio of Earnings to Fixed Charges

13 Annual Report to Security Holders (Each of the Annual Reports is filed
only with the Form 10-K of that respective registrant.)

13.1 Portions of the Annual Report to Shareholders of NU (pages 15 to
64) that have been incorporated by reference into this Form 10-K.

13.2 Annual Report of CL&P.

13.3 Annual Report of WMECO.

13.4 Annual Report of PSNH.

*21 Subsidiaries of the Registrant.

99.1 Certification of Michael G. Morris, Chairman, President and Chief
Executive Officer of Northeast Utilities and John H. Forsgren, Vice
Chairman, Executive Vice President and Chief Financial Officer of
Northeast Utilities, pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated
March 21, 2003

#99.2 Certification of Cheryl W. Grise, Chief Executive Officer of CL&P and
John H. Forsgren, Executive Vice President and Chief Financial
Officer of CL&P, pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated
March 21, 2003

@99.3 Certification of Cheryl W. Grise, Chief Executive Officer of PSNH and
John H. Forsgren, Executive Vice President and Chief Financial Officer
of PSNH, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, dated March 21, 2003

**99.4 Certification of Cheryl W. Grise, Chief Executive Officer of WMECO and
John H. Forsgren, Executive Vice President and Chief Financial Officer
of WMECO, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, dated March 21, 2003