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| ***Glossary                  of Terms*** |                                                                               |
|------------------------------------------|------------------------------------------------------------------------------------|
|                                     |                                                                               |
| AMEX                                     | American                  Stock Exchange                                           |
| Ashford                                  | Ashford                  Investments Inc.                                          |
| CES                                      | Competitive                  Energy Supplier                                       |
| Cornwallis                               | Cornwallis                  Court Developments Ltd                                 |
| EA                                       | Energy                  Atlantic, LLC                                              |
| EBIT                                     | Earnings                  Before Interest and Taxes                                |
| FAME                                     | Finance                  Authority of Maine                                        |
| FERC                                     | Federal                  Energy Regulatory Commission                              |
| FIN                                      | FASB                  Interpretation Number                                        |
| HCI                                      | HCI                  Systems Asset Management, LLC                                 |
| Maine                  Yankee            | Maine                  Yankee Atomic Power Company                                 |
| MAM                                      | Maine                  & Maritimes Corporation                                 |
| MAM                  USG                 | MAM                  Utility Services Group                                        |
| Me&NB                                | Maine &                  New Brunswick Electrical Power Company, Ltd |
| Mecel                                    | Mecel                  Properties Ltd                                              |
| MEPCO                                    | Maine                  Electric Power Company, Inc.                                |
| MPS                                      | Maine                  Public Service Company                                      |
| MPUC                                     | Maine Public                  Utilities Commission                            |
| MTI                                      | Maricor                  Technologies, Inc.                                        |
| MW                                       | Megawatt                                                                           |
| MWH                                      | Megawatt                  hour                                                     |
| NOI                                      | Notice                  of Inquiry                                                 |
| OATT                                     | Open                  Access Transmission Tariff                                   |
| OCI                                      | Other                  Comprehensive Income                                        |
| PCB                                      | Poly                  Chlorinated Bi-phenol                                        |
| PPA                                      | Power                  Purchase Agreement                                          |
| SFAS                                     | Statement                  of Financial Accounting Standards                       |
| SOS                                      | Standard                  Offer Service                                            |
| T&D                                  | Transmission                  and distribution                                     |
| TMG                                      | The                  Maricor Group                                                 |
| TMGC                                     | The                  Maricor Group, Canada Ltd                                     |
| TMGNE                                    | The                  Maricor Group New England                                     |
| WS                                       | Wheelabrator-Sherman                                                               |

----

**PART        1. FINANCIAL INFORMATION**

***Item        1. Financial Statements***

**MAM        is the parent holding company for the following wholly-owned        subsidiaries:**

| 1. | Maine                  Public Service Company (“MPS”) and its wholly-owned inactive Canadian                  subsidiary Maine & New Brunswick Electrical Power Company, Ltd                  (“Me&NB”); |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Energy                  Atlantic, LLC (“EA”), an inactive                  subsidiary; |
|----|----------------------------------------------------------------------------------------------------|

| 3. | The                  Maricor Group (“TMG”) and its wholly-owned United States subsidiary The                  Maricor Group New England (“TMGNE”) and TMG’s wholly-owned Canadian                  subsidiary The Maricor Group, Canada Ltd (“TMGC”), all of which are                  classified as discontinued operations.  As described later in                  this document, the operations of TMGNE ceased August 31,                  2007.  Substantially all of the assets of TMGC were sold in June                  2007.  In September 2007, TMGC purchased the shares of Mecel                  Properties Ltd from Maricor Properties                  Ltd. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | MAM                  Utility Services Group (“MAM                  USG”), a wholly-owned United States subsidiary, incorporated on September                  27, 2007.  MAM USG will provide utility-related services to                  external customers under the strategy announced in the 2006 Form                  10-K. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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***Maine        & Maritimes Corporation and Subsidiaries as of September 30,        2007***

----

***General        Descriptions of the Parent Company and its        Subsidiaries:***

| · | Maine                  & Maritimes Corporation is a holding company incorporated in the                  State                  of Maine, and is the ultimate parent company for all business                  segments.  MAM maintains investments in a regulated electric                  transmission and distribution utility operating within the State                  of Maine,                  United States of America, classified for financial reporting purposes                  as                  continuing operations.  MAM is headquartered in Presque Isle,                  Maine.   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Maine                  Public Service Company is a regulated electric transmission and                  distribution utility serving all of Aroostook County and a portion                  of                  Penobscot County in northern Maine.  Since March 1, 2000, the                  date retail electric competition in Maine commenced, customers                  in MPS’s                  service territory have been purchasing energy from suppliers other                  than                  MPS.  This energy comes from Competitive Electricity Suppliers                  (“CES”) or, if customers are unable or do not wish to choose a competitive                  supplier, the Standard Offer Service (“SOS”) provider.  SOS                  providers are determined through a bid process conducted by the                  Maine                  Public Utilities Commission (“MPUC”).  MPS provides the                  transportation through its transmission and distribution wires                  infrastructure.  Its service area covers approximately 3,600                  square miles, with a population of 72,000.  The utility is                  regulated by the Federal Energy Regulatory Commission (“FERC”) and the                  MPUC.  MPS is headquartered in Presque Isle,                  Maine. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Maine                  & New Brunswick Electrical Power Company, Ltd., is an inactive                  Canadian subsidiary of MPS, which, prior to deregulation and generation                  divestiture, owned MPS’s Canadian electric generation                  assets.  Me&NB was incorporated in 1903 under the laws of                  the Province of New Brunswick,                  Canada. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The                  Maricor Group was a facilities engineering and solutions company                  providing                  mechanical, electrical and plumbing/fire protection engineering                  consulting                  design services.  TMG operated primarily within the New England                  region of the United States through its subsidiary The Maricor                  Group New                  England, and in Canada through The Maricor Group, Canada                  Ltd.  TMG was formed in November 2003, and was headquartered in                  Presque Isle, Maine.  MAM has divested its TMG operations                  through sales of substantially all operating assets owned in Canada                  and                  closure of the New England operations as part of an overall shift                  in                  strategy described more fully in Item 7, “Management’s Discussion and                  Analysis” of MAM’s 2006 Form 10-K and updated in each of the 2007 10-Q                  filings. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | MAM                  Utility Services Group is a newly-formed wholly-owned subsidiary                  of                  MAM.  MAM USG was incorporated in the State of Maine on                  September 27, 2007.  The purpose of MAM USG is to provide                  utility-related services to clients on projects that MPS would                  not seek or                  would not be required to provide under a separate subsidiary in                  accordance                  with MPUC Rules.  This includes transmission line and substation                  design and build service for generator projects outside the MPS                  service                  territory and contract work within MPS’s territory that MPS is not                  required to provide.  MAM USG will focus on such areas as                  transmission infrastructure to support wind generation, utility                  asset                  maintenance contracts and other utility-related services.  In                  compliance with the MPUC’s Rules and its Reorganization Order in Docket                  2002-676, these services must be provided under a separate                  subsidiary.  MAM USG is in the business development stage and                  currently has no employees. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Maricor                  Properties Ltd, 50% owned by MAM, is a Canadian real estate development,                  redevelopment, and investment company.  Maricor Properties Ltd                  was organized by MAM on May 28, 2004, in Nova Scotia, Canada, and                  acquired                  Mecel on June 1, 2004.  Maricor Properties purchased a building                  in Moncton, New Brunswick, Canada, in August 2004, and Cornwallis                  Court                  Developments Ltd, a wholly-owned Canadian subsidiary, on October                  7,                  2005.  On June 30, 2006, Maricor Properties issued stock to                  Ashford, resulting in 50% ownership for both MAM and                  Ashford.  Ashford is an Atlantic Canadian real estate                  development, investment and management firm, which provides management                  services to Maricor Properties and its                  subsidiaries. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | MAM                  retained 100% “economic ownership” of Mecel as part of the sale of the                  share to Ashford.  The sale agreement allowed for MAM to                  transfer Mecel to another of MAM’s subsidiaries or for Ashford to purchase                  50% of Mecel.  In order to satisfy this requirement of the sale,                  MAM sold its shares of Mecel to TMGC on September 12,                  2007. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Energy                  Atlantic, LLC is a licensed, but currently inactive, CES of retail                  electricity, classified as discontinued operations.    |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**MAINE        & MARITIMES CORPORATION AND SUBSIDIARIES**

**Statements        of Consolidated Operations **

| *(In                  thousands of dollars except shares and per share                  amounts)*                                                                                                                                                                                                                                                                                                |   | **Three                  Months Ended****September                  30,** |      |   | **Nine                  Months Ended****September                  30,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|-----------|--------|--------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                             |   | **2007**                                                                  |      |   | **2006**                                                                 |   |   | **2007** |   |   | **2006** |   |
| **Operating                  Revenues**                                                                                                                                                                                                                                                                                                                                                          |   |                                                                      |      |   |                                                                     |   |   |   |   |   |   |   |
| Regulated                  Revenues                                                                                                                                                                                                                                                                                                                                                              |   | $                                                                         | 8,016     |   |                                                                     | $      | 8,033 |   |   | $ | 26,882 |   |   | $ | 25,499 |   |
| **Operating                  Expenses**                                                                                                                                                                                                                                                                                                                                                          |   |                                                                      |      |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operation & Maintenance                                                                                                                                                                                                                                                                                                                                           |   |                                                                      | 4,392     |   |                                                                     |   | 4,056 |   |   |   | 10,936 |   |   |   | 11,297 |   |
| Unregulated                  Operation & Maintenance (1)                                                                                                                                                                                                                                                                                                                                     |   |                                                                      | 185       |   |                                                                     |   | 1,032 |   |   |   | 1,032 |   |   |   | 1,649 |   |
| Depreciation                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                      | 697       |   |                                                                     |   | 719 |   |   |   | 2,104 |   |   |   | 2,164 |   |
| Amortization                  of Stranded Costs                                                                                                                                                                                                                                                                                                                                                  |   |                                                                      | 2,648     |   |                                                                     |   | 2,991 |   |   |   | 8,099 |   |   |   | 8,369 |   |
| Amortization                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                      | 57        |   |                                                                     |   | 63 |   |   |   | 173 |   |   |   | 92 |   |
| Taxes                  Other Than Income                                                                                                                                                                                                                                                                                                                                                         |   |                                                                      | 440       |   |                                                                     |   | 446 |   |   |   | 1,325 |   |   |   | 1,383 |   |
| (Benefit                  of) Provision for Income Taxes—Regulated                                                                                                                                                                                                                                                                                                                         |   |                                                                      | (218      | )      |                                                                     |   | (148 | ) |   |   | 1,419 |   |   |   | 645 |   |
| Benefit                  of Income Taxes—Unregulated (1)                                                                                                                                                                                                                                                                                                                                   |   |                                                                      | (111      | )      |                                                                     |   | (452 | ) |   |   | (533 | ) |   |   | (769 | ) |
| **Total                  Operating Expenses**                                                                                                                                                                                                                                                                                                                                                    |   |                                                                      | 8,090     |   |                                                                     |   | 8,707 |   |   |   | 24,555 |   |   |   | 24,830 |   |
| **Operating                  (Loss) Income**                                                                                                                                                                                                                                                                                                                                                     |   |                                                                      | (74       | )      |                                                                     |   | (674 | ) |   |   | 2,327 |   |   |   | 669 |   |
| **Other                  Income (Deductions)**                                                                                                                                                                                                                                                                                                                                                   |   |                                                                      |      |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in Income of Associated Companies                                                                                                                                                                                                                                                                                                                                        |   |                                                                      | 28        |   |                                                                     |   | 16 |   |   |   | (6 | ) |   |   | 143 |   |
| Interest                  and Dividend Income                                                                                                                                                                                                                                                                                                                                                    |   |                                                                      | 3         |   |                                                                     |   | 2 |   |   |   | 16 |   |   |   | 14 |   |
| Benefit                  of (Provision for) Income Taxes                                                                                                                                                                                                                                                                                                                                         |   |                                                                      | -         |   |                                                                     |   | 32 |   |   |   | (5 | ) |   |   | 10 |   |
| Other—Net                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                      | (13       | )      |                                                                     |   | (86 | ) |   |   | (57 | ) |   |   | (137 | ) |
| **Total                  Other Income (Deductions)**                                                                                                                                                                                                                                                                                                                                             |   |                                                                      | 18        |   |                                                                     |   | (36 | ) |   |   | (52 | ) |   |   | 30 |   |
| **(Loss)                  Income Before Interest Charges**                                                                                                                                                                                                                                                                                                                                       |   |                                                                      | (56       | )      |                                                                     |   | (710 | ) |   |   | 2,275 |   |   |   | 699 |   |
| **Interest                  Charges**                                                                                                                                                                                                                                                                                                                                                            |   |                                                                      |      |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Long-Term                  Debt and Notes Payable                                                                                                                                                                                                                                                                                                                                                |   |                                                                      | 735       |   |                                                                     |   | 749 |   |   |   | 2,218 |   |   |   | 2,184 |   |
| Less                  Stranded Costs Carrying Charge                                                                                                                                                                                                                                                                                                                                             |   |                                                                      | (429      | )      |                                                                     |   | (386 | ) |   |   | (1,327 | ) |   |   | (1,201 | ) |
| **Total                  Interest Charges**                                                                                                                                                                                                                                                                                                                                                      |   |                                                                      | 306       |   |                                                                     |   | 363 |   |   |   | 891 |   |   |   | 983 |   |
| **(Loss)                  Income from Continuing Operations**                                                                                                                                                                                                                                                                                                                                    |   |                                                                      | (362      | )      |                                                                     |   | (1,073 | ) |   |   | 1,384 |   |   |   | (284 | ) |
| **Discontinued                  Operations**                                                                                                                                                                                                                                                                                                                                                     |   |                                                                      |      |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Gain                  (Loss) on Sales of Discontinued Operations                                                                                                                                                                                                                                                                                                                                 |   |                                                                      | 208       |   |                                                                     |   | - |   |   |   | (154 | ) |   |   | - |   |
| Goodwill                  Impairment Loss                                                                                                                                                                                                                                                                                                                                                        |   |                                                                      | -         |   |                                                                     |   | (2,546 | ) |   |   | - |   |   |   | (2,546 | ) |
| Loss                  from Operations                                                                                                                                                                                                                                                                                                                                                            |   |                                                                      | (369      | )      |                                                                     |   | (865 | ) |   |   | (1,292 | ) |   |   | (1,837 | ) |
| Income                  Tax Benefit                                                                                                                                                                                                                                                                                                                                                              |   |                                                                      | 53        |   |                                                                     |   | 1,374 |   |   |   | 565 |   |   |   | 1,780 |   |
| **Loss                  from Discontinued Operations**                                                                                                                                                                                                                                                                                                                                           |   |                                                                      | (108      | )      |                                                                     |   | (2,037 | ) |   |   | (881 | ) |   |   | (2,603 | ) |
| **Net                  (Loss) Income Available for Common Stockholders**                                                                                                                                                                                                                                                                                                                         |   | $                                                                         | (470      | )      |                                                                     | $      | (3,110 | ) |   | $ | 503 |   |   | $ | (2,887 | ) |
| **Average                  Shares of Common Stock Outstanding**                                                                                                                                                                                                                                                                                                                                  |   |                                                                      | 1,677,430 |   |                                                                     |   | 1,638,027 |   |   |   | 1,667,147 |   |   |   | 1,637,627 |   |
| **Basic                  (Loss) Earnings Per Share of Common Stock From Continuing                  Operations**                                                                                                                                                                                                                                                                                 |   | $                                                                         | (0.22     | )      |                                                                     | $      | (0.66 | ) |   | $ | 0.83 |   |   | $ | (0.17 | ) |
| **Basic                  Loss Per Share of Common Stock From Discontinued                  Operations**                                                                                                                                                                                                                                                                                          |   |                                                                      | (0.06     | )      |                                                                     |   | (1.24 | ) |   |   | (0.53 | ) |   |   | (1.59 | ) |
| **Basic                  (Loss) Earnings Per Share of Common Stock From Net (Loss)                  Income**                                                                                                                                                                                                                                                                                     |   | $                                                                         | (0.28     | )      |                                                                     | $      | (1.90 | ) |   | $ | 0.30 |   |   | $ | (1.76 | ) |
| **Diluted                  (Loss) Earnings Per Share of Common Stock From Continuing                  Operations**                                                                                                                                                                                                                                                                               |   | $                                                                         | (0.22     | )      |                                                                     | $      | (0.66 | ) |   | $ | 0.83 |   |   | $ | (0.17 | ) |
| **Diluted                  Loss Per Share of Common Stock From Discontinued                  Operations**                                                                                                                                                                                                                                                                                        |   |                                                                      | (0.06     | )      |                                                                     |   | (1.24 | ) |   |   | (0.53 | ) |   |   | (1.59 | ) |
| **Diluted                  (Loss) Earnings Per Share of Common Stock From Net (Loss)                  Income**                                                                                                                                                                                                                                                                                   |   | $                                                                         | (0.28     | )      |                                                                     | $      | (1.90 | ) |   | $ | 0.30 |   |   | $ | (1.76 | ) |
| (1) Unregulated                  operation and maintenance expense and income tax benefit included                  in                  continuing operations is the activity of the holding company, including                  corporate costs directly associated with unregulated operations                  and common                  costs not allocated to the regulated utility. |   |

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**MAINE          & MARITIMES CORPORATION AND SUBSIDIARIES**

**Statements          of Consolidated Cash Flows **

| *(In                    thousands of dollars)*                                                                       |   | **Nine                    Months Ended****September                    30,** |   |
|----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
|                                                                                                                 |   | **2007**                                                                     |   |   | **2006** |   |
| **Cash                    Flow From Operating Activities**                                                           |   |                                                                         |   |   |   |   |
| Net                    Income (Loss)                                                                                 |   | $                                                                            | 503    |   |   | $ | (2,887 | ) |
| Adjustments                    to Reconcile Net Income (Loss) to Net Cash Provided by                    Operations: |   |                                                                         |   |   |   |   |   |   |
| Depreciation                                                                                                         |   |                                                                         | 2,104  |   |   |   | 2,164 |   |
| Amortization                    of Intangibles                                                                       |   |                                                                         | 173    |   |   |   | 92 |   |
| Amortization                    of Seabrook                                                                          |   |                                                                         | 833    |   |   |   | 833 |   |
| Amortization                    of Cancelled Transmission Plant                                                      |   |                                                                         | 191    |   |   |   | 271 |   |
| Deferred                    Income Taxes—Net                                                                   |   |                                                                         | (502   | ) |   |   | 2,387 |   |
| Deferred                    Investment Tax Credits                                                                   |   |                                                                         | (15    | ) |   |   | (19 | ) |
| Change                    in Deferred Regulatory and Debt Issuance Costs                                             |   |                                                                         | 3,781  |   |   |   | (3,621 | ) |
| Amortization                    of W/S Upfront Payment                                                               |   |                                                                         | -      |   |   |   | 1,088 |   |
| Change                    in Benefit Obligations                                                                     |   |                                                                         | (1,115 | ) |   |   | 261 |   |
| Gain                    from Sale of Stock in Subsidiary                                                             |   |                                                                         | -      |   |   |   | (429 | ) |
| Change                    in Current Assets and Liabilities:                                                         |   |                                                                         |   |   |   |   |   |   |
| Accounts                    Receivable and Unbilled Revenue                                                          |   |                                                                         | 586    |   |   |   | 1,310 |   |
| Other                    Current Assets                                                                              |   |                                                                         | (255   | ) |   |   | (120 | ) |
| Accounts                    Payable                                                                                  |   |                                                                         | (985   | ) |   |   | 581 |   |
| Other                    Current Liabilities                                                                         |   |                                                                         | 296    |   |   |   | (162 | ) |
| Other—Net                                                                                                      |   |                                                                         | 1,020  |   |   |   | (371 | ) |
| Adjustments                    to Operating Cash Flows from Continuing Operations                                    |   |                                                                         | 6,615  |   |   |   | 1,378 |   |
| Operating                    Cash Flows from Discontinued Operations                                                 |   |                                                                         | 42     |   |   |   | 383 |   |
| **Net                    Cash Flow Provided By Operating Activities**                                                |   |                                                                         | 6,657  |   |   |   | 1,761 |   |
| **Cash                    Flow From Financing Activities**                                                           |   |                                                                         |   |   |   |   |   |   |
| Retirements                    of Long-Term Debt                                                                     |   |                                                                         | (1,154 | ) |   |   | (1,340 | ) |
| Retirements                    of Long-Term Debt of Discontinued Operations                                          |   |                                                                         | (1,750 | ) |   |   | - |   |
| Additions                    of Long-Term Debt                                                                       |   |                                                                         | 3,499  |   |   |   | - |   |
| Payments                    of Capital Lease Obligations                                                             |   |                                                                         | (62    | ) |   |   | - |   |
| Short-Term                    Debt (Repayments) Borrowings, Net                                                      |   |                                                                         | (3,970 | ) |   |   | 1,640 |   |
| Short-Term                    Debt Repayments of Discontinued Operations                                             |   |                                                                         | (1,000 | ) |   |   | - |   |
| **Net                    Cash Flow (Used For) Provided by Financing                    Activities**                  |   |                                                                         | (4,437 | ) |   |   | 300 |   |
| **Cash                    Flow From Investing Activities**                                                           |   |                                                                         |   |   |   |   |   |   |
| Cash                    Paid for Stock Contingencies from Acquisition Agreements                                     |   |                                                                         | (413   | ) |   |   | (244 | ) |
| Gain                    from Sale of Stock of Subsidiary                                                             |   |                                                                         | -      |   |   |   | 429 |   |
| Cash                    Received from Sale of Discontinued Operations                                                |   |                                                                         | 1,821  |   |   |   | - |   |
| Change                    in Restricted Investments                                                                  |   |                                                                         | (6     | ) |   |   | (5 | ) |
| Investment                    in Fixed Assets                                                                        |   |                                                                         | (4,621 | ) |   |   | (2,483 | ) |
| Stock                    Redemption from Associated Company                                                          |   |                                                                         | 500    |   |   |   | 600 |   |
| Investing                    Activities of Discontinued Operations                                                   |   |                                                                         | -      |   |   |   | (254 | ) |
| **Net                    Cash Flow Used For Investing Activities**                                                   |   |                                                                         | (2,719 | ) |   |   | (1,957 | ) |
| **(Decrease)                    Increase in Cash and Cash Equivalents**                                              |   |                                                                         | (499   | ) |   |   | 104 |   |
| **Cash                    and Cash Equivalents at Beginning of Period**                                              |   |                                                                         | 898    |   |   |   | 273 |   |
| **Cash                    and Cash Equivalents at End of Period**                                                    |   | $                                                                            | 399    |   |   | $ | 377 |   |
| **Supplemental                    Disclosure of Cash Flow Information:**                                             |   |                                                                         |   |   |   |   |   |   |
| **Cash                    Paid During the Period for:**                                                              |   |                                                                         |   |   |   |   |   |   |
| Interest                                                                                                             |   | $                                                                            | 2,459  |   |   | $ | 2,294 |   |
| Income                    Taxes                                                                                      |   | $                                                                            | 153    |   |   | $ | 53 |   |
| **Non-Cash                    Activities:**                                                                          |   |                                                                         |   |   |   |   |   |   |
| Fair                    Market Value of Stock Issued to Directors                                                    |   | $                                                                            | 19     |   |   | $ | 19 |   |
| Fixed                    Assets Acquired by Capital Lease                                                            |   | $                                                                            | 500    |   |   | $ | 57 |   |

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**MAINE          & MARITIMES CORPORATION AND SUBSIDIARIES**

**Consolidated          Balance Sheets**

| *(In                    thousands of dollars)*                                                                                                            |   | **September                    30,** |    |   | **December                    31,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|--------|-------------------------------------|--------|
|                                                                                                                                                      |   | **2007**                             |    |   | **2006**                            |   |
| **ASSETS**                                                                                                                                                |   | (Unaudited)                          |    |   | (Audited)                           |   |
| **Plant**                                                                                                                                                 |   |                                 |    |   |                                |   |
| Electric                    Plant in Service                                                                                                              |   | $                                    | 102,531 |   |                                | $      | 101,085 |   |
| Non-Utility                    Plant                                                                                                                      |   |                                 | 3       |   |                                |   | 3 |   |
| Less                    Accumulated Depreciation                                                                                                          |   |                                 | (43,826 | )      |                                |   | (41,948 | ) |
| Net                    Plant in Service                                                                                                                   |   |                                 | 58,708  |   |                                |   | 59,140 |   |
| Construction                    Work-in-Progress                                                                                                          |   |                                 | 3,491   |   |                                |   | 499 |   |
| **Total                    Plant Assets**                                                                                                                 |   |                                 | 62,199  |   |                                |   | 59,639 |   |
| **Investments                    in Associated Companies**                                                                                                |   |                                 | 1,155   |   |                                |   | 1,500 |   |
| **Net                    Plant and Investments in Associated Companies**                                                                                  |   |                                 | 63,354  |   |                                |   | 61,139 |   |
| **Current                    Assets:**                                                                                                                    |   |                                 |    |   |                                |   |   |   |
| Cash                    and Cash Equivalents                                                                                                              |   |                                 | 399     |   |                                |   | 898 |   |
| Accounts                    Receivable (less allowance for uncollectible accounts of $127                    in 2007 and                    $114 in 2006) |   |                                 | 6,482   |   |                                |   | 6,709 |   |
| Accounts                    Receivable from Associated Companies                                                                                          |   |                                 | 377     |   |                                |   | 281 |   |
| Unbilled                    Revenue - Utility                                                                                                             |   |                                 | 695     |   |                                |   | 1,150 |   |
| Inventory                                                                                                                                                 |   |                                 | 745     |   |                                |   | 646 |   |
| Prepayments                                                                                                                                               |   |                                 | 429     |   |                                |   | 273 |   |
| Current                    Assets of Discontinued Operations                                                                                              |   |                                 | 3,709   |   |                                |   | 8,658 |   |
| **Total                    Current Assets**                                                                                                               |   |                                 | 12,836  |   |                                |   | 18,615 |   |
| **Regulatory                    Assets:**                                                                                                                 |   |                                 |    |   |                                |   |   |   |
| Uncollected                    Maine Yankee Decommissioning Costs                                                                                         |   |                                 | 5,503   |   |                                |   | 7,743 |   |
| Recoverable                    Seabrook Costs                                                                                                             |   |                                 | 9,726   |   |                                |   | 10,559 |   |
| Regulatory                    Assets—Deferred Income Taxes                                                                                          |   |                                 | 5,603   |   |                                |   | 5,923 |   |
| Regulatory                    Assets—Post-Retirement Medical Benefits                                                                               |   |                                 | 2,187   |   |                                |   | 2,205 |   |
| Deferred                    Fuel and Purchased Energy Costs                                                                                               |   |                                 | 31,796  |   |                                |   | 34,689 |   |
| Cancelled                    Transmission Plant                                                                                                           |   |                                 | 318     |   |                                |   | 508 |   |
| Unamortized                    Premium on Early Retirement of Debt                                                                                        |   |                                 | 945     |   |                                |   | 1,100 |   |
| Deferred                    Regulatory Costs                                                                                                              |   |                                 | 1,039   |   |                                |   | 1,677 |   |
| **Total                    Regulatory Assets**                                                                                                            |   |                                 | 57,117  |   |                                |   | 64,404 |   |
| **Other                    Assets**                                                                                                                       |   |                                 |    |   |                                |   |   |   |
| Unamortized                    Debt Issuance Costs                                                                                                        |   |                                 | 342     |   |                                |   | 502 |   |
| Restricted                    Investments (at cost, which approximates market)                                                                            |   |                                 | 2,463   |   |                                |   | 2,458 |   |
| Other                    Assets                                                                                                                           |   |                                 | 1,413   |   |                                |   | 1,049 |   |
| **Total                    Other Assets**                                                                                                                 |   |                                 | 4,218   |   |                                |   | 4,009 |   |
| **Total                    Assets**                                                                                                                       |   | $                                    | 137,525 |   |                                | $      | 148,167 |   |

----

**MAINE          & MARITIMES CORPORATION AND SUBSIDIARIES**

**Capitalization          and Liabilities**

| *(In                    thousands of dollars)*                                     |   | **September                    30,** |    |   | **December                    31,** |   |
|------------------------------------------------------------------------------------|--------|--------------------------------------|---------|--------|-------------------------------------|--------|
|                                                                               |   | **2007**                             |    |   | **2006**                            |   |
| **Capitalization                    (see accompanying statement):**                |   | (Unaudited)                          |    |   | (Audited)                           |   |
| Shareholders’                    Equity                                      |   | $                                    | 42,029  |   |                                | $      | 41,527 |   |
| Long-Term                    Debt                                                  |   |                                 | 27,067  |   |                                |   | 27,840 |   |
| Long-Term                    Debt of Discontinued Operations                       |   |                                 | 1,164   |   |                                |   | 2,182 |   |
|                                                                               |   |                                 |    |   |                                |   |   |   |
| **Total                    Capitalization**                                        |   |                                 | 70,260  |   |                                |   | 71,549 |   |
|                                                                               |   |                                 |    |   |                                |   |   |   |
| **Current                    Liabilities:**                                        |   |                                 |    |   |                                |   |   |   |
| Long-Term                    Debt Due Within One Year                              |   |                                 | 4,785   |   |                                |   | 2,685 |   |
| Notes                    Payable to Banks                                          |   |                                 | 7,000   |   |                                |   | 11,970 |   |
| Accounts                    Payable                                                |   |                                 | 4,231   |   |                                |   | 5,018 |   |
| Accounts                    Payable—Associated Companies                     |   |                                 | 248     |   |                                |   | 247 |   |
| Accrued                    Employee Benefits                                       |   |                                 | 1,224   |   |                                |   | 1,424 |   |
| Customer                    Deposits                                               |   |                                 | 97      |   |                                |   | 149 |   |
| Taxes                    Accrued                                                   |   |                                 | 404     |   |                                |   | 7 |   |
| Interest                    Accrued                                                |   |                                 | 228     |   |                                |   | 246 |   |
| Other                    Current Liabilities                                       |   |                                 | -       |   |                                |   | 30 |   |
| Current                    Liabilities of Discontinued Operations                  |   |                                 | 821     |   |                                |   | 3,195 |   |
|                                                                               |   |                                 |    |   |                                |   |   |   |
| **Total                    Current Liabilities**                                   |   |                                 | 19,038  |   |                                |   | 24,971 |   |
|                                                                               |   |                                 |    |   |                                |   |   |   |
| **Deferred                    Credits and Other Liabilities:**                     |   |                                 |    |   |                                |   |   |   |
| Accrued                    Removal Obligations                                     |   |                                 | 5,508   |   |                                |   | 5,572 |   |
| Carrying                    Value of Interest Rate Hedge                           |   |                                 | 1,533   |   |                                |   | 1,636 |   |
| Uncollected                    Maine Yankee Decommissioning Costs                  |   |                                 | 5,503   |   |                                |   | 7,743 |   |
| Other                    Regulatory Liabilities                                    |   |                                 | 316     |   |                                |   | 382 |   |
| Deferred                    Income Taxes                                           |   |                                 | 24,804  |   |                                |   | 26,360 |   |
| Accrued                    Postretirement Benefits and Pension Costs               |   |                                 | 7,497   |   |                                |   | 8,631 |   |
| Investment                    Tax Credits                                          |   |                                 | 67      |   |                                |   | 81 |   |
| Miscellaneous                                                                      |   |                                 | 2,999   |   |                                |   | 1,242 |   |
| **Total                    Deferred Credits and Other Liabilities**                |   |                                 | 48,227  |   |                                |   | 51,647 |   |
|                                                                               |   |                                 |    |   |                                |   |   |   |
| **Commitments,                    Contingencies, and Regulatory Matters (Note 8)** |   |                                 |    |   |                                |   |   |   |
|                                                                               |   |                                 |    |   |                                |   |   |   |
| **Total                    Capitalization and Liabilities**                        |   | $                                    | 137,525 |   |                                | $      | 148,167 |   |

----

**MAINE        & MARITIMES CORPORATION AND SUBSIDIARIES**

**Statement        of Consolidated Shareholders’ Equity **

| *(In                    thousands of dollars, except share information)*                                                                     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   | **Shares                    Issued and Outstanding** |   |   | **Common** |   |   | **Preferred** |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   | **Common** |   |   | **Preferred** |   |   | **Par                    Value Issued ($7/Share)** |   |   | **Paid-In                    Capital** |   |   | **Par                    Value Issued ($0.01/ Share)** |   |   | **Paid-In                    Capital** |   |   | **Retained                    Earnings** |   |   | **Accumulated                    Other Compre-hensive Income (Loss)** |   |   | **Total** |   |
| **Balance,****December                    31, 2006**                                                                                         |   |   | 1,638,379 |   |   |   | 9,500 |   |   | $ | 11,469 |   |   | $ | 1,254 |   |   | $ | — |   |   | $ | 950 |   |   | $ | 28,266 |   |   | $ | (412 | ) |   | $ | 41,527 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                    Stock  Issued                                                                                                 |   |   | 973 |   |   |   |   |   |   |   | 7 |   |   |   | 12 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 19 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                    of Preferred Shares                                                                                            |   |   | 38,078 |   |   |   | (9,500 | ) |   |   | 267 |   |   |   | 683 |   |   |   | - |   |   |   | (950 | ) |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock                    Contingency from Acquisitions                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (413 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (413 | ) |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    Income                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 503 |   |   |   |   |   |   |   | 503 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                    Comprehensive Income (Loss):                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes                    in Value of Foreign Exchange Translation Loss, Net of Tax Provision                    of                    $197 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 296 |   |   |   | 296 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                    Loss on Investments Available for Sale, Net of Tax Benefit of                    $4                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (6 | ) |   |   | (6 | ) |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change                    in Fair Value of Interest Rate Hedge, Net of Tax Provision of                    $69                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 103 |   |   |   | 103 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    Other Comprehensive Income                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 393 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    Comprehensive Income                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 896 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance,****September                    30, 2007**                                                                                        |   |   | 1,677,430 |   |   |   | - |   |   | $ | 11,743 |   |   | $ | 1,536 |   |   | $ | - |   |   | $ | - |   |   | $ | 28,769 |   |   | $ | (19 | ) |   | $ | 42,029 |   |

----

**NOTES        TO CONSOLIDATED**

**FINANCIAL        STATEMENTS**

**1.    ACCOUNTING        POLICIES**

**Consolidation        and Basis of Presentation**

| 1. | Maine                  Public Service Company                  (“MPS”) and its wholly-owned inactive Canadian subsidiary Maine &                  New Brunswick Electrical Power Company, Ltd                  (“Me&NB”); |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Energy                  Atlantic, LLC (“EA”), an                  inactive subsidiary; |
|----|----------------------------------------------------------------------------------------------------|

| 3. | The                  Maricor Group (“TMG”) and its                  wholly-owned United States subsidiary The Maricor Group New England                  (“TMGNE”) and TMG’s wholly-owned Canadian subsidiary The Maricor Group,                  Canada Ltd (“TMGC”), all of which are classified as discontinued                  operations.  As described later in this document, the operations                  of TMGNE ceased August 31, 2007.  Substantially all of the                  assets of TMGC were sold in June 2007.  In September 2007, TMGC                  purchased the shares of Mecel Properties from Maricor                  Properties. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | MAM                  Utility Services Group (“MAM                  USG”), a wholly-owned United States subsidiary, incorporated on September                  27, 2007.  MAM USG will provide utility-related services to                  external clients under the strategy announced in the 2006 Form                  10-K. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Accounting        Policies**

**Reclassifications**

----

**2.    INCOME        TAXES**

| *(In                  thousands of dollars)*                     |   | **For                  the Quarter Ended September 30,** |   |   | **For                  the Nine Months Ended September 30,** |   |
|------------------------------------------------------------------|--------|----------------------------------------------------------|--------|--------|--------------------------------------------------------------|--------|
|                                                             |   | **2007**                                                 |   |   | **2006**                                                     |   |   | **2007** |   |   | **2006** |   |
| Current                  income taxes                            |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |
| Federal                                                          |   | $                                                        | -      |   |                                                         | $      | (896 | ) |   | $ | - |   |   | $ | (941 | ) |
| State                                                            |   |                                                     | -      |   |                                                         |   | (248 | ) |   |   | - |   |   |   | (292 | ) |
| Foreign                                                          |   |                                                     | 5      |   |                                                         |   | 29 |   |   |   | 13 |   |   |   | 71 |   |
|                                                             |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  current income taxes provision (benefit)  |   |                                                     | 5      |   |                                                         |   | (1,115 | ) |   |   | 13 |   |   |   | (1,162 | ) |
|                                                             |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Deferred                  income taxes                           |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Federal                                                          |   |                                                     | (88    | )      |                                                         |   | (744 | ) |   |   | 279 |   |   |   | (618 | ) |
| State                                                            |   |                                                     | (294   | )      |                                                         |   | (141 | ) |   |   | 49 |   |   |   | (116 | ) |
|                                                             |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  deferred income taxes provision (benefit) |   |                                                     | (382   | )      |                                                         |   | (885 | ) |   |   | 328 |   |   |   | (734 | ) |
|                                                             |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Investment                  credits, net                         |   |                                                     | (5     | )      |                                                         |   | (6 | ) |   |   | (15 | ) |   |   | (18 | ) |
| Total                  income taxes provision (benefit)          |   | $                                                        | (382   | )      |                                                         | $      | (2,006 | ) |   | $ | 326 |   |   | $ | (1,914 | ) |
|                                                             |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  income taxes allocated to:                |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  income                                |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| -  Regulated                                           |   | $                                                        | (218   | )      |                                                         | $      | (148 | ) |   | $ | 1,419 |   |   | $ | 645 |   |
| -  Unregulated                                         |   |                                                     | (111   | )      |                                                         |   | (452 | ) |   |   | (533 | ) |   |   | (769 | ) |
|                                                             |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal                                                         |   |                                                     | (329   | )      |                                                         |   | (600 | ) |   |   | 886 |   |   |   | (124 | ) |
| Discontinued                  operations                         |   |                                                     | (53    | )      |                                                         |   | (1,374 | ) |   |   | (565 | ) |   |   | (1,780 | ) |
|                                                             |   |                                                     |   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  operating income                          |   |                                                     | (382   | )      |                                                         |   | (1,974 | ) |   |   | 321 |   |   |   | (1,904 | ) |
| Other                  income                                    |   |                                                     | -      |   |                                                         |   | (32 | ) |   |   | 5 |   |   |   | (10 | ) |
| Total                  income taxes provision (benefit)          |   | $                                                        | (382   | )      |                                                         | $      | (2,006 | ) |   | $ | 326 |   |   | $ | (1,914 | ) |

*Accounting for Uncertainty in Income Taxes,        an Interpretation of FASB Statement 109.”  *

----

| *(In                  thousands of dollars)*                                                               |   |                                    |   |   |                                   |   |
|------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------|----------------------------------------|--------|
|                                                                                                       |   | **September                  30, 2007** |   |   | **December                  31, 2006** |   |
| Seabrook                                                                                                   |   | $                                       | 5,277  |   |                                   | $      | 5,737 |   |
| Property                                                                                                   |   |                                    | 9,653  |   |                                   |   | 9,526 |   |
| Flexible                  pricing revenue                                                                  |   |                                    | 452    |   |                                   |   | 596 |   |
| Deferred                  fuel                                                                             |   |                                    | 12,685 |   |                                   |   | 13,839 |   |
| Pension                  and post-retirement benefits                                                      |   |                                    | (1,882 | )      |                                   |   | (1,992 | ) |
| Net                  Operating Loss Carryforwards of Continuing Operations                                 |   |                                    | -      |   |                                   |   | (1,055 | ) |
| Other                  Comprehensive Income                                                                |   |                                    | (561   | )      |                                   |   | (602 | ) |
| Other                                                                                                      |   |                                    | (820   | )      |                                   |   | 311 |   |
|                                                                                                       |   |                                    |   |   |                                   |   |   |   |
| Net                  Accumulated Deferred Income Tax Liability from Continuing                  Operations |   | $                                       | 24,804 |   |                                   | $      | 26,360 |   |
|                                                                                                       |   |                                    |   |   |                                   |   |   |   |
| Goodwill                  Impairment Loss                                                                  |   |                                    | (1,018 | )      |                                   |   | (1,018 | ) |
| Estimated                  Loss on Sale of Discontinued Operations                                         |   |                                    | (1,816 | )      |                                   |   | (2,485 | ) |
| Net                  Operating Loss Carryforwards of Discontinued Operations                               |   |                                    | (722   | )      |                                   |   | (1,204 | ) |
| Amortization                  of Goodwill                                                                  |   |                                    | 375    |   |                                   |   | 375 |   |
| Other                  Comprehensive Income                                                                |   |                                    | 506    |   |                                   |   | 287 |   |
| Other                                                                                                      |   |                                    | (68    | )      |                                   |   | (14 | ) |
|                                                                                                       |   |                                    |   |   |                                   |   |   |   |
| Net                  Accumulated Deferred Income Tax Asset from Discontinued                  Operations   |   | $                                       | (2,743 | )      |                                   | $      | (4,059 | ) |
| Net                  Accumulated Deferred Income Tax Liability                                             |   | $                                       | 22,061 |   |                                   | $      | 22,301 |   |

**3.    DISCONTINUED        OPERATIONS**

**The        Maricor Group**

| *(In                  thousands of dollars)*                       |   | **Quarter                  Ended September 30,** |   |   | **Nine                  Months Ended September 30,** |   |
|--------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|------------------------------------------------------|--------|
|                                                               |   | **2007**                                         |   |   | **2006**                                             |   |   | **2007** |   |   | **2006** |   |
| Loss                  From Operations:                             |   |                                             |   |   |                                                 |   |   |   |   |   |   |   |
| Operating                  Revenue                                 |   | $                                                | 82     |   |                                                 | $      | 1,465 |   |   | $ | 2,374 |   |   | $ | 4,238 |   |
| Third                  Party Expenses                              |   |                                             | (451   | )      |                                                 |   | (1,970 | ) |   |   | (3,256 | ) |   |   | (5,306 | ) |
| Loss                  from Operations                              |   |                                             | (369   | )      |                                                 |   | (505 | ) |   |   | (882 | ) |   |   | (1,068 | ) |
|                                                               |   |                                             |   |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Gain                  (Loss) from Sale of Assets                   |   |                                             | 208    |   |                                                 |   | - |   |   |   | (154 | ) |   |   | - |   |
| Goodwill                  Impairment Loss                          |   |                                             | -      |   |                                                 |   | (2,546 | ) |   |   | - |   |   |   | (2,546 | ) |
| Benefit                  of Income Taxes                           |   |                                             | 53     |   |                                                 |   | 1,234 |   |   |   | 402 |   |   |   | 1,477 |   |
| Net                  Loss — Unregulated Engineering Services |   | $                                                | (108   | )      |                                                 | $      | (1,817 | ) |   | $ | (634 | ) |   | $ | (2,137 | ) |

----

| *(In                  thousands of dollars)*                      |   |                               |   |   |                              |   |
|-------------------------------------------------------------------|--------|------------------------------------|--------|--------|-----------------------------------|--------|
|                                                              |   | **September                  30,** |   |   | **December                  31,** |   |
|                                                              |   | **2007**                           |   |   | **2006**                          |   |
| Assets:                                                           |   |                               |   |   |                              |   |
| Cash                  & Cash Equivalents                      |   | $                                  | 82     |   |                              | $      | 210 |   |
| Accounts                  Receivable, Net                         |   |                               | 169    |   |                              |   | 1,715 |   |
| Unbilled                  Contract Revenue                        |   |                               | -      |   |                              |   | 1,155 |   |
| Other                  Assets                                     |   |                               | 144    |   |                              |   | 108 |   |
| Fixed                  Assets, Net of Depreciation                |   |                               | 575    |   |                              |   | 733 |   |
| Intangible                  Assets and Goodwill                   |   |                               | -      |   |                              |   | 162 |   |
| Income                  Taxes Receivable                          |   |                               | 722    |   |                              |   | 875 |   |
| Deferred                  Tax Assets                              |   |                               | 2,017  |   |                              |   | 2,495 |   |
|   Total                  Assets                         |   | $                                  | 3,709  |   |                              | $      | 7,453 |   |
|                                                              |   |                               |   |   |                              |   |   |   |
| Shareholder's                  Deficit and Liabilities:           |   |                               |   |   |                              |   |   |   |
| Shareholder's                  Deficit                            |   | $                                  | (4,902 | )      |                              | $      | (4,115 | ) |
| Notes                  Payable to Banks                           |   |                               | -      |   |                              |   | 1,000 |   |
| Accounts                  Payable and Accrued Employee Benefits   |   |                               | 529    |   |                              |   | 1,613 |   |
| Intercompany                  Accounts Payable                    |   |                               | 2,844  |   |                              |   | 1,676 |   |
| Unearned                  Revenue                                 |   |                               | -      |   |                              |   | 139 |   |
| Current                  Portion of Long-Term Debt                |   |                               | 286    |   |                              |   | 18 |   |
| Other                  Liabilities                                |   |                               | 6      |   |                              |   | 50 |   |
| Intercompany                  Notes Payable                       |   |                               | 3,782  |   |                              |   | 4,890 |   |
| Long-Term                  Debt                                   |   |                               | 1,164  |   |                              |   | 2,182 |   |
| Total                  Liabilities                                |   |                               | 8,611  |   |                              |   | 11,568 |   |
| Total                  Shareholder's Deficit and Liabilities |   | $                                  | 3,709  |   |                              | $      | 7,453 |   |

**Maricor        Technologies, Inc.**

| *(In                  thousands of dollars)*                      |   | **Quarter                  Ended September 30,** |   |   | **Nine                  Months Ended September 30,** |   |
|-------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|------------------------------------------------------|--------|
|                                                              |   | **2007**                                         |   |   | **2006**                                             |   |   | **2007** |   |   | **2006** |   |
| Loss                  From Operations:                            |   |                                             |   |   |                                                 |   |   |   |   |   |   |   |
| Operating                  Revenue                                |   | $                                                | -      |   |                                                 | $      | 32 |   |   | $ | 135 |   |   | $ | 152 |   |
| Expenses                                                          |   |                                             | -      |   |                                                 |   | (339 | ) |   |   | (546 | ) |   |   | (905 | ) |
| Loss                  from Operations                             |   |                                             | -      |   |                                                 |   | (307 | ) |   |   | (411 | ) |   |   | (753 | ) |
| Benefit                  of Income Taxes                          |   |                                             | -      |   |                                                 |   | 131 |   |   |   | 164 |   |   |   | 304 |   |
| Net                  Loss — Unregulated Software Technology |   | $                                                | -      |   |                                                 | $      | (176 | ) |   | $ | (247 | ) |   | $ | (449 | ) |

**4.    SEGMENT        INFORMATION**

|  | · | Regulated                  electric utility:  MPS and its inactive wholly-owned Canadian                  subsidiary, Me&NB; |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | · | Unregulated                  engineering services:  TMG and all of its subsidiaries and                  product and service lines, classified as discontinued                  operations; |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Unregulated                  software technology:  MTI, classified as discontinued                  operations; |
|--|--------|---------------------------------------------------------------------------------------------------------------------------|

|  | · | Unregulated                  energy marketing:  EA, an inactive subsidiary classified as                  discontinued operations; and |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Other:  Corporate                  costs directly associated with the unregulated subsidiaries, common                  costs                  not allocated to the regulated utility, MAM USG results and inter-company                  eliminations classified as continuing                  operations. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                      |   | ***(In                  thousands of dollars)***      |   |
|-----------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                      |   | **Quarter                  Ended September 30, 2007** |   |
|                                                      |   |                                                  |   |   | **Unregulated** |   |   |   |   |
|                                                      |   | **Regulated****Electric****Utility**                  |   |   | **Engineering****Services** |   |   | **Software                  Technology** |   |   | **Energy****Marketing** |   |   | **Other** |   |   | **Total** |   |
| Revenue                  from External Customers          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operating Revenue              |   | $                                                     | 8,016  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 8,016 |   |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Expenses                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operation & Maintenance    |   |                                                  | 4,392  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,392 |   |
| Unregulated                  Operation & Maintenance  |   |                                                  | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 185 |   |   |   | 185 |   |
| Depreciation                                              |   |                                                  | 697    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 697 |   |
| Amortization                  of Stranded Costs           |   |                                                  | 2,648  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,648 |   |
| Amortization                                              |   |                                                  | 57     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 57 |   |
| Taxes                  Other than Income                  |   |                                                  | 439    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 440 |   |
| Income                  Taxes                             |   |                                                  | (218   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (111 | ) |   |   | (329 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Operating Expenses                 |   |                                                  | 8,015  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 75 |   |   |   | 8,090 |   |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Income (Loss)                  |   |                                                  | 1      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (75 | ) |   |   | (74 | ) |
| Other                  Income (Deductions)                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in Income of Associated Companies |   |                                                  | 31     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (3 | ) |   |   | 28 |   |
| Interest                  and Dividend Income             |   |                                                  | 13     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (10 | ) |   |   | 3 |   |
| Other                  Deductions                         |   |                                                  | (6     | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (7 | ) |   |   | (13 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Other Income (Deductions)          |   |                                                  | 38     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (20 | ) |   |   | 18 |   |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (Loss) Before Interest Charges    |   |                                                  | 39     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (95 | ) |   |   | (56 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Charges                         |   |                                                  | 229    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 77 |   |   |   | 306 |   |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Continuing Operations          |   |                                                  | (190   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (172 | ) |   |   | (362 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations:       |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gain                  on Sales of Discontinued Operations |   |                                                  | -      |   |   |   | 208 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 208 |   |
| Loss                  From Operations                     |   |                                                  | -      |   |   |   | (369 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (369 | ) |
| Benefit                  of Income Taxes                  |   |                                                  | -      |   |   |   | 53 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 53 |   |
| Loss                  from Discontinued Operations        |   |                                                  | -      |   |   |   | (108 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (108 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Loss                                 |   | $                                                     | (190   | ) |   | $ | (108 | ) |   | $ | - |   |   | $ | - |   |   | $ | (172 | ) |   | $ | (470 | ) |

----

|                                                      |   | ***(In                  thousands of dollars)***      |   |
|-----------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                      |   | **Quarter                  Ended September 30, 2006** |   |
|                                                      |   |                                                  |   |   | **Unregulated** |   |   |   |   |
|                                                      |   | **Regulated****Electric****Utility**                  |   |   | **Engineering****Services** |   |   | **Software                  Technology** |   |   | **Energy****Marketing** |   |   | **Other** |   |   | **Total** |   |
| Revenue                  from External Customers          |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operating Revenue              |   | $                                                     | 8,033  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 8,033 |   |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Expenses                       |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operation & Maintenance    |   |                                                  | 4,056  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,056 |   |
| Unregulated                  Operation & Maintenance  |   |                                                  | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,032 |   |   |   | 1,032 |   |
| Depreciation                                              |   |                                                  | 719    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 719 |   |
| Amortization                  of Stranded Costs           |   |                                                  | 2,991  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,991 |   |
| Amortization                                              |   |                                                  | 63     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 63 |   |
| Taxes                  Other than Income                  |   |                                                  | 441    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5 |   |   |   | 446 |   |
| Income                  Taxes                             |   |                                                  | (148   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (452 | ) |   |   | (600 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Operating Expenses                 |   |                                                  | 8,122  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 585 |   |   |   | 8,707 |   |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Loss                           |   |                                                  | (89    | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (585 | ) |   |   | (674 | ) |
| Other                  Income (Deductions)                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in Income of Associated Companies |   |                                                  | 43     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (27 | ) |   |   | 16 |   |
| Interest                  and Dividend Income             |   |                                                  | 16     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (14 | ) |   |   | 2 |   |
| Other                  (Deductions) Income                |   |                                                  | (56    | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2 |   |   |   | (54 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Other Income (Deductions)          |   |                                                  | 3      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (39 | ) |   |   | (36 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  Before Interest Charges             |   |                                                  | (86    | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (624 | ) |   |   | (710 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Charges                         |   |                                                  | 287    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 76 |   |   |   | 363 |   |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Continuing Operations          |   |                                                  | (373   | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (700 | ) |   |   | (1,073 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations:       |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                  Impairment Loss                 |   |                                                  | -      |   |   |   | (2,546 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,546 | ) |
| Loss                  From Operations                     |   |                                                  | -      |   |   |   | (505 | ) |   |   | (360 | ) |   |   | - |   |   |   | - |   |   |   | (865 | ) |
| Benefit                  of Income Taxes                  |   |                                                  | -      |   |   |   | 1,234 |   |   |   | 140 |   |   |   | - |   |   |   | - |   |   |   | 1,374 |   |
| Loss                  from Discontinued Operations        |   |                                                  | -      |   |   |   | (1,817 | ) |   |   | (220 | ) |   |   | - |   |   |   | - |   |   |   | (2,037 | ) |
|                                                      |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Loss                                 |   | $                                                     | (373   | ) |   | $ | (1,817 | ) |   | $ | (220 | ) |   | $ | - |   |   | $ | (700 | ) |   | $ | (3,110 | ) |

----

|                                                      |   | ***(In                  thousands of dollars)***          |    |
|-----------------------------------------------------------|--------|-----------------------------------------------------------|---------|
|                                                      |   | **Nine                  Months Ended September 30, 2007** |    |
|                                                      |   |                                                      |    |   | **Unregulated** |   |   |   |   |
|                                                      |   | **Regulated****Electric****Utility**                      |    |   | **Engineering****Services** |   |   | **Software                  Technology** |   |   | **Energy****Marketing** |   |   | **Other** |   |   | **Total** |   |
| Revenue                  from External Customers          |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operating Revenue              |   | $                                                         | 26,882  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 26,882 |   |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Expenses                       |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operation & Maintenance    |   |                                                      | 10,936  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 10,936 |   |
| Unregulated                  Operation & Maintenance  |   |                                                      | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,032 |   |   |   | 1,032 |   |
| Depreciation                                              |   |                                                      | 2,104   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,104 |   |
| Amortization                  of Stranded Costs           |   |                                                      | 8,099   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8,099 |   |
| Amortization                                              |   |                                                      | 173     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 173 |   |
| Taxes                  Other than Income                  |   |                                                      | 1,320   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5 |   |   |   | 1,325 |   |
| Income                  Taxes                             |   |                                                      | 1,419   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (533 | ) |   |   | 886 |   |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Operating Expenses                 |   |                                                      | 24,051  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 504 |   |   |   | 24,555 |   |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Income (Loss)                  |   |                                                      | 2,831   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (504 | ) |   |   | 2,327 |   |
| Other                  Income (Deductions)                |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in Income of Associated Companies |   |                                                      | 33      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (39 | ) |   |   | (6 | ) |
| Interest                  and Dividend Income             |   |                                                      | 47      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (31 | ) |   |   | 16 |   |
| Other                  Deductions                         |   |                                                      | (48     | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (14 | ) |   |   | (62 | ) |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Other Income (Deductions)          |   |                                                      | 32      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (84 | ) |   |   | (52 | ) |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (Loss) Before Interest Charges    |   |                                                      | 2,863   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (588 | ) |   |   | 2,275 |   |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Charges                         |   |                                                      | 640     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 251 |   |   |   | 891 |   |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (Loss) from Continuing Operations |   |                                                      | 2,223   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (839 | ) |   |   | 1,384 |   |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations:       |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  on Sales of Discontinued Operations |   |                                                      | -       |   |   |   | (154 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (154 | ) |
| Loss                  From Operations                     |   |                                                      | -       |   |   |   | (881 | ) |   |   | (411 | ) |   |   | - |   |   |   | - |   |   |   | (1,292 | ) |
| Benefit                  of Income Taxes                  |   |                                                      | -       |   |   |   | 401 |   |   |   | 164 |   |   |   | - |   |   |   | - |   |   |   | 565 |   |
| Loss                  from Discontinued Operations        |   |                                                      | -       |   |   |   | (634 | ) |   |   | (247 | ) |   |   | - |   |   |   | - |   |   |   | (881 | ) |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income (Loss)                        |   | $                                                         | 2,223   |   |   | $ | (634 | ) |   | $ | (247 | ) |   | $ | - |   |   | $ | (839 | ) |   | $ | 503 |   |
|                                                      |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Assets                             |   | $                                                         | 133,964 |   |   | $ | 3,709 |   |   | $ | - |   |   | $ | - |   |   | $ | (148 | ) |   | $ | 137,525 |   |

----

|                                                        |   | ***(In                  thousands of dollars)***          |    |
|-------------------------------------------------------------|--------|-----------------------------------------------------------|---------|
|                                                        |   | **Nine                  Months Ended September 30, 2006** |    |
|                                                        |   |                                                      |    |   | **Unregulated** |   |   |   |   |
|                                                        |   | **Regulated****Electric****Utility**                      |    |   | **Engineering****Services** |   |   | **Software                  Technology** |   |   | **Energy****Marketing** |   |   | **Other** |   |   | **Total** |   |
| Revenue                  from External Customers            |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operating Revenue                |   | $                                                         | 25,499  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 25,499 |   |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Expenses                         |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulated                  Operation & Maintenance      |   |                                                      | 11,297  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 11,297 |   |
| Unregulated                  Operation & Maintenance    |   |                                                      | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,649 |   |   |   | 1,649 |   |
| Depreciation                                                |   |                                                      | 2,164   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,164 |   |
| Amortization                  of Stranded Costs             |   |                                                      | 8,369   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8,369 |   |
| Amortization                                                |   |                                                      | 92      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 92 |   |
| Taxes                  Other than Income                    |   |                                                      | 1,357   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 26 |   |   |   | 1,383 |   |
| Income                  Taxes                               |   |                                                      | 645     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (769 | ) |   |   | (124 | ) |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Operating Expenses                   |   |                                                      | 23,924  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 906 |   |   |   | 24,830 |   |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  Income (Loss)                    |   |                                                      | 1,575   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (906 | ) |   |   | 669 |   |
| Other                  Income (Deductions)                  |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in Income of Associated Companies   |   |                                                      | 140     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3 |   |   |   | 143 |   |
| Interest                  and Dividend Income               |   |                                                      | 36      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (22 | ) |   |   | 14 |   |
| Other                  Deductions                           |   |                                                      | (127    | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (127 | ) |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Other Income (Deductions)            |   |                                                      | 49      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (19 | ) |   |   | 30 |   |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (Loss) Before Interest Charges      |   |                                                      | 1,624   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (925 | ) |   |   | 699 |   |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Charges                           |   |                                                      | 780     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 203 |   |   |   | 983 |   |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (Loss) from Continuing Operations   |   |                                                      | 844     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,128 | ) |   |   | (284 | ) |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                  from Discontinued Operations:         |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                  Impairment Loss                   |   |                                                      | -       |   |   |   | (2,546 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,546 | ) |
| (Loss)                  Income From Operations              |   |                                                      | -       |   |   |   | (1,068 | ) |   |   | (771 | ) |   |   | 2 |   |   |   | - |   |   |   | (1,837 | ) |
| Benefit                  of (Provision for) Income Taxes    |   |                                                      | -       |   |   |   | 1,477 |   |   |   | 304 |   |   |   | (1 | ) |   |   | - |   |   |   | 1,780 |   |
| (Loss)                  Income from Discontinued Operations |   |                                                      | -       |   |   |   | (2,137 | ) |   |   | (467 | ) |   |   | 1 |   |   |   | - |   |   |   | (2,603 | ) |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income (Loss)                          |   | $                                                         | 844     |   |   | $ | (2,137 | ) |   | $ | (467 | ) |   | $ | 1 |   |   | $ | (1,128 | ) |   | $ | (2,887 | ) |
|                                                        |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Assets                               |   | $                                                         | 135,567 |   |   | $ | 10,628 |   |   | $ | 2,018 |   |   | $ | - |   |   | $ | (54 | ) |   | $ | 148,159 |   |

**5.    INVESTMENTS        IN ASSOCIATED COMPANIES**

**Maricor        Properties Ltd**

*Consolidation        of Variable Interest Entities, an Interpretation of ARB 51*

----

| *(in                  thousands of dollars)*      |   |   |   |
|---------------------------------------------------|--------|--------|--------|
|                                              |   |   |   |
| Total                  Assets                     |   | $      | 9,151  |   |
| Less:                                             |   |   |   |   |
| Long-term                  Debt                   |   |   | 6,155  |   |
| Short-term                  Debt                  |   |   | 2,165  |   |
| Other                  Liabilities                |   |   | 631    |   |
| Net                  Assets                       |   | $      | 200    |   |
|                                              |   |   |   |   |
| MAM’s                  Equity in Net Assets |   | $      | 100    |   |

**Maricor        Ashford Ltd**

**Maine        Yankee and MEPCO**

| *(In                  thousands of dollars)*        |   | **Quarter                  Ending September 30,** |   |   | **Nine                  Months Ending September 30,** |   |
|-----------------------------------------------------|--------|---------------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|                                                |   | **2007**                                          |   |   | **2006**                                              |   |   | **2007** |   |   | **2006** |   |
| **Maine                  Yankee**                   |   |                                              |   |   |                                                  |   |   |   |   |   |   |   |
| Dividends                  Declared                 |   | $                                                 | 20     |   |                                                  | $      | 60 |   |   | $ | 40 |   |   | $ | 60 |   |
| Dividends                  Received in Cash         |   |                                              | -      |   |                                                  |   | - |   |   |   | 20 |   |   |   | 41 |   |
| Stock                  Redemptions Declared         |   |                                              | -      |   |                                                  |   | - |   |   |   | 250 |   |   |   | 600 |   |
| Stock                  Redemptions Received in Cash |   |                                              | 250    |   |                                                  |   | 400 |   |   |   | 500 |   |   |   | 600 |   |
|                                                |   |                                              |   |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| **MEPCO**                                           |   |                                              |   |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                  Declared                 |   | $                                                 | 2      |   |                                                  | $      | 2 |   |   | $ | 6 |   |   | $ | 6 |   |
| Dividends                  Received in Cash         |   |                                              | 2      |   |                                                  |   | 2 |   |   |   | 6 |   |   |   | 173 |   |

**6.    STOCK        COMPENSATION PLAN**

----

*“Accounting for Stock-Based Compensation.”*

| Year                  of Issuance                         | 2003                     | 2002                     |
|-----------------------------------------------------------|--------------------------|--------------------------|
| Number                  of Options Granted                | 1,966                    | 1,966                    |
| Vesting                  Period                           | 3                  years | 3                  years |
| Number                  of Options Vested and Exercisable | 1,966                    | 1,966                    |
| Dividend                  Yield                           | 4.60%                    | 4.70%                    |
| Volatility                                                | 20.00%                   | 20.00%                   |
| Risk-Free                  Interest Rate                  | 3.00%                    | 4.60%                    |
| Expected                  Life                            | 7                  years | 7                  years |

|                                                            |   | **Shares** |   |   | **Average                  Exercise Price** |   |
|-----------------------------------------------------------------|--------|------------|--------|--------|---------------------------------------------|--------|
|                                                            |   | **2007**   |   |   | **2007**                                    |   |
|                                                            |   |       |   |   |                                        |   |
| Outstanding                  at December 31, 2006               |   |       | 3,932  |   |                                        | $      | 30.28 |   |
| Granted                                                         |   |       | -      |   |                                        |   | - |   |
| Exercised                                                       |   |       | -      |   |                                        |   | - |   |
| Expired                                                         |   |       | -      |   |                                        |   | - |   |
| Forfeited                                                       |   |       | -      |   |                                        |   | - |   |
|                                                            |   |       |   |   |                                        |   |   |   |
| Outstanding                  at September 30, 2007              |   |       | 3,932  |   |                                        | $      | 30.28 |   |
|                                                            |   |       |   |   |                                        |   |   |   |
| Options                  exercisable at September 30, 2007      |   |       | 3,932  |   |                                        | $      | 30.28 |   |
| Weighted-average                  fair value of options granted |   | $          | 4.17   |   |                                        |   |   |   |

|                                             |   | **Options                  Outstanding**     |   | **Options                  Exercisable**                       |
|--------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------------------------|
|                                             |   |                                         |   |                                                           |
| **Range                  of Exercise****Prices** |   | **Number****Outstanding at****9/30/07** |   | **Weighted-****Average****Remaining****Contractual Life** |   | **Weighted-****Average****Exercise Price** |   | **Number****Exercisable at****9/30/07** |   | **Weighted-****Average****Exercise Price** |
|                                             |   |                                         |   |                                                           |   |   |   |   |   |   |
| $30.10 - $30.45                        |   | 3,932                                        |   | 5.17                  yrs                                 |   | $30.28 |   | 3,932 |   | $30.28 |

|                                                                                                                    |   | **Quarter                  Ended September 30,** |      |   | **Nine                  Months Ended September 30,** |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|-----------|--------|-----------------------------------------------------------|--------|
|                                                                                                                    |   | **2007**                                              |      |   | **2006**                                                  |   |   | **2007** |   |   | **2006** |   |
| Net                  (Loss) Income (in thousands)                                                                       |   | $                                                     | (470      | )      |                                                      | $      | (3,110 | ) |   | $ | 503 |   |   | $ | (2,887 | ) |
| Shares                  Used in Computation of Earnings                                                                 |   |                                                  |      |   |                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-Average                  Common Shares Outstanding in Computation of Basic Earnings per                  Share |   |                                                  | 1,677,430 |   |                                                      |   | 1,638,027 |   |   |   | 1,667,147 |   |   |   | 1,637,627 |   |
| Dilutive                  Effect of Common Stock Options                                                                |   |                                                  | -         |   |                                                      |   | - |   |   |   | - |   |   |   | - |   |
| Dilutive                  Effect of Preferred Shares                                                                    |   |                                                  | -         |   |                                                      |   | - |   |   |   | - |   |   |   | - |   |
| Shares                  Used in Computation of Earnings per Common Share Assuming                  Dilution             |   |                                                  | 1,677,430 |   |                                                      |   | 1,638,027 |   |   |   | 1,667,147 |   |   |   | 1,637,627 |   |
|                                                                                                                    |   |                                                  |      |   |                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Net                  (Loss) Income per Share (Basic)                                                                    |   | $                                                     | (0.28     | )      |                                                      | $      | (1.90 | ) |   | $ | 0.30 |   |   | $ | (1.76 | ) |
| Net                  (Loss) Income per Share (Diluted)                                                                  |   | $                                                     | (0.28     | )      |                                                      | $      | (1.90 | ) |   | $ | 0.30 |   |   | $ | (1.76 | ) |

----

|                                         | **Quarter                  Ended September 30,** | **Nine                  Months Ended September 30,** |
|----------------------------------------------|-------------------------------------------------------|-----------------------------------------------------------|
|                                         | **2007**                                              |                                                      | **2006** |   | **2007** |   | **2006** |
| Common                  Stock Options        | -                                                     |                                                      | 25 |   |                         - |   |                   - |
| Preferred                  Shares            | -                                                     |                                                      | 9,500 |   |                         - |   |                     9,500 |
| Potentially                  Dilutive Shares | -                                                     |                                                      | 9,525 |   |                         - |   |                   9,500 |

**7.    BENEFIT        PROGRAMS**

**U.        S. Defined Benefit Pension Plan**

| *(In                  thousands of dollars)*        |   | **Pension                  Benefits**                 |   |
|-----------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                |   | **Quarter                  Ended September 30,** |   |   | **Nine                  Months Ended September 30,** |   |
|                                                |   | **2007**                                              |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
| Service                  cost                       |   | $                                                     | -      |   |   | $ | 140 |   |   | $ | - |   |   | $ | 421 |   |
| Interest                  cost                      |   |                                                  | 265    |   |   |   | 290 |   |   |   | 795 |   |   |   | 870 |   |
| Expected                  return on plan assets     |   |                                                  | (290   | ) |   |   | (271 | ) |   |   | (870 | ) |   |   | (814 | ) |
| Amortization                  of prior service cost |   |                                                  | -      |   |   |   | 23 |   |   |   | - |   |   |   | 68 |   |
| Recognized                  net actuarial (gain)    |   |                                                  | 16     |   |   |   | 43 |   |   |   | 48 |   |   |   | 130 |   |
|                                                |   |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  periodic benefit cost          |   | $                                                     | (9     | ) |   | $ | 225 |   |   | $ | (27 | ) |   | $ | 675 |   |

**Health        Care Benefits**

----

| *(In                  thousands of dollars)*           |   | **Health                  Care Benefits**                |   |
|--------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                   |   | **Quarter                  Ended****September 30,** |   |   | **Nine                  Months Ended****September 30,** |   |
|                                                   |   | **2007**                                                 |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
| Service                  cost                          |   | $                                                        | 45     |   |   | $ | 45 |   |   | $ | 135 |   |   | $ | 136 |   |
| Interest                  cost                         |   |                                                     | 124    |   |   |   | 126 |   |   |   | 372 |   |   |   | 378 |   |
| Expected                  return on plan assets        |   |                                                     | (53    | ) |   |   | (54 | ) |   |   | (159 | ) |   |   | (161 | ) |
| Amortization                  of transition obligation |   |                                                     | 18     |   |   |   | 36 |   |   |   | 54 |   |   |   | 107 |   |
| Amortization                  of prior service cost    |   |                                                     | (15    | ) |   |   | (15 | ) |   |   | (45 | ) |   |   | (45 | ) |
| Recognized                  net actuarial (gain)       |   |                                                     | 45     |   |   |   | 42 |   |   |   | 135 |   |   |   | 127 |   |
|                                                   |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  periodic benefit cost             |   | $                                                        | 164    |   |   | $ | 180 |   |   | $ | 492 |   |   | $ | 542 |   |

**8.    COMMITMENTS,        CONTINGENCIES AND REGULATORY MATTERS**

**Legal        Proceedings**

**Surplec,        Inc.**

**Regulatory        Matters**

**Notice        of Inquiry Regarding Allowance of Electric Utilities in Maine to Reenter        Energy        Supply Business**

**Federal        Energy Regulatory Commission 2007 Open Access Transmission Tariff Formula        Rate        Filing**

----

**Stakeholder        Initiative Regarding the Competitiveness and Reliability of the Northern        Maine        Power Grid**

**Wheelabrator-Sherman**

**Poly        Chlorinated Bi-Phenol Transformers**

**Off-Balance        Sheet Arrangements**

*Consolidation of Variable        Interest Entities,”*

----

|                                         |   | **Nine                  Months Ended September 30,** |   |
|----------------------------------------------|--------|-----------------------------------------------------------|--------|
| *(In                  thousands of dollars)* |   | **2007**                                                  |   |   | **2006** |   |
| Equipment                                    |   | $                                                         | 33     |   |   | $ | 15 |   |
| Building                                     |   |                                                      | 160    |   |   |   | 140 |   |
| Vehicles                                     |   |                                                      | 28     |   |   |   | 17 |   |
| Rights                  of Way               |   |                                                      | 41     |   |   |   | 1 |   |
| Field                  Equipment             |   |                                                      | 8      |   |   |   | 21 |   |
| Total                                        |   | $                                                         | 270    |   |   | $ | 194 |   |

**Future        Minimum Lease Payments by Year for All Items**

| **Years** | ** Minimum                  Lease Payments** |
|-----------|---------------------------------------------------|
| 2007      |  $                                           | 46 |
| 2008      |  $                                           | 221 |
| 2009      |  $                                           | 185 |
| 2010      |  $                                           | 107 |
| 2011      |  $                                           | 37 |

**Financial        Information System Hosting Agreement**

**9.    CAPITAL        LEASES**

| **Years**  | ** Minimum                  Lease Payments** |
|------------|---------------------------------------------------|
| 2007       |  $                                           | 18 |
| 2008       |  $                                           | 182 |
| 2009       |  $                                           | 184 |
| 2010       |  $                                           | 165 |
| 2011       |  $                                           | 103 |
| Thereafter |  $                                           | 57 |

**10.     DIVESTITURE        OF UNREGULATED OPERATIONS**

**Termination        of TMGNE Operations**

----

**PART        1. FINANCIAL INFORMATION**

***Item        2. Management’s Discussion and Analysis of Financial Condition and Results of        Operations***

**Forward-Looking        Statements**

**Accounting        Policies**

***Executive        Overview***

----

***Overall        Results of Operations—Consolidated***

*Net        Income and Earnings Per Share*

|                                                                   |   | **Quarter                  Ended September 30,** |   |   | **Nine                  Months Ended September 30,** |   |
|------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------|
| *(In                  thousands of dollars, except per share amounts)* |   | **2007**                                              |   |   | **2006**                                                  |   |   | **2007** |   |   | **2006** |   |
| (Loss)                  Income from Continuing Operations              |   |                                                  |   |   |                                                      |   |   |   |   |   |   |   |
| Regulated                  Electric Utility                            |   | $                                                     | (190   | )      |                                                      | $      | (373 | ) |   | $ | 2,223 |   |   | $ | 844 |   |
| Other*                                                                 |   |                                                  | (172   | )      |                                                      |   | (700 | ) |   |   | (839 | ) |   |   | (1,128 | ) |
| Income                  from Continuing Operations                     |   |                                                  | (362   | )      |                                                      |   | (1,073 | ) |   |   | 1,384 |   |   |   | (284 | ) |
| (Loss)                  Income from Discontinued Operations            |   |                                                  |   |   |                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Unregulated                  Engineering Services                      |   |                                                  | (108   | )      |                                                      |   | (1,817 | ) |   |   | (634 | ) |   |   | (2,137 | ) |
| Unregulated                  Software Technology                       |   |                                                  | -      |   |                                                      |   | (220 | ) |   |   | (247 | ) |   |   | (467 | ) |
| Other*                                                                 |   |                                                  | -      |   |                                                      |   | - |   |   |   | - |   |   |   | 1 |   |
| Loss                  from Discontinued Operations                     |   |                                                  | (108   | )      |                                                      |   | (2,037 | ) |   |   | (881 | ) |   |   | (2,603 | ) |
| Net                  (Loss) Income                                     |   | $                                                     | (470   | )      |                                                      | $      | (3,110 | ) |   | $ | 503 |   |   | $ | (2,887 | ) |
| Basic                  (Loss) Income Per Share                         |   | $                                                     | (0.28  | )      |                                                      | $      | (1.90 | ) |   | $ | 0.30 |   |   | $ | (1.76 | ) |

----

**The          “Other” line in continuing operations includes corporate costs directly          associated with the unregulated subsidiaries, common costs not allocated          to the          regulated utility, MAM USG results and inter-company eliminations. “Other” in          discontinued operations is the operating results for Energy          Atlantic.*

***Interest        Expense***

***Income        Tax Expense / Benefit***

----

***Taxes        Other Than Income***

***Regulated        Operations***

|                                                                                 |   | **Quarter                  Ended** |   |   | **Nine                  Months Ended** |   |
|--------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|----------------------------------------|--------|
|                                                                                 |   | **September 30,**             |   |   | **September 30,**                 |   |
|                                                                                 |   | **2007**                           |   |   | **2006**                               |   |   | **2007** |   |   | **2006** |   |
| Net                  (Loss) Income — Regulated Electric Utility (In thousands) |   | $                                  | (190   | )      |                                   | $      | (373 | ) |   | $ | 2,223 |   |   | $ | 844 |   |
| (Loss)                  Earnings Per Share from Regulated Electric Utility           |   | $                                  | (0.11  | )      |                                   | $      | (0.23 | ) |   | $ | 1.33 |   |   | $ | 0.52 |   |

***Regulated        Operating Revenue***

|                                            |   | **Quarter                  Ended September 30,** |   |   | **Nine                  Months Ended September 30,** |   |
|-------------------------------------------------|--------|-------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------|
|                                            |   | **2007**                                              |   |   | **2006**                                                  |   |   | **2007** |   |   | **2006** |   |
|                                            |   | **Dollars**                                           |   |   | **MWH**                                                   |   |   | **Dollars** |   |   | **MWH** |   |   | **Dollars** |   |   | **MWH** |   |   | **Dollars** |   |   | **MWH** |   |
| Residential                                     |   | $                                                     | 3,531  |   |                                                      |   | 41,515 |   |   | $ | 3,544 |   |   |   | 42,857 |   |   | $ | 11,424 |   |   |   | 135,637 |   |   | $ | 10,794 |   |   |   | 134,700 |   |
| Large                  Commercial               |   |                                                  | 1,102  |   |                                                      |   | 42,621 |   |   |   | 1,103 |   |   |   | 41,387 |   |   |   | 3,609 |   |   |   | 129,035 |   |   |   | 3,746 |   |   |   | 128,107 |   |
| Medium                  Commercial              |   |                                                  | 1,164  |   |                                                      |   | 27,594 |   |   |   | 1,125 |   |   |   | 27,675 |   |   |   | 4,149 |   |   |   | 80,885 |   |   |   | 3,965 |   |   |   | 78,890 |   |
| Small                  Commercial               |   |                                                  | 1,373  |   |                                                      |   | 20,952 |   |   |   | 1,336 |   |   |   | 20,841 |   |   |   | 5,290 |   |   |   | 69,249 |   |   |   | 4,951 |   |   |   | 67,780 |   |
| Other                  Retail                   |   |                                                  | 232    |   |                                                      |   | 849 |   |   |   | 223 |   |   |   | 841 |   |   |   | 688 |   |   |   | 2,544 |   |   |   | 635 |   |   |   | 2,533 |   |
|                                            |   |                                                  |   |   |                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Regulated Retail Revenue |   |                                                  | 7,402  |   |                                                      |   | 133,531 |   |   |   | 7,331 |   |   |   | 133,601 |   |   |   | 25,160 |   |   |   | 417,350 |   |   |   | 24,091 |   |   |   | 412,010 |   |
|                                            |   |                                                  |   |   |                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  Revenue                  |   |                                                  | 614    |   |                                                      |   |   |   |   |   | 702 |   |   |   |   |   |   |   | 1,722 |   |   |   |   |   |   |   | 1,408 |   |   |   |   |   |
|                                            |   |                                                  |   |   |                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Regulated Revenue        |   | $                                                     | 8,016  |   |                                                      |   |   |   |   | $ | 8,033 |   |   |   |   |   |   | $ | 26,882 |   |   |   |   |   |   | $ | 25,499 |   |   |   |   |   |

----

***Regulated        Utility Expenses***

|                                                                     |   | **Quarter                  Ended September 30,**    |   |   | **Nine                  Months Ended September 30,**    |   |
|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------|--------|
| *(In                  thousands of dollars)*                             |   | **2007**                                                                |   |   | **2006**                                                                    |   |   | **2007** |   |   | **2006** |   |
| Regulated                  Operation and Maintenance                     |   |                                                                    |   |   |                                                                        |   |   |   |   |   |   |   |
| Labor                                                                    |   | $                                                                       | 1,482  |   |                                                                        | $      | 1,366 |   |   | $ | 3,733 |   |   | $ | 3,860 |   |
| Benefits                                                                 |   |                                                                    | 799    |   |                                                                        |   | 460 |   |   |   | 1,511 |   |   |   | 1,527 |   |
| Outside                  Services                                        |   |                                                                    | 466    |   |                                                                        |   | 413 |   |   |   | 907 |   |   |   | 784 |   |
| Holding                  Company Management Costs                        |   |                                                                    | 437    |   |                                                                        |   | 713 |   |   |   | 1,399 |   |   |   | 1,854 |   |
| Insurance                                                                |   |                                                                    | 158    |   |                                                                        |   | 158 |   |   |   | 431 |   |   |   | 416 |   |
| Regulatory                  and Licensing                                |   |                                                                    | 276    |   |                                                                        |   | 246 |   |   |   | 776 |   |   |   | 669 |   |
| Transportation                                                           |   |                                                                    | 169    |   |                                                                        |   | 172 |   |   |   | 658 |   |   |   | 620 |   |
| Maintenance                                                              |   |                                                                    | 132    |   |                                                                        |   | 142 |   |   |   | 437 |   |   |   | 548 |   |
| Other                                                                    |   |                                                                    | 473    |   |                                                                        |   | 386 |   |   |   | 1,084 |   |   |   | 1,019 |   |
| Total                  Regulated Operation and Maintenance               |   | $                                                                       | 4,392  |   |                                                                        | $      | 4,056 |   |   | $ | 10,936 |   |   | $ | 11,297 |   |
|                                                                     |   |                                                                    |   |   |                                                                        |   |   |   |   |   |   |   |   |   |   |   |
| Stranded                  Costs                                          |   |                                                                    |   |   |                                                                        |   |   |   |   |   |   |   |   |   |   |   |
| Wheelabrator-Sherman                                                     |   | $                                                                       | -      |   |                                                                        | $      | 1,930 |   |   | $ | - |   |   | $ | 5,798 |   |
| Maine                  Yankee                                            |   |                                                                    | 721    |   |                                                                        |   | 788 |   |   |   | 2,162 |   |   |   | 2,195 |   |
| Seabrook                                                                 |   |                                                                    | 384    |   |                                                                        |   | 384 |   |   |   | 1,153 |   |   |   | 1,153 |   |
| Amortization                  of Wheelabrator-Sherman Restructuring Pmt. |   |                                                                    | -      |   |                                                                        |   | 363 |   |   |   | - |   |   |   | 1,088 |   |
| Deferred                  Fuel                                           |   |                                                                    | 1,346  |   |                                                                        |   | (735 | ) |   |   | 4,195 |   |   |   | (2,266 | ) |
| Cost                  Incentive Refund                                   |   |                                                                    | 63     |   |                                                                        |   | - |   |   |   | 187 |   |   |   | - |   |
| Cancelled                  Transmission Plant                            |   |                                                                    | 64     |   |                                                                        |   | 191 |   |   |   | 192 |   |   |   | 191 |   |
| Special                  Discounts                                       |   |                                                                    | 70     |   |                                                                        |   | 70 |   |   |   | 210 |   |   |   | 210 |   |
| Total                  Stranded Costs                                    |   | $                                                                       | 2,648  |   |                                                                        | $      | 2,991 |   |   | $ | 8,099 |   |   | $ | 8,369 |   |

|  | · | Labor                  and benefits increased $455,000 from the third quarter of 2006                  to the                  third quarter of 2007.  Based on the current year claims trend                  and projected run-out, $190,000 of additional health insurance                  was accrued                  in the third quarter of 2007 for the Company’s contingent health care                  premium.  Under this arrangement, the Company retained some risk                  for its claims experience in exchange for a reduced                  premium.  The additional 401(k) contributions to employees as a                  result of the 2006 pension freeze also increased expense, by                  $205,000. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outside                  service expenses increased $53,000, as a result of increased legal                  expenses for pending litigation and regulatory                  compliance. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Computer                  and vehicle rental expense, included in “Other” expenses above, increased                  $48,000, due to operating rental agreements prior to the finalization                  of                  the capital leases for 2007. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Regulatory                  assessments increased $30,000, due to an increase in one regulatory                  assessment rate. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|  | · | Holding                  company management costs year-to-date decreased $455,000 from 2006,                  as a                  result of the severance and due diligence costs incurred in 2006,                  and a                  reduction in the overall size and cost of MAM management and external                  consulting arrangements. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | · | Labor                  and benefits expenses decreased $143,000, due to the net decrease                  in                  severance expenses from the September 2006 reduction in force,                  compared to                  severance expenses incurred in August                  2007. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | Outside                  services increased $123,000, due to legal expenses for pending                  litigation                  and regulatory compliance. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | The                  increase in regulatory assessments raised operating expenses by                  $107,000                  over 2006. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

***Other        Continuing Operations***

|                                                                         |   | **Quarter                  Ended** |   |   | **Nine                  Months Ended** |   |
|------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|----------------------------------------|--------|
|                                                                         |   | **September 30,**             |   |   | **September 30,**                 |   |
|                                                                         |   | **2007**                           |   |   | **2006**                               |   |   | **2007** |   |   | **2006** |   |
| Net                  Loss — Other Continuing Operations (in thousands) |   | $                                  | (172   | )      |                                   | $      | (700 | ) |   | $ | (839 | ) |   | $ | (1,128 | ) |
| Loss                  Per Share from Other Continuing Operations             |   | $                                  | (0.10  | )      |                                   | $      | (0.43 | ) |   | $ | (0.50 | ) |   | $ | (0.69 | ) |

***Unregulated        Engineering Services – Discontinued Operations***

|                                                                        |   | **Quarter                  Ended September 30,** |   |   | **Nine                  Months Ended September 30,** |   |
|-----------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------|
| *(In                  thousands of dollars)*                                |   | **2007**                                              |   |   | **2006**                                                  |   |   | **2007** |   |   | **2006** |   |
| Net                  Loss — Unregulated Engineering Services          |   | $                                                     | (108   | )      |                                                      | $      | (1,817 | ) |   | $ | (634 | ) |   | $ | (2,137 | ) |
| Basic                  Loss Per Share from Unregulated Engineering Services |   | $                                                     | (0.06  | )      |                                                      | $      | (1.11 | ) |   | $ | (0.38 | ) |   | $ | (1.30 | ) |

----

***Unregulated        Software Technology- Discontinued Operations***

|                                                                             |   | **Quarter                  Ended** |   |   | **Nine                  Months Ended** |   |
|----------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|----------------------------------------|--------|
|                                                                             |   | **September 30,**             |   |   | **September 30,**                 |   |
|                                                                             |   | **2007**                           |   |   | **2006**                               |   |   | **2007** |   |   | **2006** |   |
| Net                  Loss — Unregulated Software Technology (In thousands) |   | $                                  | -      |   |                                   | $      | (220 | ) |   | $ | (247 | ) |   | $ | (467 | ) |
| Loss                  Per Share from Unregulated Software Technology             |   | $                                  | -      |   |                                   | $      | (0.13 | ) |   | $ | (0.15 | ) |   | $ | (0.28 | ) |

***Income        Taxes***

***Off-Balance        Sheet Arrangements and Financial Information System Hosting        Agreement***

***Liquidity        and Capital Resources***

----

***Regulatory        Proceedings***

***Item        3. Quantitative and Qualitative Disclosures about Market        Risk***

|  | (a) | MAM                  and its subsidiaries are faced with interest rate risk on the MAM                  $4.0                  million Bank of America line of credit, the TMG $1.45 million Katahdin                  Trust Company term note with Katahdin Trust Company, and the MPS                  $10                  million Bank of America line of credit and unsecured $6 million,                  seven-year Bank of America term                  loan. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Transactions                  with Me&NB, and MAM’s investment in Maricor Properties Ltd are subject                  to foreign currency translation risk.  Income and expenses are                  translated at average rates of exchange for the period of time                  the income                  is earned or the expenses are incurred.  Assets and liabilities                  are translated at period-end exchange                  rates. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | Market                  price protection was given by MTI under the terms of the sale of                  MTI                  assets to HCI on April 13, 2007.  Under this agreement, HCI                  converted its remaining 6,500 preferred shares to 26,000 common                  shares on                  that date.  If MAM’s stock price is less than $25 on March 31,                  2008, HCI is entitled to additional shares of common stock.  The                  3,000 preferred shares previously converted to common shares by                  HCI do not                  have this feature. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | MAM                  is subject to certain risks associated with its investment in Maricor                  Properties, including its subsidiary, Cornwallis, and with TMGC’s                  investment in Mecel.  These risks and uncertainties include, but                  are not necessarily limited to, interest rate risks associated                  with                  variable interest rate;, shifts in local real estate market conditions;                  market-based competition; the inability to fully lease rental properties;                  facility performance related to unforeseen or unknown structural,                  mechanical and/or electrical systems failures; unexpected increases                  in                  property rehabilitation costs; new government regulations; and                  tenant                  credit and default risks. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Item        4. Controls and Procedures***

| 1. | Evaluation                  of disclosure controls and                  procedures |
|----|------------------------------------------------------------------------------------|

| 2. | Changes                  in Internal Controls over Financial                  Reporting |
|----|-----------------------------------------------------------------------------------------|

----

**PART        II. OTHER INFORMATION**

***Item        1. Legal Proceedings***

**Legal        Proceedings**

**Surplec,        Inc.**

**Regulatory        Matters**

**Notice        of Inquiry Regarding Allowance of Electric Utilities in Maine to Reenter        Energy        Supply Business**

**Federal        Energy Regulatory Commission 2007 Open Access Transmission Tariff Formula        Rate        Filing**

**Stakeholder        Initiative Regarding the Competitiveness and Reliability of the Northern        Maine        Power Grid**

----

***Item        1A.  Risk Factors***

***Liquidity        and Capital Formation Risk***

***Equity        Price Risk***

***Interest        Rate and Debt Covenant Risk***

***Divestiture        of Unregulated Segments***

----

***Professional        Liability***

***Item        2. Unregistered Sales of Equity Securities and Use of        Proceeds***

***Item        3. Defaults upon Senior Securities***

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

***Item        5. Other Information***

***Item        6. Exhibits***

|   | · | Exhibit                  10(a) Severance Agreement and                  Release |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Exhibit                  31 Rule 13a-14(a)/15d-14(a)                  Certifications |
|--------|--------|--------------------------------------------------------------------------------------|

|   | · | Exhibit                  32 Certification of Financial Reports Pursuant to 18 USC Section                  1350 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

----

| /s/                Randi J. Arthurs |   |
|-------------------------------------|--------|

----