UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

               For the quarterly period ended March 31, 2000
                                              ---------------

                                                         OR

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

               For the transition period from           to
                                              ---------    ---------

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


001-14786                  CMP GROUP, INC.                01-0519429
               83 Edison Drive, Augusta, Maine  04336
                           (207) 623-3521

 1-5139              CENTRAL MAINE POWER COMPANY          01-0042740
               83 Edison Drive, Augusta, Maine  04336
                           (207) 623-3521

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

         CMP Group, Inc.:                   Yes   X    No
         Central Maine Power Company:       Yes   X    No

This  combined  Form 10-Q is separately  filed by CMP Group,  Inc.,  and Central
Maine Power Company.  Information contained herein relating to either individual
registrant is filed by such registrant on its own behalf.  Each registrant makes
no representation as to information relating to the other registrant.

As of May 12, 2000,  the number of shares of Common Stock  outstanding  for each
registrant was as follows:

                            Registrant                            Shares

CMP Group, Inc., Common Stock, $5 Par Value                     32,442,552
Central Maine Power Company, Common Stock, $5 Par Value (All
   held by CMP Group, Inc.)                                     31,211,471

<PAGE>
                                Table of Contents

                                                                          Page
                                                                         Number

Glossary                                                                     1

Part I.  Financial Information

Item 1 - Consolidated Financial Statements

CMP Group, Inc.
   Consolidated Statement of Earnings for the Three Months
   Ended March 31, 2000 and 1999                                             4

   Consolidated Balance Sheet - March 31, 2000 and December 31, 1999:
     Assets                                                                  5
     Stockholders' Equity and Liabilities                                    6

   Consolidated Statement of Cash Flows for the Three Months
   Ended March 31, 2000 and 1999                                             7

Central Maine Power Company
   Consolidated Statement of Earnings for the Three Months
   Ended March 31, 2000 and 1999                                             8

   Consolidated Balance Sheet - March 31, 2000 and December 31, 1999:
     Assets                                                                  9
     Stockholders' Equity and Liabilities                                   10

   Consolidated Statement of Cash Flows for the Three Months
   Ended March 31, 2000 and 1999                                            11

Notes to Consolidated Financial Statements                                  12

Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations                                         25

Item 3 - Quantitative and Qualitative Disclosures About Market Risk         39

Part II.  Other Information                                                 40

Signatures                                                                  42

<PAGE>
                                    GLOSSARY

The following  abbreviations  or acronyms are used in the text of this Form 10-Q
as defined below:

    Term                                          Definition

Form 10-K                       Annual Report on Form 10-K

ARP                             Alternative Rate Plan

Central Maine                   Central Maine Power Company, a regulated
                                electric utility and subsidiary of CMP Group.

Central Securities              Central Securities Corporation, a wholly owned
                                subsidiary of Central Maine which owns and
                                manages real estate.

CEP                             Competitive Energy Provider

CERCLA                          Comprehensive Environmental Response,
                                Compensation, and Liability Act.

CMP Group                       CMP Group, Inc., is the holding company
                                organized  effective  September  1, 1998,  which
                                owns all of the common  stock of Central Maine
                                Power Company, Union Water Power Company,
                                MaineCom Services, CNEX, MainePower, TeleSmart
                                and New England Gas Development.

CMP Group System                CMP Group and its wholly-owned and directly and
                                indirectly controlled subsidiaries.

CNEX                            A wholly owned subsidiary of CMP Group,
                                (previously called CMP International
                                Consultants), which provides utility consulting
                                (domestic and international) and research.

Connecticut Yankee              Connecticut Yankee Atomic Power Company

EITF                            Emerging Issues Task Force of FASB

Energy East                     Energy East Corporation, a New York holding
                                company and the parent company of NYSEG
                                effective May 1, 1998

EPA                             United States Environmental Protection Agency.

ERAM                            Electric Revenue Adjustment Mechanism

FASB                            Financial Accounting Standards Board

FERC                            Federal Energy Regulatory Commission

FEV                             Fairfield Energy Venture

FPL                             FPL Group, Inc.

IRS                             United States Internal Revenue Service

ISFSI                           Independent spent fuel storage installation

ISO                             Independent System Operator

Kwh                             Kilowatt-hour

MaineCom                        MaineCom Services, a CMP Group subsidiary which
                                arranges fiber-optic data service for bulk
                                carriers.

Maine Natural Gas               Maine Natural Gas, L.L.C., (previously called
                                CMP Natural Gas, L.L.C.) a limited-liability
                                company owned by subsidiaries of CMP Group and
                                Energy East to distribute natural gas in Maine.

MEPCO                           Maine Electric Power Company, Inc., a 78-percent
                                owned subsidiary of Central Maine which owns a
                                345-KV transmission line from Wiscasset, Maine,
                                to New Brunswick, Canada.

MPUC                            Maine Public Utilities Commission

Maine Yankee                    Maine Yankee Atomic Power Company, a 38-percent
                                owned subsidiary of Central Maine.

NEON                            NorthEast Optic Network, Inc., a corporation of
                                which MaineCom indirectly owns approximately
                                38-percent of the common stock, which is
                                building a fiber optic network in New  England
                                and New York.

NRC                             United States Nuclear Regulatory Commission

NYSEG                           New York State Electric & Gas Corporation, a
                                utility subsidiary of Energy East.

NUG                             Non-utility generator

New England Gas                 New England Gas Development Corporation, a
Development                     wholly-owned subsidiary of CMP Group created in
                                September 1998 to hold up to a 50-percent
                                ownership interest in Maine Natural Gas.

OPA                             Maine Office of the Public Advocate

Plant                           Maine Yankee nuclear generating plant at
                                Wiscasset, Maine

RCRA                            Resource Conservation and Recovery Act.

SEC                             Securities and Exchange Commission

Secondary Purchasers            28 municipal and cooperative utilities that had
                                purchased Maine Yankee power under identical
                                contracts with Maine Yankee sponsors.

SFAS                            Statement of Financial Accounting Standards

SOP                             Standard Offer Provider.

TeleSmart                       A closed wholly owned former subsidiary of CMP
                                Group which provided accounts receivable
                                management.

Union Water                     The Union Water Power Company, a wholly owned
                                subsidiary of CMP Group.

Vermont Yankee                  Vermont Yankee Nuclear Power Corporation.

Yankee Atomic                   Yankee Atomic Electric Company

<PAGE>

                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

In the opinion of CMP Group, the unaudited financial  statements included herein
reflect all  adjustments  necessary to present fairly the  Consolidated  Balance
Sheet as of March 31,  2000,  and the  Consolidated  Statement  of Earnings  and
Consolidated Cash Flows for the periods ended March 31, 2000 and 1999. CMP Group
is the parent holding company of Central Maine, Union Water, MaineCom,  CNEX and
New England Gas Development.  Central Maine constitutes substantially all of CMP
Group's assets, revenues and expenses. All nonutility operating transactions are
included in other  revenues and operating  expenses in CMP Group's  Consolidated
Statement of Income.
<TABLE>
<S>                                                               <C>            <C>
                        CMP Group, Inc. and Subsidiaries
                       Consolidated Statement Of Earnings
                                   (Unaudited)
                (Dollars in thousands, except per-share amounts)
                                                                   For the Three Months
                                                                       Ended March 31,
                                                                   --------------------
                                                                   2000           1999
                                                                   ----           ----
Revenues
     Electric operating revenues                                  $263,038       $270,694
     Other non-utility revenues                                      6,387          5,939
                                                                   -------        -------
        Total Revenues                                             269,425        276,633
                                                                   -------        -------
Operating Expenses
     Fuel used for company generation                                  270          8,947
     Purchased power
        Energy                                                     110,404         94,475
        Other (capacity)                                            28,410         22,774
     Other operation                                                53,326         53,204
     Maintenance                                                     6,456          8,274
     Depreciation and amortization                                  10,772         14,672
     Taxes other than income taxes                                   4,915          7,405
                                                                   -------        -------
        Total Operating Expenses                                   214,553        209,751
                                                                   -------        -------

Operating Income                                                    54,872         66,882
                                                                   -------        -------
Other Income (Expense)
     Equity in earnings (losses) of associated companies            (2,712)        (2,979)
     Allowance for equity funds used during construction               223            192
     Interest income                                                 1,993            488
     Recovery of nonprovided deferred income taxes                  75,421              -
     Other, net                                                      5,292            747
     Minority interest in consolidated net income                      (59)          (625)
     Gain on sale of investments and properties                        223          7,011
                                                                   -------        -------
        Total Other Income (Expense)                                80,381          4,834
                                                                   -------        -------
Interest Charges
     Long-term debt                                                  3,464         10,553
     Other interest                                                 19,186          1,380
     Allowance for borrowed funds used during construction             (48)          (137)
                                                                   -------        -------
        Total Interest Charges                                      22,602         11,796
                                                                   -------        -------

Income Before Income Taxes and Preferred Dividends                 112,651         59,920
     Income taxes                                                   83,713         25,744
     Dividends on Preferred Stock of Subsidiary                        559            919
                                                                  --------        -------
Net Income                                                       $  28,379       $ 33,257
                                                                  ========        =======
Weighted Average Number Of Shares Of Common
     Stock Outstanding - Basic                                  32,442,552     32,442,552
Earnings Per Share Of Common Stock - Basic                            $.87          $1.03
Weighted Average Number of Shares of Common
     Stock Outstanding - Diluted                                32,762,419     32,553,706
Earnings Per Share Of Common Stock - Diluted                          $.87          $1.02

Dividends Declared Per Share Of Common Stock                        $0.225         $0.225

The accompanying notes are an integral part of these financial statements.

</TABLE>

<PAGE>
<TABLE>
<S>                                                                   <C>              <C>
                        CMP Group, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                   (Unaudited)
                             (Dollars in thousands)

                                    ASSETS                              March 31,       December 31,
                                                                          2000              1999
Current Assets

    Cash and cash equivalents                                         $   139,818      $   129,950
    Accounts receivable, less allowance for uncollectible accounts of
    $3,182 in 2000 and $2,994 in 1999
       Service   - billed                                                  82,896           86,599
                 - unbilled                                                22,209           51,124
       Other accounts receivable                                           18,843           21,662
    Inventories, at average cost
       Fuel oil                                                               170              177
       Materials and supplies                                               9,152           10,390
    Prepayments and other current assets                                    6,108            9,716
                                                                       ----------       ----------
          Total Current Assets                                            279,196          309,618
                                                                       ----------       ----------

Electric Property, at original cost                                     1,344,186        1,335,674
    Less: Accumulated depreciation                                        553,623          551,014
                                                                       ----------       ----------
          Net electric property in service                                790,563          784,660
                                                                       ----------       ----------

    Construction work in progress                                          32,702           33,681
    Nuclear fuel, less accumulated amortization of $10,204 in 2000
    and $9,516 in 1999                                                      1,216            1,418

Property, non utility                                                      21,213           18,487
    Less: Accumulated Depreciation                                          6,579            5,574
                                                                       ----------       ----------
          Net non-utility property                                         14,634           12,913
                                                                       ----------       ----------
          Total net property                                              839,115          832,672

Investments In Associated Companies, at equity                             46,597           51,059
                                                                       ----------       ----------
    Total Net Property and Investments in Associated Companies            885,712          883,731
                                                                       ----------       ----------

Deferred Charges And Other Assets
    Recoverable costs of Seabrook 1 and abandoned projects, net                 -           73,052
    Nuclear purchased-power contracts                                     256,838          270,311
    Regulatory assets-nuclear impairment                                   16,335           77,489
    Regulatory assets - deferred taxes                                    123,779          204,994
    Other deferred charges and other assets                               144,965          228,065
                                                                       ----------       ----------
          Deferred Charges and Other Assets, Net                          541,917          853,911
                                                                       ----------       ----------

          Total Assets                                                 $1,706,825       $2,047,260
                                                                       ==========        =========

The accompanying notes are an integral part of these financial statements

</TABLE>

<PAGE>
<TABLE>
<S>                                                        <C>               <C>

                        CMP Group, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                   (Unaudited)
                             (Dollars in thousands)

                   STOCKHOLDERS' EQUITY AND LIABILITIES      March 31,       December 31,
                                                               2000              1999
Current Liabilities and Interim Financing

    Interim financing                                      $    30,000       $     60,199
    Sinking-fund requirements                                   20,539             11,937
    Accounts payable                                            71,896            104,581
    Dividends payable                                            7,431              7,412
    Accrued interest                                             2,005              2,678
    Accrued income taxes                                         9,780                  -
    Accounts Payable to Energy Provider                          9,352                  -
    Miscellaneous current liabilities                           15,093             16,731
                                                             ---------          ---------
       Total Current Liabilities and Interim Financing         166,096            203,538
                                                             ---------          ---------

Commitments and Contingencies

Reserves and Deferred Credits
    Accumulated deferred income taxes                           64,717             66,472
    Unamortized investment tax credits                          10,352             13,926
    Nuclear purchased-power contracts                          256,838            270,311
    Regulatory liabilities-deferred taxes                       46,298             60,564
    Deferred gain on generation asset sale                     250,447            536,368
    Other reserves and deferred credits                        199,396            194,162
                                                             ---------          ---------
       Total Reserves and Deferred Credits                     828,048          1,141,803
                                                             ---------          ---------

Long-Term Debt
    Mortgage debt                                                    -                  -
    Other long-term obligations                                113,182            122,542
                                                             ---------          ---------
       Total Long-Term Obligations                             113,182            122,542
                                                             ---------          ---------

Redeemable Preferred Stock                                         910                910
                                                             ---------          ---------
Stockholders' Equity
    Common-stock                                               162,213            162,213
    Other paid in capital                                      284,394            284,330
    Reacquired common stock                                     (1,596)              (642)
    Retained earnings                                          118,050             97,038
    Preferred stock                                             35,528             35,528
                                                             ---------          ---------
       Total Stockholders' Equity                              598,589            578,467
                                                             ---------          ---------

       Total Stockholders' Equity and Liabilities           $1,706,825         $2,047,260
                                                             =========          =========

The accompanying notes are an integral part of these financial statements.

</TABLE>

<PAGE>
<TABLE>
<S>                                                                       <C>             <C>
                                 CMP Group, Inc. and Subsidiaries
                               CONSOLIDATED STATEMENT OF CASH FLOWS
                                           (Unaudited)
                                      (Dollars in thousands)
                                                                           For the Three Months
                                                                              ended March 31,
                                                                              2000         1999
CASH FROM OPERATIONS

    Net income                                                            $  28,379       $33,257
    Items not requiring (not providing) cash:
       Depreciation                                                           8,767        12,136
       Amortization                                                           7,337         9,179
       Deferred income taxes and investment tax credits, net                (13,462)       (2,934)
       Allowance for equity funds used during construction                     (223)         (192)
    Preferred stock dividends of subsidiary                                     559           919
    Gain on sale of investments and properties                                    -        (7,060)
    Recovery of power supply costs through the asset sale deferred gain      (9,612)            -
    Changes in certain assets and liabilities:
       Accounts receivable                                                   21,765         3,139
       Other current assets                                                   2,671           494
       Inventories                                                            1,245         1,258
       Accounts payable                                                     (29,645)       (9,287)
       Accrued taxes and interest                                             9,107        13,208
       Miscellaneous current liabilities                                      7,714         3,055
    Changes in deferred balances and related carrying costs                  12,660          (734)
    MaineCom equity losses in NEON                                            4,428         3,369
    Other, net                                                                3,209         3,648
                                                                            -------       -------
          Net Cash Provided by Operating Activities                          54,899        63,455
                                                                            -------       -------
INVESTING ACTIVITIES
       Construction expenditures                                            (19,161)      (11,241)
       Customer deposits for construction                                    16,940             -
       Proceeds from sale of investments and properties                           -         7,563
       Changes in accounts payable - investing activities                    (3,040)       (4,709)
                                                                            -------       -------
          Net Cash Used by Investing Activities                              (5,261)       (8,387)
                                                                            -------       -------
FINANCING ACTIVITIES
    Redemptions:
       Medium-term notes                                                    (30,000)            -
       Revolving Credit Agreement                                                 -       (40,000)
       Other long-term obligations                                             (957)            -
       Short-term obligations, net                                                -        (5,000)
    Purchase of treasury stock                                                 (954)         (187)
    Dividends:
       Common stock                                                          (7,300)       (7,299)
       Preferred stock of subsidiary                                           (559)
                                                                            -------       -------
          Net Cash Used by Financing Activities                             (39,770)      (52,486)
                                                                            -------       -------
          Net Increase  in Cash                                               9,868         2,582
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                              129,950        30,540
                                                                            -------       -------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                   $139,818       $33,122
                                                                            =======        ======

For purposes of the  statement of cash flows,  the Company  considers all highly
liquid  instruments  purchased  having a maturity of three  months or less to be
cash equivalents.

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

In the opinion of Central Maine,  the unaudited  financial  statements  included
herein  reflect all  adjustments  necessary to present  fairly the  Consolidated
Balance Sheet as of March 31, 2000, and the Consolidated Statement of Income and
Consolidated  Cash Flows for the periods ended March 31, 2000 and 1999.  Central
Maine's consolidated  financial statements include the accounts of Central Maine
and its wholly  owned and  controlled  subsidiaries.  All  nonutility  operating
transactions  are included in other  revenues and operating  expenses in Central
Maine's Consolidated Statement of Income.
<TABLE>
<S>                                                            <C>             <C>
                  Central Maine Power Company and Subsidiaries
                       Consolidated Statement Of Earnings
                                   (Unaudited)
                (Dollars in thousands, except per-share amounts)

                                                                 For the Three Months
                                                                    Ended March 31,
                                                                 2000            1999
                                                                 ----            ----
Revenues

     Electric operating revenues                               $263,118        $270,570
     Other non-utility revenues                                     223             479
                                                                -------         -------
        Total Revenues                                          263,341         271,049
                                                                -------         -------
Operating Expenses
     Fuel used for company generation                               270           8,947
     Purchased power
        Energy                                                  110,404          94,475
        Other (capacity)                                         28,410          22,774
     Other operation                                             46,755          47,849
     Maintenance                                                  6,476           8,061
     Depreciation and amortization                               10,398          14,449
     Taxes other than income taxes                                4,899           7,361
                                                               --------         -------
        Total Operating Expenses                                207,612         203,916
                                                               --------         -------
Operating Income                                                 55,729          67,133
                                                               --------         -------
Other Income (Expense)
     Equity in earnings of associated companies                   1,754             971
     Allowance for equity funds used during construction            223             192
     Interest income                                              1,840             297
     Recovery of nonprovided deferred income taxes               75,421               -
     Other, net                                                   5,259             277
     Minority interest in consolidated net income                   (59)           (625)
     Gain on sale of investments and properties                     223           7,010
                                                               --------         -------
        Total Other Income (Expense)                             84,661           8,122
                                                               --------         -------
Interest Charges
     Long-term debt                                               3,420          10,504
     Other interest                                              19,180           1,373
     Allowance for borrowed funds used during construction          (48)           (137)
                                                               --------         -------
        Total Interest Charges                                   22,552          11,740
                                                               --------         -------

Income Before Income Taxes                                      117,838          63,515
     Income taxes                                                84,070          25,868
                                                               --------         -------
Net Income                                                       33,768          37,647
     Dividends on Preferred Stock                                   559             919
                                                               --------         -------
Earnings Applicable to Common  Stock                          $  33,209        $ 36,728
                                                               ========         =======

Weighted Average Number Of Shares Of Common

     Stock Outstanding                                       31,211,471      31,211,471

Earnings Per Share Of Common Stock - Basic and Diluted            $1.06           $1.18

Dividends Declared Per Share Of Common Stock                     $0.360          $0.225

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
<TABLE>
<S>                                                                      <C>              <C>
                  Central Maine Power Company and Subsidiaries
                           Consolidated Balance Sheet
                                   (Unaudited)
                             (Dollars in thousands)

                                    ASSETS                                 March 31,       December 31,
                                                                             2000             1999
Current Assets

    Cash and cash equivalents                                            $   122,221      $   112,872
    Accounts receivable, less allowance for uncollectible accounts of
    $3,182 in 2000 and $2,994 in 1999
       Service   - billed                                                     82,634           86,455
                 - unbilled                                                   22,209           51,124
       Other accounts receivable                                              11,380           19,647
    Inventories, at average cost
       Fuel oil                                                                  170              177
       Materials and supplies                                                  9,134            9,927
    Prepayments and other current assets                                       5,780            8,393
                                                                           ---------        ---------
          Total Current Assets                                               253,528          288,595
                                                                           ---------        ---------

Electric Property, at original cost                                        1,344,182        1,335,670
    Less: Accumulated depreciation                                           553,598          550,990
                                                                           ---------        ---------
          Net electric property in service                                   790,584          784,680
                                                                           ---------        ---------

    Construction work in progress                                             31,562           32,357
    Nuclear fuel, less accumulated amortization of $10,204 in 2000
    and $9,516 in 1999                                                         1,216            1,418

Property, non utility                                                         11,199           10,430
    Less: Accumulated Depreciation                                             3,743            3,069
                                                                           ---------        ---------
          Net non-utility property                                             7,456            7,361
                                                                           ---------        ---------
          Total net property                                                 830,818          825,816

Investments In Associated Companies, at equity                                38,212           38,236
                                                                           ---------        ---------
    Total Net Property and Investments in Associated Companies               869,030          864,052
                                                                           ---------        ---------
Deferred Charges And Other Assets
    Recoverable costs of Seabrook 1 and abandoned projects, net                    -           73,052
    Nuclear purchased-power contracts                                        256,838          270,311
    Regulatory asset-nuclear impairment                                       16,335           77,489
    Regulatory assets - deferred taxes                                       123,779          204,994
    Other deferred charges and other assets                                  140,779          223,341
                                                                           ---------        ---------
          Deferred Charges and Other Assets, Net                             537,731          849,187
                                                                           ---------        ---------

          Total Assets                                                    $1,660,289       $2,001,834
                                                                           =========        =========

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
<TABLE>
<S>                                                      <C>                <C>
                  Central Maine Power Company and Subsidiaries
                           Consolidated Balance Sheet
                                   (Unaudited)
                             (Dollars in thousands)

                   STOCKHOLDERS' EQUITY AND LIABILITIES    March 31,        December 31,
                                                             2000               1999
Current Liabilities and Interim Financing

    Interim financing                                    $    30,000        $    60,000
    Sinking-fund requirements                                 20,539             11,937
    Accounts payable                                          70,002            107,600
    Dividends payable                                            131                112
    Accrued interest                                           2,005              2,678
    Income taxes payable to parent company                    10,600                  -
    Accounts payable to energy provider                        9,352                  -
    Miscellaneous current liabilities                         14,412             15,855
                                                           ---------          ---------
       Total Current Liabilities and Interim Financing       157,041            198,182
                                                           ---------          ---------

Commitments and Contingencies

Reserves and Deferred Credits
    Accumulated deferred income taxes                         62,510             63,792
    Unamortized investment tax credits                        10,352             13,926
    Nuclear purchased-power contracts                        256,838            270,311
    Regulatory liabilities-deferred taxes                     46,298             60,564
    Deferred gain on generation asset sale                   250,447            536,368
    Other reserves and deferred credits                      186,824            181,348
                                                           ---------          ---------
       Total Reserves and Deferred Credits                   813,269          1,126,309
                                                           ---------          ---------
Long-Term Debt
    Mortgage debt                                                  -                  -
    Other long-term obligations                              110,850            120,186
                                                           ---------          ---------
       Total Long-Term Obligations                           110,850            120,186
                                                           ---------          ---------

Redeemable Preferred Stock                                       910                910
                                                           ---------          ---------

Stockholders' Equity
    Common-stock                                             162,213            162,213
    Other paid in capital                                    276,776            276,709
    Reacquired common stock                                  (19,000)           (19,000)
    Retained earnings                                        122,659            100,754
    Preferred stock                                           35,571             35,571
                                                           ---------          ---------
       Total Stockholders' Equity                            578,219            556,247
                                                           ---------          ---------

       Total Stockholders' Equity and Liabilities         $1,660,289         $2,001,834
                                                           =========          =========

The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>
<TABLE>
<S>                                                                       <C>           <C>
                           Central Maine Power Company and Subsidiaries
                               CONSOLIDATED STATEMENT OF CASH FLOWS
                                           (Unaudited)
                                      (Dollars in thousands)
                                                                           For the Three Months
                                                                               Ended March 31,
                                                                             2000          1999
                                                                             ----          ----
CASH FROM OPERATIONS

    Net income                                                            $  33,768     $  37,647
    Items not requiring (not providing) cash:
       Depreciation                                                           8,397        11,916
       Amortization                                                           7,333         9,179
       Deferred income taxes and investment tax credits, net                (12,979)       (2,816)
       Allowance for equity funds used during construction                     (223)         (192)
    Gain on sale of investments and properties                                    -        (7,060)
    Recovery of power supply costs through asset sale deferred gain          (9,612)            -
    Changes in certain assets and liabilities:
       Accounts receivable                                                   27,331         4,869
       Other current assets                                                   1,676           547
       Inventories                                                              800         1,445
       Accounts payable                                                     (34,558)      (10,689)
       Accrued taxes and interest                                             9,927        12,181
       Miscellaneous current liabilities                                      7,909         2,695
    Changes in deferred balances and related carrying costs                  12,660          (734)
    Other, net                                                                3,150         3,755
                                                                            -------      --------
          Net Cash Provided by Operating Activities                          55,579        62,743
                                                                            -------      --------

INVESTING ACTIVITIES
       Construction expenditures                                            (17,615)      (10,505)
       Customer deposits for construction                                    16,940             -
       Proceeds from sale of investments and properties                           -         7,563
       Changes in accounts payable - investing activities                    (3,040)       (4,709)
                                                                            -------      --------
          Net Cash Used by Investing Activities                              (3,715)       (7,651)
                                                                            -------      --------

FINANCING ACTIVITIES
    Redemptions:
       Medium-term notes                                                    (30,000)            -
       Revolving Credit Agreement                                                 -       (40,000)
       Other long-term obligations                                             (734)            -
       Short-term obligations                                                     -        (5,000)
    Dividends:
       Common stock                                                         (11,222)       (7,028)
       Preferred stock                                                         (559)            -
                                                                            -------      --------

          Net Cash Used by Financing Activities                             (42,515)      (52,028)
                                                                            -------      --------
          Net Increase  in Cash                                               9,349         3,064
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                              112,872        22,628
                                                                            -------      --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                   $122,221     $  25,692
                                                                            =======      ========

For purposes of the  statement of cash flows,  the Company  considers all highly
liquid  instruments  purchased  having a maturity of three  months or less to be
cash equivalents.

The accompanying notes are an integral part of these financial statements
</TABLE>

<PAGE>

                                  CMP Group and
                           Central Maine Power Company

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies

     General  Description - CMP Group was organized effective September 1, 1998,
     at which  time all of the  shares of common  stock of  Central  Maine  were
     converted into an equal number of shares of common stock of CMP Group.  CMP
     Group  owns all of the  shares of  common  stock of  Central  Maine and the
     former non-utility subsidiaries of Central Maine (TeleSmart, MaineCom, CNEX
     and Union Water Power  Company) in addition to New England Gas  Development
     Corporation, a subsidiary organized in 1998.

     Central  Maine is  primarily  engaged in the business of  transmitting  and
     distributing  electric  energy  generated  by  others  for the  benefit  of
     customers in southern and central Maine. On March 1, 2000,  Central Maine's
     obligation to generate or otherwise  supply electric  energy  terminated as
     part of the restructuring of the electric utility industry in Maine, except
     as  directed  by the MPUC to  secure a supply  of  energy  for the  default
     standard offer for medium and large customers.

     CMP Group,  Energy East and EE Merger Corp., a Maine  corporation that is a
     wholly-owned  subsidiary of Energy East, entered into an Agreement and Plan
     of Merger,  dated as of June 14, 1999,  providing for a merger  transaction
     among  CMP  Group,  Energy  East  and  EE  Merger  Corp.  Refer  to  Note 2
     "Commitments and Contingencies."

     Financial  Statements  -  CMP  Group's  consolidated  financial  statements
     include  the  accounts  of CMP Group and its  wholly  owned and  controlled
     subsidiaries,   including  Central  Maine.   Central  Maine's  consolidated
     financial  statements  include its  accounts as well as those of its wholly
     owned and controlled  subsidiaries.  Central Maine's financial position and
     results  of  operations  account  for  substantially  all  of  CMP  Group's
     consolidated financial position and results of operations. All intercompany
     accounts  and  transactions   have  been  eliminated  in  the  consolidated
     financial statements. The preparation of financial statements in conformity
     with generally accepted  accounting  principles requires management to make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements,  and the  reported  amounts of revenues  and
     expenses  during the  reporting  period.  Actual  results could differ from
     those estimates.

     Also,  beginning  March 1, 2000,  Central  Maine became a billing agent for
     standard  offer  providers  and   competitive   energy   providers.   These
     transactions are not recorded as revenues,  but as Accounts  Receivable and
     Accounts Payable.

<PAGE>

     Supplemental  Cash Flow  Disclosure  - Cash paid for the three months ended
     March 31, 2000 and 1999:
                                                       (In Millions)
                                                   2000            1999
                                                   ----            ----
     CMP Group
         Interest, net of amounts capitalized     $ 4.5           $13.1
         Income taxes                              10.0            12.0

     Central Maine
         Interest, net of amounts capitalized     $ 4.5           $13.1
         Income Taxes                              10.0            12.0

     Stock-Based  Compensation  - Under CMP Group's  Long-Term  Incentive  Plan,
     stock options were granted in 1998 and 1999 with an exercise price equal to
     the fair market  value on the date of the grants.  They expire  seven years
     from their grant date. One third of the options vest  annually,  commencing
     on the first  anniversary  of the options  grant date.  Upon vesting  stock
     options  are  exercisable  during  periods of active  employment  or within
     thirty (30) days after termination of employment,  provided termination did
     not occur due to cause.  Performance shares are granted at the beginning of
     a  three-year  performance  cycle and are paid out in the form of CMP Group
     common stock at the end of the cycle,  based on  achievement of performance
     goals directly linked to increasing shareholder value. If the goals are not
     achieved at the end of the three-year  cycle,  the  performance  shares are
     forfeited. Performance shares were granted in 1997, 1998 and 1999. In 2000,
     phantom  shares were granted  which may be either  converted to Energy East
     shares,  or prorated  and paid out as cash  equivalents  by CMP Group.  All
     grants of performance  shares have a three-year cycle and are being accrued
     accordingly.  The  amount  expensed  in the  first  quarter  2000  for  all
     performance cycles was $903 thousand.

     Earnings per Share - Stock options and  performance  shares granted to date
     under  CMP  Group's   Long-Term   Incentive   Plan  resulted  in  potential
     incremental  shares of common stock  outstanding  for purposes of computing
     both basic and diluted  earnings per share for the three months ended March
     31,  2000 and 1999.  The  following  table  presents  the  calculations  of
     earnings per share:

                                                         Three Months
                                                        Ended March 31,
     (In thousands except per share amounts)      2000                1999
                                                  ----                ----

     Net income                                   $28,379             $33,257

     Basic average shares outstanding          32,442,552          32,442,552

     Dilutive effect of stock options             319,867             111,154
                                               ----------          ----------

     Diluted average shares outstanding        32,762,419          32,553,706

     Basic earnings per share                        $.87               $1.03

     Diluted earnings per share                      $.87               $1.02

     Reclassification  - Certain amounts from prior years  financial  statements
     have been reclassified to conform to the current year presentation.

     Impact of New Accounting Standards - In June 1998, the FASB issued SFAS No.
     133,  Accounting for Derivatives and Hedging  Activities.  The new standard
     applies to all entities and is effective for all fiscal  quarters of fiscal
     years beginning after June 15, 2000, with earlier adoption  encouraged.  It
     requires companies to record derivatives on the balance sheet at their fair
     value depending on the intended use of the derivative. The adoption of this
     standard did not have an impact on these financial statements.

2.   Commitments and Contingencies

     Proposed  Merger with  Energy  East - CMP Group,  Energy East and EE Merger
     Corp.,  a Maine  corporation  that is a  wholly-owned  subsidiary of Energy
     East,  entered into an Agreement  and Plan of Merger,  dated as of June 14,
     1999,  providing for a merger transaction among CMP Group,  Energy East and
     EE Merger Corp.  Energy East is an energy  delivery,  products and services
     holding  company  doing  business in New York,  Massachusetts,  Maine,  New
     Hampshire and New Jersey,  which  delivers  electricity  and natural gas to
     retail  customers  and  provides   electricity,   natural  gas  and  energy
     management  and other  services to retail and  wholesale  customers  in the
     Northeast.

     Pursuant to the merger agreement,  EE Merger Corp. will merge with and into
     CMP Group with CMP Group being the  surviving  corporation  and  becoming a
     wholly-owned  subsidiary  of Energy East.  We expect the merger,  which was
     unanimously  approved by the  respective  boards of directors of CMP Group,
     Energy  East  and EE  Merger  Corp.,  to  occur  shortly  after  all of the
     conditions  to the  consummation  of the merger,  including  the receipt of
     required regulatory approvals, are satisfied.

     Under the terms of the  merger  agreement,  each  outstanding  share of CMP
     Group  common  stock,  $5.00 par value per share,  other than any  treasury
     shares or shares  owned by Energy  East or any  subsidiary  of CMP Group or
     Energy East,  will be converted  into the right to receive  $29.50 in cash.
     Pursuant to the merger agreement,  approximately  $957 million in cash will
     be paid to holders of shares of CMP Group  common  stock,  with  additional
     payments  being made to holders of stock  options  and  performance  shares
     awarded under CMP Group's performance incentive plans.

     The merger is subject to certain  customary closing  conditions,  including
     without limitation the receipt of all necessary  governmental approvals and
     the making of all necessary  governmental filings. CMP Group's shareholders
     approved the merger at a special  meeting on October 7, 1999. The MPUC, the
     U.S.  Department  of  Justice,   the  Federal  Trade  Commission,   Federal
     Communications  Commission, the NRC, the Connecticut DPUC and the FERC have
     approved the merger.  Final regulatory approval is pending from the SEC. If
     the SEC approval is granted, we estimate that the merger could be completed
     around mid-2000.

     Permanent  Shutdown of Maine Yankee Plant - On August 6, 1997, the Board of
     Directors of Maine Yankee voted to  permanently  cease power  operations at
     its nuclear generating plant at Wiscasset, Maine (the "Plant") and to begin
     decommissioning   the  Plant.   The  Plant  had  experienced  a  number  of
     operational  and regulatory  problems and did not operate after December 6,
     1996. The decision to close the Plant  permanently was based on an economic
     analysis of the costs,  risks and  uncertainties  associated with operating
     the Plant compared to those associated with closing and decommissioning it.
     The Plant's operating license from the NRC was scheduled to expire in 2008.

     FERC Rate Case - On November 6, 1997,  Maine  Yankee  submitted to FERC for
     filing  certain   amendments  to  the  Power  Contracts  (the   "Amendatory
     Agreements")  and revised  rates to reflect  the  decision to shut down the
     Plant  and to  request  approval  of an  increase  in  the  decommissioning
     component of its formula  rates.  Maine  Yankee's  submittal also requested
     certain other rate changes,  including  recovery of unamortized  investment
     (including  fuel) and certain  changes to its billing  formula,  consistent
     with the  non-operating  status of the Plant.  By Order  dated  January 14,
     1998,  the FERC accepted  Maine  Yankee's new rates for filing,  subject to
     refund  after a  minimum  suspension  period,  and set  for  hearing  Maine
     Yankee's Amendatory  Agreements,  rates, and issues concerning the prudence
     of the Plant-shutdown decision that had been raised by intervenors.

     During 1998 and early 1999 the active  intervenors,  including among others
     the MPUC Staff,  the Maine Office of the Public Advocate  ("OPA"),  Central
     Maine and other  owners,  municipal  and  cooperative  purchasers  of Maine
     Yankee power (the "Secondary Purchasers"),  and a Maine environmental group
     (the "Settling Parties"),  engaged in extensive discovery and negotiations,
     which  resulted in the filing of a  settlement  agreement  with the FERC on
     January 19, 1999. A separately negotiated settlement filed with the FERC on
     February 5, 1999, resolved the issues raised by the Secondary Purchasers by
     limiting  the amounts  they will pay for  decommissioning  the Plant and by
     settling  other  points  of  contention   affecting   individual  Secondary
     Purchasers.  Both  settlements  were found to be in the public interest and
     approved  by the FERC on June 1,  1999.  The  settlements  constitute  full
     settlement  of  all  issues  raised  in  the  FERC  proceeding,   including
     decommissioning-cost  issues and issues  pertaining  to the prudence of the
     management,  operation,  and decision to permanently cease operation of the
     Plant.

     The primary  settlement  provided for Maine Yankee to collect $33.1 million
     in the  aggregate  annually,  effective  August  1,  1999,  including  both
     decommissioning  costs and costs related to Maine Yankee's  planned on-site
     independent spent fuel storage installation ("ISFSI"). The 1997 FERC filing
     had called for an aggregate  annual  collection  rate of $36.4  million for
     decommissioning  and the ISFSI,  based on a 1997 estimate.  Pursuant to the
     approved  settlement  the amount  collected  annually  has been  reduced to
     approximately $25.6 million, effective October 1, 1999, as a result of 1999
     Maine legislation  allowing Maine Yankee to (1) use for construction of the
     ISFSI funds held in trust under Maine law for spent-fuel disposal,  and (2)
     access  approximately  $6.8 million held by the State of Maine for eventual
     payment to the State of Texas  pursuant to a compact for low-level  nuclear
     waste  disposal,  the future of which is in question after rejection of the
     selected disposal site in west Texas by a Texas regulatory agency.

     The  settlement  also provides for recovery of the  unamortized  investment
     (including  fuel) in the  Plant,  together  with a return on equity of 6.50
     percent,  effective  January  15,  1998,  on equity  balances up to maximum
     allowed equity amounts, which resulted in a pro-rata refund of $9.3 million
     (including  tax  impacts) to the  sponsors on July 15,  1999.  The Settling
     Parties  also agreed not to contest  the  effectiveness  of the  Amendatory
     Agreements  submitted  to FERC as part of the original  filing,  subject to
     certain  limitations  including  the  right to  challenge  any  accelerated
     recovery  of  unamortized  investment  under  the  terms of the  Amendatory
     Agreements  after a required  informational  filing  with the FERC by Maine
     Yankee. In addition, the settlement contains incentives for Maine Yankee to
     achieve further savings in its  decommissioning and ISFSI-related costs and
     resolves issues concerning restoration and future use of the Plant site and
     environmental  matters of concern  to  certain  of the  intervenors  in the
     proceeding.

     As a separate part of the  settlement,  Central Maine,  the other two Maine
     utilities which own interests in Maine Yankee,  the MPUC Staff, and the OPA
     entered  into a further  agreement  resolving  retail rate issues and other
     issues specific to the Maine parties,  including those that had been raised
     concerning  the  prudence of the  operation  and shutdown of the Plant (the
     "Maine  Agreement").  Under the Maine Agreement Central Maine is recovering
     its Maine Yankee costs in  accordance  with its most recent rate order from
     the MPUC.

     Finally, the Maine Agreement requires Central Maine and the other two Maine
     utilities,  for the period from March 1, 2000, through December 1, 2004, to
     hold their Maine retail  ratepayers  harmless from the amounts by which the
     replacement power costs for Maine Yankee exceed the replacement power costs
     assumed in the report to the Maine Yankee Board of Directors that served as
     a basis for the Plant shutdown decision,  up to a maximum cumulative amount
     of $41 million. Central Maine's share of that amount would be $31.2 million
     for the period.  Based on the results of the two year  entitlement  auction
     already  completed,  the  Company  will not  incur any  liability  for this
     provision in 2000 and does not believe that it will incur any  liability in
     2001.

     CMP Group and Central Maine believe that the approved settlement, including
     the Maine  Agreement,  constitutes  a reasonable  resolution  of the issues
     raised  in  the  Maine  Yankee  FERC   proceeding,   which  has  eliminated
     significant uncertainties concerning CMP Group's and Central Maine's future
     financial performance.

     Termination of Decommissioning  Operations Contract - On May 4, 2000, Maine
     Yankee notified its decommissioning operations contractor,  Stone & Webster
     Engineering  Corporation  ("Stone & Webster"),  that it was terminating its
     decommissioning  operations contract pursuant to the terms of the contract.
     Subsequently,  Stone & Webster  notified Maine Yankee that it was disputing
     Maine Yankee's grounds for terminating the contract.  On May 8, 2000, Stone
     & Webster  announced  that it had  signed a letter of  intent  with  Jacobs
     Engineering  Group, Inc.  ("Jacobs"),  regarding a proposed  transaction in
     which Jacobs would acquire substantially all of Stone & Webster's assets in
     exchange for an immediate  $50 million  secured  credit  facility and other
     stated  consideration,  including cash and stock. Stone & Webster said that
     the  credit  facility  was  intended  to enable it to address  its  current
     liquidity  difficulties  and continue to operate its  businesses  until the
     asset sale is consummated.  In addition, Stone & Webster announced that, as
     a condition to the proposed  transactions  with Jacobs, it intended to seek
     bankruptcy  court  approval  of the asset  sale and credit  agreement,  and
     therefore intended to file a voluntary  petition for  reorganization  under
     Chapter 11 of the U.S.  Bankruptcy  Code after it signed a definitive  sale
     agreement with Jacobs, which it expected to occur later in May.

     Maine  Yankee  has  stated  that it  remains  committed  to the  successful
     completion of the decommissioning project and on May 10, 2000, entered into
     an interim  agreement with Stone & Webster for the purposes of avoiding the
     adverse  consequences of an abrupt or inefficient  demobilization  from the
     Plant site and allowing  decommissioning  work to continue through June 30,
     2000.  During that period Maine  Yankee will also  continue to evaluate all
     available long-term  alternatives for safely and efficiently completing the
     decommissioning  project.  However,  we  cannot  predict  at this time what
     effect  the  financial   difficulties  of  Stone  &  Webster,  the  interim
     agreement,  or any  subsequent  arrangement  with  Stone & Webster or a new
     general contractor will have on the cost or schedule of the decommissioning
     project.

     Legal and Environmental  Matters - CMP Group,  Central Maine and certain of
     its affiliates  are subject to regulation by federal and state  authorities
     with respect to air and water  quality,  the handling and disposal of toxic
     substances  and  hazardous  and solid  wastes,  and the handling and use of
     chemical products.  Electric utility companies generally use or generate in
     their operations a range of potentially  hazardous products and by-products
     that are the focus of such regulation.  CMP Group and Central Maine believe
     that their current  practices  and  operations  are in compliance  with all
     existing  environmental  laws except for such  non-compliance  as would not
     have a material adverse effect on their financial  position.  Central Maine
     reviews its overall  compliance  and  measures the  liability  quarterly by
     assessing a range of reasonably likely costs for each identified site using
     currently available information,  including existing technology,  presently
     enacted laws and regulations,  experience  gained at similar sites, and the
     probable level of involvement and financial  condition of other potentially
     responsible parties. These estimates include costs for site investigations,
     remediation, operation and maintenance, monitoring and site closure.

     New and changing  environmental  requirements could hinder the construction
     and/or modification of transmission and distribution lines, substations and
     other  facilities,  and could raise  operating  costs  significantly.  As a
     result, Central Maine may incur significant additional environmental costs,
     greater than amounts  reserved,  in  connection  with the  transmission  of
     electricity and the storage, transportation and disposal of by-products and
     wastes. Central Maine may also encounter  significantly  increased costs to
     remedy the environmental  effects of prior waste handling  activities.  The
     cumulative  long-term cost impact of increasingly  stringent  environmental
     requirements cannot accurately be estimated.

     Central  Maine has recorded a  liability,  based upon  currently  available
     information,   for  what  it  believes  are  the  estimated   environmental
     remediation  costs that it expects to incur for  identified  waste disposal
     sites. In most cases, additional future environmental cleanup costs are not
     reasonably  estimable  due to a number of  factors,  including  the unknown
     magnitude of possible  contamination,  the appropriate remediation methods,
     the possible  effects of future  legislation or regulation and the possible
     effects of technological changes. Central Maine cannot predict the schedule
     or scope of remediation  due to the regulatory  process and  involvement of
     non-governmental  parties.  At March 31, 2000,  the  liability  recorded by
     Central Maine for its estimated environmental remediation costs amounted to
     $2.8  million,  which  management  has  determined  to be the most probable
     amount within the range of $2.8 million to $13.4 million. Such costs may be
     higher if Central  Maine is found to be  responsible  for cleanup  costs at
     additional sites or identifiable possible outcomes change.

     Wyman No. 4  Arbitration  - By notice of claim  dated  June 24,  1999,  the
     non-operator  owners  of the  Wyman  No.  4  oil-fired  generating  unit in
     Yarmouth, Maine, which was approximately 60-percent owned by Central Maine,
     served  notice on Central  Maine that they  believe  they are entitled to a
     portion of the proceeds of the sale of Central Maine's interest in the unit
     as part of the April 1999 sale of its non-nuclear  generation assets to FPL
     Energy.  The claimants contend that certain sections of the joint ownership
     agreement  under  which  they  share in the  output  of the unit  require a
     pro-rata  distribution  to them of part of those  proceeds  as a result  of
     Central  Maine's  sale of its  interest  in the unit.  The joint  ownership
     agreement provides for arbitration of claims arising under the agreement.

     Central Maine believes that although the amount of the claim is substantial
     (up to $62  million),  the  claimants  have  suffered  no loss  and are not
     entitled to any part of the generation-asset  sale proceeds.  Central Maine
     intends to contest any such claim vigorously, but cannot predict the result
     of the arbitration proceeding.

     Millstone  Unit No. 3 Litigation  - In August 1997 Central  Maine and other
     minority  owners  of  Millstone  Unit  No.  3 filed  suit in  Massachusetts
     Superior Court against Northeast Utilities and its trustees,  and initiated
     an   arbitration   claim   against  two  of  its   subsidiaries,   alleging
     mismanagement  of the  unit by the  defendants.  The  minority  owners  are
     seeking  to   recover   their   additional   costs   resulting   from  such
     mismanagement, including their replacement power costs. Since the filing of
     the  suit  and  arbitration   claim,   the  parties  engaged  in  resolving
     preliminary issues and in extensive pre-hearing discovery.  The arbitration
     hearing began on November 16, 1999.

     On January 28, 2000, Central Maine entered into a settlement agreement with
     the  defendants  and  subsequently  dismissed  its lawsuit and  arbitration
     claim. The settlement is generally similar to earlier  settlements with the
     defendants  by two joint  owners which own in the  aggregate  approximately
     sixteen  percent of the unit.  It calls for the payment of $4.8  million to
     Central  Maine,  which has been  reflected  in 1999 net  income,  and other
     amounts  contingent upon future events, and would result in Central Maine's
     2.5-percent  interest  in the unit  being  included  in the  auction of the
     majority  interests and certain of the minority  interests in the Millstone
     units expected to be completed by 2001.

     Non-Utility  Generators  -  Central  Maine  has  entered  into a number  of
     long-term, non-cancelable contracts for the purchase of capacity and energy
     from non-utility generators ("NUG"). The agreements generally have terms of
     five to 17 years,  with  expiration  dates ranging from 2000 to 2016.  They
     require  Central  Maine to  purchase  the  energy at  specified  prices per
     kilowatt-hour, which are often above market prices.

     As  required  by the Maine  restructuring  legislation,  on July 30,  1999,
     Central Maine offered at auction its rights to the capacity and energy from
     its undivested  generation  assets and  generation-related  business.  Upon
     completion  of the auctions,  in December 1999 Central Maine  contracted to
     sell such rights with respect to its undivested  nuclear  generation assets
     (Vermont Yankee and Millstone Unit 3) and its NUG contract  entitlements to
     the  successful  bidder for a  two-year  period  commencing  March 1, 2000.
     Central Maine also  auctioned its  Hydro-Quebec  entitlement to a different
     buyer for the same period.  All of the auction results were approved by the
     MPUC.

     The  aggregate  above-market  costs  associated  with the NUG  contracts is
     estimated to be  approximately  $1 billion over the lives of the contracts,
     based on certain market price assumptions.  Those costs are being recovered
     in rates as stranded costs over the lives of the contracts  pursuant to the
     January 27, 2000, rate-case settlement.

     Natural Gas  Distribution - New England Gas Development  Corporation  ("New
     England  Gas"),  which is a wholly  owned  subsidiary  of CMP  Group,  held
     approximately a 16 percent  interest at March 31, 2000, in CMP Natural Gas,
     L.L.C.,  now called Maine Natural Gas, L.L.C.  ("Maine Natural Gas"). Maine
     Natural  Gas is a  joint  venture  of  New  England  Gas  and  Energy  East
     Enterprises,  a wholly owned  subsidiary of Energy East.  Maine Natural Gas
     was formed to construct,  own and operate a natural gas distribution system
     to serve  certain  areas of Maine that did not have gas service,  utilizing
     natural gas delivered to Maine through new interstate pipeline facilities.

     Maine Natural Gas began construction of its first local distribution system
     in Windham,  Maine,  in early 1999 and began serving its first  customer in
     May 1999.  On July 8, 1999,  Maine Natural Gas and Calpine  Corporation,  a
     California-based  independent  power  company,  announced  the signing of a
     20-year  contract  for Maine  Natural Gas to provide  natural gas  delivery
     service to Calpine's  proposed  540-megawatt  natural gas-fired power plant
     under  construction  in  Westbrook,  Maine.  Maine  Natural  Gas expects to
     commence service to the plant in the summer of 2000, after  construction of
     a two-mile  lateral  pipeline along an existing  Central Maine right of way
     that would  interconnect with the new interstate  pipeline  facilities.  On
     December 13, 1999, the MPUC authorized Maine Natural Gas to provide service
     to the Calpine plant,  as well as the unserved areas in the town of Gorham,
     and  on  February  18,  2000,  the  MPUC  approved  an  affiliated-interest
     transaction allowing Maine Natural Gas to construct the pipeline on Central
     Maine's transmission corridor.

     If the merger of CMP Group and Energy East is completed,  Maine Natural Gas
     will become a wholly owned subsidiary of Energy East  Enterprises,  and New
     England  Gas will cease to exist.  During  1999  Energy East also agreed to
     business   combinations  with  two  established  natural  gas  distribution
     companies  in  Connecticut  and one in  western  Massachusetts,  subject to
     closing conditions,  including  shareholder votes and regulatory approvals.
     One of the  Connecticut  acquisitions  was completed in February  2000. The
     other two transactions are awaiting SEC approval.

3.   Regulatory Matters and Electric-Utility Industry Restructuring

     Alternative  Rate Plan - On September 30, 1999,  Central Maine submitted to
     the MPUC a proposed  seven-year rate plan  ("ARP2000") to take effect after
     completion  of the merger  with  Energy  East.  The  formula for ARP2000 is
     substantially  similar  to that of the ARP,  being  based  on an  inflation
     index,  with  a  productivity  offset,   qualifying  facility  offset,  and
     provisions  for  earnings  sharing  and  flowthrough  and  mandated  items.
     However,  under  ARP 2000 the  one-percent  productivity  offset of the ARP
     would  escalate in annual  increments of 0.25 percent from 1.00 percent for
     the 2001 price change to 1.75  percent in 2004 to 2007.  The purpose of the
     proposed  escalation is to assure that Central  Maine's  customers  benefit
     from the  increased  savings  expected  from the  Energy  East  merger.  In
     addition,  in the  mandated-costs  exclusion in ARP2000 only mandated costs
     over  $50,000  would be  recognized  and only the excess over $3 million of
     accumulated  mandated cost would be recoverable,  not the entire $3 million
     non-cumulative cost recoverable under the 1995-1999 ARP. The rate of return
     on  equity  of 10.5  percent  established  by the  MPUC for  Central  Maine
     effective  March 1,  2000,  would  be the  basis  for the  earnings-sharing
     bandwidth,  and not the 11.5 percent  under the ARP.  ARP2000 is subject to
     MPUC approval.

     Maine Restructuring Legislation - The Maine Legislature enacted legislation
     in 1997 to restructure  the electric  utility  industry in Maine  effective
     March 1, 2000. The principal  restructuring  provisions of the  legislation
     provided for customers to have direct retail access to generation  services
     and for deregulation of competitive electric providers, commencing March 1,
     2000,  with  transmission-and-distribution  companies such as Central Maine
     continuing  to be  regulated  by the  MPUC.  By that  date,  investor-owned
     utilities   were   required   to   divest   all   generation   assets   and
     generation-related  business  activities,  with two major  exceptions:  (1)
     non-utility  generator  contracts with qualifying  facilities and contracts
     with demand-side  management or conservation  providers,  brokers or hosts,
     and (2) ownership  interests in nuclear power  plants.  As discussed  below
     under "Sale of Generation  Assets," Central Maine completed the sale of its
     non-nuclear generating assets on April 7, 1999.

     The legislation also required investor-owned utilities to sell their rights
     to the  capacity  and energy from all  undivested  generation  assets after
     February   29,  2000,   including   nuclear   generation   assets  and  the
     purchased-power contracts that had not previously been divested pursuant to
     the legislation.  On July 30, 1999, Central Maine offered its rights to the
     capacity   and   energy   from  its   undivested   generation   assets  and
     generation-related  business to  prospective  bidders and in December  1999
     contracted  to sell such  rights  with  respect to its  undivested  nuclear
     generation  assets  (Vermont  Yankee  and  Millstone  Unit  3) and  its NUG
     contract entitlements for a two-year period commencing March 1, 2000.

     As a  transmission-and-distribution  utility,  Central  Maine is prohibited
     from selling electric energy to retail customers, except as may be directed
     by the MPUC. Any competitive  electricity  provider affiliated with Central
     Maine would be allowed to sell electricity  outside Central Maine's service
     territory  without  limitation  as to amount,  but within  Central  Maine's
     service territory the affiliate would be limited to providing not more than
     33 percent of the total  kilowatt-hours  sold with Central  Maine's service
     territory, as determined by the MPUC. CMP Group has determined that it does
     not intend to create such an affiliate.

     MPUC Proceeding on Stranded Costs, Revenue Requirements,  and Rate Design -
     By order dated March 19, 1999,  the MPUC  completed  the first phase of its
     proceeding  contemplated by Maine's restructuring  legislation to establish
     the recoverable  amount and timing of Central Maine's  stranded costs,  its
     revenue  requirements  and the design of its rates effective March 1, 2000.
     In its Phase I order the MPUC  decided the  "principles"  by which it would
     set  Central  Maine's  transmission-and-distribution  rates,  but  deferred
     actually  calculating the rates until later in the proceeding  because some
     of the necessary information was not yet available.

     With respect to stranded  costs,  the MPUC  indicated that it would set the
     amount  of  recoverable  stranded  costs  for  Central  Maine  later in the
     proceeding.   The  restructuring  statute  requires  the  MPUC  to  provide
     transmission-and-distribution utilities a reasonable opportunity to recover
     such costs that is equivalent to the utility's opportunity to recover those
     costs prior to the  commencement  of retail access.  The MPUC also reviewed
     the  prescribed  methodology  for  determining  the  amount of a  utility's
     stranded  costs,  including  among other factors the  application of excess
     value from Central Maine's  divested  generation  assets to offset stranded
     costs.

     In the area of revenue  requirements,  the Phase I order did not  establish
     definitive  amounts,  but  did  contain  the  MPUC's  conclusion  that  the
     appropriate    cost   of   common   equity   for   Central   Maine   as   a
     transmission-and-distribution   company   was   10.50   percent,   with   a
     common-equity  component of 47 percent.  In dealing  with rate design,  the
     MPUC again limited itself  primarily to establishing  principles that would
     guide it in designing Central Maine's rates effective March 1, 2000.

     On July 1, 1999,  Central  Maine filed its Phase II case with the MPUC.  In
     that filing Central Maine updated  certain  test-year data to reflect known
     and  measurable  changes to its revenue  requirement,  updated its stranded
     cost  estimate to reflect  actual  data from the April 1999  closing of its
     generation-asset sale, and proposed its rate design based on the principles
     enunciated  in the  Phase  I  order.  Some  of the  information  needed  to
     establish rates was still incomplete in that filing, however, since neither
     the  auction  of the  output of  Central  Maine's  non-divested  generation
     resources  nor the bid  process  for  "standard-offer"  service  (for those
     customers  who do not  select  a  competitive  energy  supplier)  had  been
     completed.  In addition,  several  issues  raised by the Phase I MPUC order
     remained  unresolved,  including,  among others, (i) whether the MPUC could
     require the  unamortized  investment tax credits and excess deferred income
     taxes associated with the sale of Central Maine's  generation  assets to be
     flowed  through to  ratepayers,  and (ii) the rate treatment of the gain on
     the sale of Union  Water's  generation-related  assets to FPL and  employee
     transition costs resulting from the generation-asset sale.

     In an order dated  December 3, 1999, in a separate but related  proceeding,
     the MPUC  approved  Central  Maine's plan for the sale of the output of its
     non-divested  generation  assets. In another related  proceeding,  by order
     dated October 25, 1999, the MPUC accepted a competitive  energy  supplier's
     bid to provide  standard-offer  service to Central Maine's  residential and
     small commercial customers who did not select a competitive energy supplier
     after  March 1,  2000.  In the same  order  the  MPUC  rejected  all of the
     standard-offer  bids for Central  Maine's  medium and large  commercial and
     industrial  customers  and sought a second round of bids. In the December 3
     order the MPUC rejected all of the second round of standard-offer  bids for
     Central  Maine's  medium and large  classes and ordered that Central  Maine
     arrange such service for those classes.

     On January 19, 2000, the MPUC issued its Phase II order determining Central
     Maine's  revenue requirement as  a  transmission-and-distribution  utility,
     effective  March 1,  2000.  In the order the MPUC disallowed  approximately
     $8 million of  the approximately $12 million revenue increase  requested in
     Central  Maine's  Phase II filing, which  had been  based on  certain known
     and measurable changes to its revenue requirement.

     A negotiated  settlement approved by the MPUC on January 27, 2000, resolved
     the major issues remaining outstanding in the final phase of the ratemaking
     proceeding.  The settlement confirmed that the $18.2 million of unamortized
     investment tax credits and excess  deferred income taxes related to Central
     Maine's  generation-asset  sale would flow through to shareholders pursuant
     to the  normalization  rules of the  Internal  Revenue  Code.  In addition,
     Central Maine agreed not to seek judicial  review of an August 2, 1999 MPUC
     order  regarding  the  treatment  of gains  from  sales of  easements  that
     required  Central Maine to recognize 10 percent of the gain  currently with
     the remaining 90 percent being amortized over 5 years,  effective as of the
     dates of the 1998 and 1999 sale transactions. Central Maine also agreed not
     to seek reconsideration of other  cost-of-service  updates in the rate case
     or to challenge a $4.7 million  disallowance of employee  transition costs,
     and to  withdraw  its  appeal  of the rate  treatment  of the gain on Union
     Water's generation-related assets.

     The  settlement  also  allowed  Central  Maine to charge off $88 million on
     March  1,  2000,  representing  its  entire  remaining  investment  in  the
     Millstone 3 nuclear unit in Connecticut,  against the regulatory Asset Sale
     Gain  Account  created  in  the  ratemaking  proceeding  to  recognize  the
     above-book  value realized through Central Maine's  generation-asset  sale.
     This provision reflected a recent resolution of Central Maine's arbitration
     and  litigation  claims  against  the  lead  owners  of  the  jointly-owned
     Millstone 3 unit, in which Central Maine owns a 2.5-percent interest.

     As part of the settlement  Central Maine also agreed to a one-time earnings
     cap for 1999. Earnings above the cap were deferred in 1999 and will be used
     to offset  rate  increases  that would  otherwise  be  required to mitigate
     stranded   costs  and  increases  in  operating   expenses   through  2001.
     Amortization  from this  account  for the first  quarter  of 2000  provided
     recovery of expenses in the amount of $625 thousand.

     Finally,  the  rate  settlement  established  Central  Maine's  rates  as a
     transmission-and-distribution  utility  effective March 1, 2000. A separate
     order fixed the standard-offer  prices for Central Maine's medium and large
     commercial and industrial  customers at levels  intended to reflect current
     market pricing and to avoid under-collection of Central Maine's costs.

     The asset-sale  gain account was drawn down on March 1 by CMP's writing off
     $161.8 million of deferred regulatory assets relating to  non-utility-power
     contract  restructurings and other assets,  $65.2 million of CMP's interest
     in the Millstone  Unit 3 power plant in  Connecticut,  and $75.4 million in
     regulatory assets related to deferred taxes.

     Sale of Generation  Assets - On April 7, 1999,  Central Maine completed the
     sale of all of its hydro,  fossil and biomass  power plants with a combined
     generating capacity of 1,185 megawatts for $846 million in cash,  including
     approximately  $18  million for assets of Union  Water,  to  affiliates  of
     Florida-based  FPL  Group.  The  related  book  value for these  assets was
     approximately  $217.3 million.  In addition,  as part of its agreement with
     FPL Group,  Central Maine entered into energy buy-back agreements to assist
     in fulfilling its obligation to supply its customers with power until March
     1, 2000.  Subsequently,  an agreement  was reached to sell related  storage
     facilities  to FPL Group for an  additional  $4.6 million ($1.5 million for
     the assets and $3.1 million estimated for lease revenue associated with the
     properties that Central Maine  retained),  including $2.0 million for Union
     Water  assets.  The related  book value of these  assets was  approximately
     $11.4 million.

     As required by the MPUC,  Central Maine recorded a pre-tax deferred gain of
     $518.8 million net of selling costs and certain  non-normalized  income tax
     impacts from the sale of  generation  assets by  establishing  a regulatory
     liability in 1999, which eliminated most income recognition.  Central Maine
     did  record  an  income  impact  from the  sale  amounting  to $18  million
     associated  with the  related  unamortized  investment  credits  and excess
     deferred tax  reserves as required by the IRS  regulations.  Central  Maine
     also recorded  curtailment and special termination deferred charges of $4.1
     million  associated  with  pension  and  postretirement  benefit  costs  of
     employees  leaving  the company as a result of the  generation-asset  sale.
     These  deferred  charges  are  being  amortized  over a  three-year  period
     beginning March 1, 2000, as required by the MPUC. The regulatory  liability
     for the asset sale gain, including interest, amounted to approximately $548
     million at  December  31,  1999,  and is being  amortized  over an 8.5 year
     period  beginning  March 1, 2000. The  amortization  will vary from year to
     year. Amortization for the first quarter of 2000 was $2 million.

     As  required  by the Maine  restructuring  legislation,  on July 30,  1999,
     Central Maine offered at auction its rights to the capacity and energy from
     its undivested  generation  assets and  generation-related  business.  Upon
     completion  of the auctions,  in December 1999 Central Maine  contracted to
     sell such rights with respect to its undivested  nuclear  generation assets
     (Vermont Yankee and Millstone Unit 3) and its NUG contract  entitlements to
     the  successful  bidder for a  two-year  period  commencing  March 1, 2000.
     Central Maine also  auctioned its  Hydro-Quebec  entitlement to a different
     buyer for the same period.  All of the auction results were approved by the
     MPUC.

     Meeting the Requirements of SFAS No. 71

     Central  Maine  continues  to meet  the  requirements  of SFAS  No.  71 for
     transmission and distribution. The standard provides specialized accounting
     for regulated  enterprises,  which  requires  recognition  of  "regulatory"
     assets  and  liabilities  that  enterprises  in general  could not  record.
     Examples of regulatory assets include deferred income taxes associated with
     previously  flowed  through  items,  NUG buyout costs,  losses on abandoned
     plants,  deferral  of  postemployment  benefit  costs,  and  losses on debt
     refinancing.  If an entity no longer meets the requirements of SFAS No. 71,
     then regulatory assets and liabilities must be written off.

     The ARP  provided  incentive-based  rates  intended  to recover the cost of
     service plus a rate of return on Central Maine's investment together with a
     sharing of the costs or earnings  between  ratepayers and the  shareholders
     should the earnings be less than or exceed a target rate of return. Central
     Maine has received  recognition from the MPUC that the rates implemented as
     a result of the ARP continue to provide specific recovery of costs deferred
     in prior periods.

     The 1997 legislation enacted in Maine providing for industry  restructuring
     addressed  the issue of cost recovery of  regulatory  assets  stranded as a
     result of industry  restructuring.  Specifically,  the legislation requires
     the MPUC, when retail access begins, to provide a "reasonable  opportunity"
     for  the   recovery   of   stranded   costs   through   the  rates  of  the
     transmission-and-distribution   company,   comparable   to  the   utility's
     opportunity to recover stranded costs before the  implementation  of retail
     access under the legislation.  As provided for in EITF 97-4,  "Deregulation
     of the  Pricing of  Electricity,"  Central  Maine will  continue  to record
     regulatory assets in a manner consistent with SFAS No. 71 as long as future
     recovery is probable,  since the MPUC stranded costs,  revenue requirements
     and rate design  orders  provide  for the  recovery  of  regulatory  assets
     including     stranded     costs     through     the     rates    of    the
     transmission-and-distribution  company. Central Maine discontinued SFAS No.
     71 for any remaining  generation  segment of its business in 1999, based on
     current generally accepted accounting principles.  Management believes that
     SFAS  No.  71 will  continue  to apply to the  regulated  distribution  and
     transmission  segments of its business.  Future  regulatory  rules or other
     circumstances   could  cause  the   application   of  SFAS  No.  71  to  be
     discontinued,  which could  result in a non-cash  write-off  of  previously
     established regulatory assets.

4.   Income Taxes

     The  effective  tax rates of 74 percent  for CMP Group and 71  percent  for
     Central  Maine are  significantly  higher than the  statutory  rate of 40.8
     percent for the first quarter 2000. This difference is due primarily to the
     write-off of $161.8  million in  regulatory  assets and the  investment  in
     Millstone  Unit 3 of  $65.2  million  as  ordered  in the  MPUC  rate  case
     settlement. Past regulatory treatment of the tax timing differences related
     to these assets created a  non-provided  deferred tax that was reflected on
     the balance sheet.  This write-off  created a deferred tax expense of $75.4
     million.  The MPUC  allows an  offsetting  amount to be  included  in other
     income through the  amortization  of the asset sale gain account.  Although
     the effect to net income was zero, the effective tax rate was increased.

     Concurrently,  the  effective  tax rate was  decreased  by the  gross-up of
     carrying  costs on the deferred costs  associated  with the asset sale gain
     account,   the  1998  ice  storm,   and  hazardous  waste  clean-up  costs.
     Previously,  these  carrying  costs were  recorded  at an  after-tax  rate.
     Deferred tax expense was decreased by a net amount of $9.5  million,  which
     was offset in other interest expense and other, net. Deferred taxes will be
     provided on all the tax timing differences created by the carrying costs in
     the future.

     Additionally,  Central Maine flowed through all unamortized  investment tax
     credits and excess tax reserves of $4 million  associated  with the sale of
     Cape Station and the write-off of Millstone Unit 3. This is consistent with
     a Private Letter Ruling obtained from the IRS by the Company at the request
     of the MPUC and affirmed by the MPUC in its approval of the negotiated rate
     case settlement on January 27, 2000.

5.   Transactions with Affiliated Companies

     Central Maine provides certain services to CMP Group and its  subsidiaries,
     including  administrative support services and pension and employee benefit
     arrangements.  Charges related to those services have been determined based
     on a  combination  of direct  charges and  allocations  designed to recover
     Central  Maine's  cost.  These  assessments  are  reflected as an offset to
     Central  Maine's  expenses and totaled  approximately  $1.1 million for the
     quarter ended March 31, 2000.

     CMP Group provides certain managerial services to its subsidiaries. Charges
     related to those  services have been  determined  based on a combination of
     direct  charges and  allocations  in order to recover the majority of their
     expenses.  These  assessments  are  reflected  as an offset to CMP  Group's
     expenses and totaled approximately $1.7 million for the quarter ended March
     31, 2000.

     In  addition,  a  subsidiary  of CMP Group  provides  certain  real  estate
     services  charged  to  Central  Maine  at  cost  and  utility  locator  and
     construction  services based on a contracted rate. These expenses  amounted
     to $0.7 million for the quarter ended March 31, 2000.

     As of March 31, 2000, Central Maine's accounts receivable and accounts
     payable included the following:
                                            (Dollars in thousands)

                                      Accounts                  Accounts
                                     Receivable                  Payable

        CMP Group                     $2,004                      $5,403
        CNEX                              25                          51
        MaineCom                         215                         -
        Telesmart                         27                         121
        Union Water                      303                         393
        New England Gas                    3                         -
                                       -----                       -----
                                      $2,577                      $5,968
                                       =====                       =====

Item 2:  Management's Discussion and Analysis of Financial Condition and Results
         of Operations of CMP Group and Central Maine Power Company

This is a combined Quarterly Report on Form 10-Q of CMP Group and Central Maine.
Therefore,  our Management's  Discussion and Analysis of Financial Condition and
Results of Operations  (MD&A) applies to both CMP Group and Central  Maine.  CMP
Group's consolidated  financial statements include the accounts of CMP Group and
its  wholly  owned  and  controlled   subsidiaries,   including   Central  Maine
(collectively,  the CMP Group System).  Central Maine's  consolidated  financial
statements  include  its  accounts  as well as those  of its  wholly  owned  and
controlled  subsidiaries.  The  MD&A  should  be read in  conjunction  with  the
consolidated financial statements included herein.

Note re Forward-Looking Statements

This  Report  on  Form  10-Q  contains  forecast   information  items  that  are
"forward-looking  statements"  as defined in the Private  Securities  Litigation
Reform  Act  of  1995.   Such  statements  are  subject  to  certain  risks  and
uncertainties  which could cause actual results to differ  materially from those
projected.   Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking  statements,  which speak only as of the date hereof.  CMP Group
and Central Maine undertake no obligation to republish  revised  forward-looking
statements  to  reflect  events or  circumstances  after  the date  hereof or to
reflect the occurrence of unanticipated  events.  Readers are urged to carefully
review and consider the factors in the succeeding paragraph.

Factors  that could cause actual  results to differ  materially  include,  among
other  matters,  the results of the pending  merger with Energy  East,  electric
utility  industry  restructuring,   including  the  ongoing  state  and  federal
activities  that will determine  Central Maine's ability to recover its stranded
costs and the cost of upgrades of  transmission  facilities to  accommodate  new
merchant generating plants; future economic conditions,  earnings-retention  and
dividend-payout  policies;  developments  in the  legislative,  regulatory,  and
competitive   environments  in  which  CMP  Group  and  Central  Maine  operate;
investments in unregulated businesses; and other circumstances that could affect
anticipated  revenues and costs, such as unscheduled  maintenance and repairs of
transmission and distribution facilities,  unanticipated  environmental cleanups
and compliance with new or  re-interpreted  laws and  regulations  affecting the
operation of the business.

Formation of Holding Company and Proposed Merger

CMP Group is a holding company organized effective September 1, 1998, which owns
all of the common stock of Central Maine and the former non-utility subsidiaries
of Central Maine.  As part of the  reorganization,  all of the shares of Central
Maine's  common stock were converted into an equal number of shares of CMP Group
common stock,  which are listed on the New York Stock  Exchange under the symbol
CTP. The reorganization was approved by Central Maine's  shareholders on May 21,
1998,  and on  various  dates  in  1998 by the  appropriate  state  and  federal
regulatory agencies.

On  June  14,  1999,  CMP  Group,  Energy  East  and EE  Merger  Corp.,  a Maine
corporation  that is a wholly-owned  subsidiary of Energy East,  entered into an
Agreement and Plan of Merger,  dated as of June 14, 1999, providing for a merger
transaction  among CMP Group,  Energy East and EE Merger Corp. Energy East is an
energy  delivery,  products and services  holding  company doing business in New
York,  Massachusetts,  Maine,  New  Hampshire  and New  Jersey,  which  delivers
electricity  and  natural  gas to retail  customers  and  provides  electricity,
natural gas and energy  management  and other  services to retail and  wholesale
customers in the Northeast.

Pursuant to the merger  agreement,  EE Merger Corp. will merge with and into CMP
Group with CMP Group being the surviving corporation and becoming a wholly-owned
subsidiary of Energy East. We expect the merger,  which was unanimously approved
by the  respective  boards of directors of CMP Group,  Energy East and EE Merger
Corp.,  to occur shortly after all of the conditions to the  consummation of the
merger, including the receipt of required regulatory approvals, are satisfied.

Under the terms of the merger  agreement,  each  outstanding  share of CMP Group
common  stock,  $5.00 par value per  share,  other than any  treasury  shares or
shares owned by Energy East or any subsidiary of CMP Group or Energy East,  will
be converted  into the right to receive  $29.50 in cash.  Pursuant to the merger
agreement,  approximately $957 million in cash will be paid to holders of shares
of CMP Group Common Stock,  with  additional  payments  being made to holders of
stock  options and  performance  shares  awarded  under CMP Group's  performance
incentive plans.

The merger is subject to certain customary closing conditions, including without
limitation the receipt of all necessary governmental approvals and the making of
all necessary governmental filings. CMP Group's shareholders approved the merger
at a special  meeting  on  October 7, 1999.  The MPUC,  the U.S.  Department  of
Justice, the Federal Trade Commission,  Federal Communications  Commission,  the
NRC,  the  Connecticut  DPUC and the FERC have  approved  the merger.  The final
regulatory  approval is pending from the SEC. If the SEC approval is granted, we
estimate that the merger could be completed around mid-2000.

<PAGE>

Operating Results
                           CMP
                          Group                      Central Maine
                          -----                      -------------
                                 (dollars in millions)
Net income
 Three months ended:
     March 31, 2000      $28.4        $.87/share       $33.8
     March 31, 1999       33.3       $1.03/share        37.6
                          ----                          ----
     Decrease            $(4.9)                        $(3.8)

Earnings applicable to
common stock
 Three months ended:
     March 31, 2000        N/A                         $33.2      $1.06/share
     March 31, 1999        N/A                          36.7      $1.18/share
                                                        ----
     Decrease                                         $ (3.5)

Effective  March 1, 2000,  Central Maine no longer sells electric  energy to its
residential  and small business  customers.  Central Maine is the default energy
provider for medium and large  customers  who choose not to select a competitive
energy provider.  Central Maine provides  transmission and distribution services
for  electricity for all its customers,  the rates for which are tariffed.  As a
result of this  change,  when  comparing  year 2000 results post March 1, to the
same period in 1999,  revenues and related  energy costs are lower.  The primary
reason that  operating  income for the quarter  ending March 2000 is $12 million
lower  than the same  period  in 1999 is due to the  restructuring  of  services
associated with the  deregulation of energy services.  Partially  offsetting the
$12 million  operating  income  decrease is the impact of a one-time tax benefit
related  to the  increase  in the  depreciation  reserve  of  Millstone  Unit 3.
Unamortized  investment  tax credits and excess tax  reserves of $4 million were
flowed through to net income.

Revenues  also  decreased as a result of a price  reduction  effective  March 1,
2000, that is expected to produce  total-bill  savings  averaging 10 percent for
residential and small business customers.

Service  Area Kwh Sales - Central  Maine's  service  area  sales of  electricity
totaled approximately 2.35 billion  kilowatt-hours in the first quarter of 2000,
up 1.7  percent  from the 2.31  billion  kilowatt-hour  level of a year ago,  as
follows:

                 Service Area Kilowatt-hour Sales (Millions of KWHs)
                             Period Ended March 31,

                                                    Three Months
                                       ---------------------------------------
                                       2000             1999          % Change
                                       ----             ----          --------

    Residential                        820.6             790.2            3.8%
    Commercial                         689.3             644.2            7.0
    Industrial                         833.4             831.0             .3
    Other                                8.8              47.4          (81.4)
                                     -------           -------
                                     2,352.1           2,312.8            1.7%
                                     =======           =======

Kilowatt-hour  sales for 1999 have been adjusted to reflect a change in unbilled
kwh sales to be consistent with the 2000 presentation.

The changes in service area kilowatt-hour sales reflect the following:

     Kilowatt-hour  sales to residential  customers  increased by 3.8 percent in
     the first quarter of 2000 compared to 1999. The increase is attributable to
     customer growth. Warmer temperatures in 2000 had a negative impact on sales
     to the residential and commercial sectors, to slightly offset the increase.

     Commercial  kilowatt-hour  sales  increased  by 7.0  percent  in the  first
     quarter of 2000 compared to 1999.  The increased  sales in all sectors were
     due to a strong economy which  resulted in an increase in  nonmanufacturing
     jobs of 3.5 percent since February  1999.  The retail and service  sectors,
     which together  comprise  approximately 62 percent of commercial kwh sales,
     experienced 4 percent and 5.6 percent sales increases, respectively.

     Industrial  kilowatt-hour  sales  increased  by 0.3  percent  in the  first
     quarter of 2000  compared to 1999.  Decreased  sales to the paper  industry
     (2.6  million  kwh) were more than offset by positive  sales  growth  (19.2
     million  kwh)   experienced  in  the  "other   industrial"   sectors.   The
     pulp-and-paper sector of the industrial class accounts for approximately 53
     percent of the industrial sales category.  The primary factors contributing
     to the 5.1 percent  increase in sectors other than pulp and paper  included
     growth in food processing,  by 20 percent,  lumber and wood, by 15 percent,
     printing and publishing,  by 20 percent,  and electrical  machinery,  by 19
     percent.

     Other  service  area  sales  decreased  81.4  percent  from 1999 due to the
     termination  of  wholesale  contracts  as a result  of the sale of  Central
     Maine's generating assets in 1999.

Operating Expenses

Central Maine's fuel used for company generation decreased by approximately $8.7
million in the first quarter of 2000 compared to 1999 due to the sale of Central
Maine's generating assets in April 1999.

Central Maine's purchased  power-energy  expense increased by $16 million in the
first  quarter of 2000,  compared  to 1999.  The  increase is due  primarily  to
purchases from FPL and higher sales volume.

Central Maine's purchased  power-capacity  expense increased $5.6 million in the
first quarter compared to 1999. Capacity charges from FPL were $5.9 million, and
$1.4 million from the standard offer energy  provider.  Lower operating costs at
Maine Yankee offset the increase by $1.5 million.

Central Maine's  maintenance expense decreased $1.8 million for the three months
ended March 31, 2000  compared to 1999.  This  decrease was due primarily to the
asset sale.  Amortization of ice storm costs of $1 million  partially offset the
decrease.

Central Maine's other operations  expense remained flat year to year.  Decreases
as a result of the  generation  asset sale were offset by  increased  ISO costs,
demand-side management costs, and uncollectible accounts.

Federal and state income taxes fluctuate with the level of pre-tax  earnings and
the  regulatory  treatment of taxes by the MPUC.  This expense  increased by $58
million for the quarter ended March 31, 2000  compared to 1999.  The variance is
attributable to the treatment of $75.4 million of non-provided deferred taxes on
regulatory  assets  written  off on  March  1,  2000 as part  of the  rate  case
settlement.  This was directly offset in other income,  and had no effect on net
income. Tax expense was decreased by the gross-up of carrying costs to a pre-tax
rate. See Note 4, "Income Taxes."

Other Income and Expense

Equity in Earnings  of  Associated  Companies  for CMP Group  decreased  by $0.3
million in the first quarter of 2000 compared to 1999.  Amortization of gains on
sale of easements related to MEPCO increased equity earnings by $0.7 million. As
part of the January 2000 rate case  settlement,  Central  Maine  deferred  these
gains and is amortizing them over five years.  NEON, which is a 38-percent owned
indirect  subsidiary  of  MaineCom,  had  losses $1 million  greater  than first
quarter last year.

Interest income  increased $1.5 million due to investments  from proceeds of the
generation-asset sale.

Other income,  net  increased  $4.5 million from 1999.  The increase  relates to
amortization  of the asset sale gain account of $2.5  million.  The remainder of
the increase is carrying  costs on deferred costs  associated  with the 1998 ice
storm, hazardous waste clean-up, and demand-side management.

Other income  included  $75.4  million of income  associated  with  non-provided
deferred  taxes  on  assets  written  off  per  the  rate  case  settlement.   A
corresponding  charge to income tax expense resulted in no impact to net income.
See Note 4, "Income Taxes," for more details.

The decrease in gain on sale of  investments  and properties is due primarily to
the sale of transmission line right-of-way  access to a gas-pipeline  project in
1999.

Other Interest Expense  increased by $17.8 million during the first three months
of 2000 as compared to 1999.  The  increase  was due to the  recording  of $13.8
million to gross-up  carrying  costs on the asset sale gain account to a pre-tax
level with an  offsetting  decrease in deferred  tax  expense,  and another $3.7
million of additional carrying costs for the quarter.

For the quarter  ended March 31, 2000,  Central  Maine  reduced  preferred-stock
dividends  by $360  thousand  as a result of an  earlier  redemption  of 180,000
shares of 7.99% Series Preferred Stock in 1999.

<PAGE>

Liquidity and Capital Resources

From 1995 through 1999 increases in Central Maine's retail rates were limited by
Central Maine's ARP. On September 30, 1999,  Central Maine submitted to the MPUC
a proposed seven year rate plan ("ARP 2000") to take effect after the completion
of the merger with Energy East. A price  decrease took effect March 1, 2000, for
most residential and small business customers.  For a discussion of the proposed
new rate  plan and the  price  decrease,  see Note 3,  "Regulatory  Matters  and
Electric-Utility Industry Restructuring" - "Alternative Rate Plan."

Approximately  $30.8 million and $36.3 million of cash were provided  during the
three  months  ended  March  31,  2000,   for  CMP  Group  and  Central   Maine,
respectively,  from net income before  non-cash items,  primarily  depreciation,
amortization and deferred income taxes.  During that period  approximately $37.6
million and $28.9 million of cash were used for  fluctuations  in certain assets
and liabilities  and from other  operating  activities for CMP Group and Central
Maine,  respectively.  In addition $9.6 million of  incremental  power costs was
recovered through amortization that had been deferred at the time of the sale of
generation assets.

CMP Group's investing activities utilized approximately $5.3 million of cash for
the three months ended March 31, 2000.  Central Maine  received $16.9 million in
deposits from customers  relating to pending  merchant plant  activity.  Central
Maine  could be  required  in the future to refund  some or all of the  customer
deposits  associated  with merchant  plant upon a decision by FERC regarding the
responsibility for funding associated network upgrades.  In order to accommodate
existing and future loads on its electric  system  Central Maine is engaged in a
continuing  construction  program.  Central Maine's plans for  improvements  and
expansions,  its load forecasts and its power-supply sources are under a process
of  continuing  review.   Actual  construction   expenditures  depend  upon  the
availability of capital and other  resources,  load forecasts,  customer growth,
the number of  merchant  plants  constructed  in Central  Maine  territory,  and
general business conditions. The ultimate nature, timing and amount of financing
for   Central   Maine's   total   construction   programs,    refinancing,   and
energy-management  capital  requirements  will be  determined in light of market
conditions, earnings and other relevant factors.

During the three months ended March 31, 2000, CMP Group paid dividends on common
stock of $7.3 million,  while  preferred-stock  dividends  paid by Central Maine
utilized $0.6 million of cash.

Central Maine's Articles of Incorporation  limit certain unsecured  indebtedness
that may be outstanding to 20 percent of capitalization, as defined, without the
consent of the holders of Central Maine's preferred stock; 20 percent of defined
capitalization  amounted  to  $124  million  as of  March  31,  2000.  Unsecured
indebtedness,  as defined, amounted to $57 million as of March 31, 2000. Central
Maine's $500 million  medium-term  note program,  having received the consent of
Central  Maine's  preferred  stockholders  in  May  1997,  is  not  included  in
"unsecured  indebtedness"  for purposes of the  20-percent  limitation.  Central
Maine had $40 million of medium-term notes outstanding at March 31, 2000.

On December  31,  1999,  Central  Maine  entered  into a $75 million  three-year
secured  revolving-credit  facility with three banks,  with The Bank of New York
acting as  administrative  agent.  The facility  provides for  LIBOR-priced  and
base-rate-priced  loans,  which are  secured by a security  interest  in Central
Maine's  accounts  receivable.  The  arrangement  also  requires  the payment of
customary  fees,  based in large part on Central  Maine's  credit  ratings.  The
amount of Central  Maine's  short-term  borrowing will fluctuate with day-to-day
operational needs, the timing of long-term financing, and market conditions.  No
loans were outstanding under the new facility at March 31, 2000.

On February 15, 2000,  CMP Group  announced that New England  Business  Trust, a
wholly-owned  indirect  subsidiary,  intended to sell  approximately 2.5 million
shares  of its  6.177-million-share  common-stock  holding  in NEON  through  an
underwritten public offering expected to be completed during the second calendar
quarter  of  2000.   Although  the  market  value  of  NEON's  common  stock  is
substantially  higher  than it was at the time of  NEON's  1998  initial  public
offering,  its market value has been fluctuating and CMP Group cannot accurately
estimate the amount of proceeds to be realized through the planned offering.

In August 1998, the MPUC approved Central Maine's  application to purchase up to
11 million shares of its outstanding common stock over a three-year period, with
a  limitation  of three  million  shares  that may be  repurchased  prior to the
closing  of the sale of Central  Maine's  generating  assets.  The amount of any
stock  purchases  and their timing by Central  Maine or CMP Group will depend on
the need for equity in the respective  Company's capital  structure,  investment
opportunities and other considerations.

Upon  completion  of the  merger of CMP Group and  Energy  East,  Central  Maine
intends to conform its capital structure to the 47-percent  common-equity  ratio
required by the MPUC.  This process may include  repurchases  of common stock by
Central  Maine and CMP Group and would  reduce  Central  Maine's  liquidity  and
increase its financing requirements.

Permanent Shutdown of Maine Yankee Plant

On August 6, 1997,  the Board of Directors of Maine Yankee voted to  permanently
cease power operations at its nuclear generating plant at Wiscasset,  Maine (the
"Plant") and to begin  decommissioning  the Plant.  The Plant had  experienced a
number of operational and regulatory problems and did not operate after December
6, 1996.  The decision to close the Plant  permanently  was based on an economic
analysis of the costs,  risks and  uncertainties  associated  with operating the
Plant  compared to those  associated  with closing and  decommissioning  it. The
Plant's operating license from the NRC was scheduled to expire in 2008.

FERC Rate Case - On November 6, 1997,  Maine Yankee submitted to FERC for filing
certain  amendments to the Power  Contracts (the  "Amendatory  Agreements")  and
revised  rates to  reflect  the  decision  to shut down the Plant and to request
approval of an increase in the  decommissioning  component of its formula rates.
Maine Yankee's  submittal also requested  certain other rate changes,  including
recovery of unamortized  investment  (including fuel) and certain changes to its
billing formula, consistent with the non-operating status of the Plant. By Order
dated January 14, 1998,  the FERC accepted  Maine Yankee's new rates for filing,
subject to refund after a minimum  suspension  period, and set for hearing Maine
Yankee's Amendatory Agreements, rates, and issues concerning the prudence of the
Plant-shutdown decision that had been raised by intervenors.

During 1998 and early 1999 the active  intervenors,  including  among others the
MPUC Staff, the Maine Office of the Public Advocate  ("OPA"),  Central Maine and
other owners,  municipal and  cooperative  purchasers of Maine Yankee power (the
"Secondary  Purchasers"),   and  a  Maine  environmental  group  (the  "Settling
Parties"),  engaged in extensive  discovery and negotiations,  which resulted in
the filing of a  settlement  agreement  with the FERC on  January  19,  1999.  A
separately  negotiated  settlement  filed  with the FERC on  February  5,  1999,
resolved the issues raised by the  Secondary  Purchasers by limiting the amounts
they will pay for  decommissioning  the Plant and by  settling  other  points of
contention  affecting  individual  Secondary  Purchasers.  Both settlements were
found to be in the public interest and approved by the FERC on June 1, 1999. The
settlements  constitute  full  settlement  of all  issues  raised  in  the  FERC
proceeding,  including  decommissioning-cost issues and issues pertaining to the
prudence  of the  management,  operation,  and  decision  to  permanently  cease
operation of the Plant.

The primary settlement provided for Maine Yankee to collect $33.1 million in the
aggregate  annually,  effective August 1, 1999,  including both  decommissioning
costs and costs related to Maine Yankee's planned on-site independent spent fuel
storage installation ("ISFSI"). The 1997 FERC filing had called for an aggregate
annual collection rate of $36.4 million for decommissioning and the ISFSI, based
on a 1997 estimate.  Pursuant to the approved  settlement  the amount  collected
annually has been reduced to approximately  $25.6 million,  effective October 1,
1999, as a result of 1999 Maine legislation allowing Maine Yankee to (1) use for
construction  of the ISFSI funds held in trust  under  Maine law for  spent-fuel
disposal,  and (2) access  approximately $6.8 million held by the State of Maine
for eventual  payment to the State of Texas  pursuant to a compact for low-level
nuclear waste  disposal,  the future of which is in question after  rejection of
the selected disposal site in west Texas by a Texas regulatory agency.

The  settlement  also  provides  for  recovery  of  the  unamortized  investment
(including fuel) in the Plant, together with a return on equity of 6.50 percent,
effective  January 15, 1998,  on equity  balances up to maximum  allowed  equity
amounts,  which  resulted in a pro-rata  refund of $9.3 million  (including  tax
impacts) to the sponsors on July 15, 1999. The Settling  Parties also agreed not
to contest the effectiveness of the Amendatory  Agreements  submitted to FERC as
part of the original filing,  subject to certain limitations including the right
to challenge any accelerated recovery of unamortized  investment under the terms
of the Amendatory Agreements after a required informational filing with the FERC
by Maine Yankee.  In addition,  the  settlement  contains  incentives  for Maine
Yankee to achieve further savings in its decommissioning and ISFSI-related costs
and resolves issues concerning  restoration and future use of the Plant site and
environmental   matters  of  concern  to  certain  of  the  intervenors  in  the
proceeding.

As a  separate  part of the  settlement,  Central  Maine,  the  other  two Maine
utilities  which own  interests  in Maine  Yankee,  the MPUC Staff,  and the OPA
entered into a further  agreement  resolving retail rate issues and other issues
specific to the Maine parties,  including those that had been raised  concerning
the prudence of the operation and shutdown of the Plant (the "Maine Agreement").
Under the Maine Agreement  Central Maine is recovering its Maine Yankee costs in
accordance with its most recent rate order from the MPUC.

Finally,  the Maine  Agreement  requires  Central  Maine and the other two Maine
Utilities,  for the period from March 1, 2000, through December 1, 2004, to hold
their Maine retail ratepayers harmless from the amounts by which the replacement
power costs for Maine Yankee exceed the  replacement  power costs assumed in the
report to the Maine  Yankee  Board of  Directors  that served as a basis for the
Plant  shutdown  decision,  up to a maximum  cumulative  amount of $41  million.
Central  Maine's  share of that  amount  would be $31.2  million for the period.
Based on the results of the two year entitlement auction already completed,  the
Company will not incur any  liability  for this  provision in year 2000 and does
not believe that it will incur any liability in 2001.

CMP Group and Central Maine believe that the approved settlement,  including the
Maine Agreement, constitutes a reasonable resolution of the issues raised in the
Maine  Yankee  FERC  proceeding,   which  eliminated  significant  uncertainties
concerning CMP Group's and Central Maine's future financial performance.

Termination  of  Decommissioning  Operations  Contract - On May 4,  2000,  Maine
Yankee  notified  its  decommissioning  operations  contractor,  Stone & Webster
Engineering  Corporation  ("Stone  &  Webster"),  that  it was  terminating  its
decommissioning  operations  contract  pursuant  to the  terms of the  contract.
Subsequently,  Stone & Webster notified Maine Yankee that it was disputing Maine
Yankee's  grounds for terminating the contract.  On May 8, 2000, Stone & Webster
announced that it had signed a letter of intent with Jacobs  Engineering  Group,
Inc. ("Jacobs"),  regarding a proposed transaction in which Jacobs would acquire
substantially  all of Stone & Webster's  assets in exchange for an immediate $50
million secured credit facility and other stated  consideration,  including cash
and stock.  Stone & Webster said that the credit facility was intended to enable
it to address its current  liquidity  difficulties  and  continue to operate its
businesses  until the asset sale is  consummated.  In addition,  Stone & Webster
announced  that,  as a condition to the proposed  transactions  with Jacobs,  it
intended  to seek  bankruptcy  court  approval  of the  asset  sale  and  credit
agreement,   and   therefore   intended  to  file  a  voluntary   petition   for
reorganization  under Chapter 11 of the U.S.  Bankruptcy  Code after it signed a
definitive sale agreement with Jacobs, which it expected to occur later in May.

Maine Yankee has stated that it remains  committed to the successful  completion
of the  decommissioning  project and on May 10,  2000,  entered  into an interim
agreement  with  Stone &  Webster  for the  purposes  of  avoiding  the  adverse
consequences of an abrupt or inefficient  demobilization from the Plant site and
allowing  decommissioning  work to continue  through June 30, 2000.  During that
period  Maine  Yankee will also  continue to evaluate  all  available  long-term
alternatives for safely and efficiently completing the decommissioning  project.
However,  we cannot predict at this time what effect the financial  difficulties
of Stone & Webster,  the interim agreement,  or any subsequent  arrangement with
Stone & Webster or a new general contractor will have on the cost or schedule of
the decommissioning project.

Regulation

General - Central  Maine and its public  utility  affiliates  are subject to the
regulatory  authority  of the  MPUC  as to  retail  rates,  accounting,  service
standards,  territory served, the issuance of securities  maturing more than one
year after the date of  issuance,  certification  of  transmission  projects and
various other matters.  Central Maine is also subject to the jurisdiction of the
FERC under the  Federal  Power Act for some  phases of its  business,  including
accounting, rates relating to wholesale sales and to interstate transmission and
sales of energy and certain other matters.

The Maine  Yankee Plant and the other  nuclear  generating  facilities  in which
Central  Maine has an interest are subject to  regulation by the NRC. The NRC is
empowered to authorize the siting,  construction,  operation and decommissioning
of nuclear reactors after consideration of public health, safety,  environmental
and antitrust matters.

The  United  States  EPA  administers  programs  which  affect  Central  Maine's
remaining  generating  facilities.  The EPA has broad authority in administering
these   programs,   including   the   ability   to   require   installation   of
pollution-control  and mitigation devices.  CMP Group and Central Maine are also
subject to regulation by various state, local and other federal authorities with
regard to land use and other  environmental  matters.  For further discussion of
environmental  considerations  as they affect CMP Group and Central  Maine,  see
"Environmental  Matters",  below, and Note 2, "Legal and Environmental Matters."
Other activities of CMP Group and Central Maine from time to time are subject to
the  jurisdiction  of  various  other  state and  federal  regulatory  agencies,
including  the SEC with  respect  to the  issuance  of  securities  and  related
matters.

Electric-Utility Industry Restructuring

Maine  Restructuring  Legislation - The Maine Legislature enacted legislation in
1997 to restructure  the electric  utility  industry in Maine effective March 1,
2000. The principal  restructuring  provisions of the  legislation  provided for
customers  to  have  direct  retail  access  to  generation   services  and  for
deregulation of competitive  electric providers,  commencing March 1, 2000, with
transmission-and-distribution  companies such as Central Maine  continuing to be
regulated by the MPUC. By that date,  investor-owned  utilities were required to
divest all generation assets and  generation-related  business activities,  with
two major  exceptions:  (1)  non-utility  generator  contracts  with  qualifying
facilities and contracts with demand-side management or conservation  providers,
brokers or hosts,  and (2)  ownership  interests  in nuclear  power  plants.  As
discussed below under "Sale of Generation  Assets,"  Central Maine completed the
sale of its non-nuclear generating assets on April 7, 1999.

The legislation also required  investor-owned  utilities to sell their rights to
the capacity and energy from all undivested generation assets after February 29,
2000, including nuclear generation assets and the purchased-power contracts that
had not previously been divested pursuant to the legislation.  On July 30, 1999,
Central Maine offered its rights to the capacity and energy from its  undivested
generation assets and generation-related  business to prospective bidders and in
December  1999  contracted  to sell such rights with  respect to its  undivested
nuclear  generation  assets  (Vermont  Yankee and Millstone  Unit 3) and its NUG
contract entitlements for a two-year period commencing March 1, 2000.

As a transmission-and-distribution utility since March 1, 2000, Central Maine is
prohibited from selling  electric energy to retail  customers,  except as may be
directed by the MPUC.  Any  competitive  electricity  provider  affiliated  with
Central  Maine  would be allowed to sell  electricity  outside  Central  Maine's
service  territory without  limitation as to amount,  but within Central Maine's
service  territory the affiliate  would be limited to providing not more than 33
percent of the total kilowatt-hours sold with Central Maine's service territory,
as determined by the MPUC. CMP Group has  determined  that it does not intend to
create such an affiliate.

MPUC Proceeding on Stranded Costs,  Revenue  Requirements,  and Rate Design - By
order dated March 19, 1999, the MPUC completed the first phase of its proceeding
contemplated by Maine's  restructuring  legislation to establish the recoverable
amount and timing of Central Maine's  stranded costs,  its revenue  requirements
and the design of its rates  effective  March 1, 2000.  In its Phase I order the
MPUC  decided  the   "principles"   by  which  it  would  set  Central   Maine's
transmission-and-distribution rates, but deferred actually calculating the rates
until later in the proceeding because some of the necessary  information was not
yet available.

With respect to stranded costs,  the MPUC indicated that it would set the amount
of  recoverable  stranded costs for Central Maine later in the  proceeding.  The
restructuring statute requires the MPUC to provide transmission-and-distribution
utilities a reasonable  opportunity  to recover such costs that is equivalent to
the utility's  opportunity to recover those costs prior to the  commencement  of
retail access. The MPUC also reviewed the prescribed methodology for determining
the amount of a utility's  stranded  costs,  including  among other  factors the
application of excess value from Central Maine's divested  generation  assets to
offset stranded costs.

In the  area of  revenue  requirements,  the  Phase I  order  did not  establish
definitive  amounts,  but did contain the MPUC's conclusion that the appropriate
cost of  common  equity  for  Central  Maine as a  transmission-and-distribution
company was 10.50  percent,  with a  common-equity  component of 47 percent.  In
dealing  with  rate  design,   the  MPUC  again  limited  itself   primarily  to
establishing  principles that would guide it in designing  Central Maine's rates
effective March 1, 2000.

On July 1, 1999,  Central  Maine filed its Phase II case with the MPUC.  In that
filing  Central  Maine  updated  certain  test-year  data to  reflect  known and
measurable  changes  to its  revenue  requirement,  updated  its  stranded  cost
estimate  to  reflect   actual   data  from  the  April  1999   closing  of  its
generation-asset  sale,  and proposed  its rate design  based on the  principles
enunciated  in the Phase I order.  Some of the  information  needed to establish
rates was still incomplete in that filing, however, since neither the auction of
the output of Central  Maine's  non-divested  generation  resources  nor the bid
process for  "standard-offer"  service (for those  customers who do not select a
competitive  energy  supplier) had been completed.  In addition,  several issues
raised by the Phase I MPUC order remained unresolved,  including,  among others,
(i) whether the MPUC could require the  unamortized  investment  tax credits and
excess  deferred  income  taxes  associated  with  the sale of  Central  Maine's
generation  assets  to be  flowed  through  to  ratepayers,  and  (ii)  the rate
treatment of the gain on the sale of Union Water's  generation-related assets to
FPL and employee transition costs resulting from the generation-asset sale.

In an order dated  December 3, 1999, in a separate but related  proceeding,  the
MPUC  approved  Central  Maine's  plan  for  the  sale  of  the  output  of  its
non-divested  generation assets. In another related  proceeding,  by order dated
October 25, 1999,  the MPUC  accepted a  competitive  energy  supplier's  bid to
provide   standard-offer  service  to  Central  Maine's  residential  and  small
commercial  customers who did not select a  competitive  energy  supplier  after
March 1, 2000.  In the same order the MPUC  rejected  all of the  standard-offer
bids for Central  Maine's medium and large  commercial and industrial  customers
and sought a second round of bids. In the December 3 order the MPUC rejected all
of the second round of standard-offer  bids for Central Maine's medium and large
classes and ordered that Central Maine arrange such service for those classes.

On January  19,  2000,  the MPUC issued its Phase II order  determining  Central
Maine's  revenue   requirement  as  a   transmission-and-distribution   utility,
effective  March 1,  2000.  In the order the MPUC  disallowed  approximately  $8
million of the approximately  $12 million revenue increase  requested in Central
Maine's Phase II filing,  which had been based on certain  known and  measurable
changes to its revenue requirement.

A negotiated  settlement  approved by the MPUC on January 27, 2000, resolved the
major  issues  remaining  outstanding  in the  final  phase  of  the  ratemaking
proceeding.  The  settlement  confirmed  that the $18.2  million of  unamortized
investment  tax  credits and excess  deferred  income  taxes  related to Central
Maine's generation-asset sale would flow through to shareholders pursuant to the
normalization  rules of the Internal  Revenue Code.  In addition,  Central Maine
agreed not to seek judicial review of an August 2, 1999 MPUC order regarding the
treatment  of gains from  sales of  easements  that  required  Central  Maine to
recognize 10 percent of the gain  currently  with the remaining 90 percent being
amortized  over 5 years,  effective  as of the  dates of the 1998 and 1999  sale
transactions.  Central  Maine also agreed not to seek  reconsideration  of other
cost-of-service  updates  in the  rate  case or to  challenge  an  $4.7  million
disallowance  of employee  transition  costs,  and to withdraw its appeal of the
rate treatment of the gain on Union Water's generation-related assets.

The settlement  also allowed Central Maine to charge off $88 million on March 1,
2000,  representing its entire  remaining  investment in the Millstone 3 nuclear
unit in Connecticut,  against the regulatory  Asset Sale Gain Account created in
the  ratemaking  proceeding to recognize the above-book  value realized  through
Central  Maine's  generation-asset  sale.  This  provision  reflected  a  recent
resolution of Central Maine's arbitration and litigation claims against the lead
owners of the  jointly-owned  Millstone 3 unit,  in which  Central  Maine owns a
2.5-percent interest.

As part of the settlement  Central Maine also agreed to a one-time  earnings cap
for  1999.  Earnings  above  the cap were  deferred  in 1999 and will be used to
offset rate  increases  that would  otherwise  be required to mitigate  stranded
costs and increases in operating expenses through 2001.

Finally,   the  rate   settlement   established   Central  Maine's  rates  as  a
transmission-and-distribution  utility effective March 1, 2000. A separate order
fixed the standard-offer  prices for Central Maine's medium and large commercial
and industrial  customers at levels  intended to reflect  current market pricing
and to avoid under-collection of Central Maine's costs.

The combined  after-tax  effect of the provisions of the ratemaking  settlement,
including the earnings cap, was to reduce CMP Group's net income for 1999 by $11
million.

Central Maine  estimates  that  customers on its standard  residential  rate and
small commercial customers are saving an average of nine to ten percent on their
total electric bills after March 1, 2000, compared to earlier bills for the same
kwh usage.  Central  Maine  believes  that its medium and large  commercial  and
industrial  customers can realize savings ranging from minimal to almost fifteen
percent,  with the greater  savings  going to customers who select a competitive
energy supplier rather than taking the standard-offer service.

<PAGE>

Expansion of Lines of Business

General  - CMP Group  has been  expanding  its  business  opportunities  through
investments that capitalize on core competencies.  CMP International Consultants
(d/b/a  CNEX),  a wholly owned  subsidiary  of CMP Group,  provides  management,
planning,  consulting  and  research  and  information  services  to foreign and
domestic utilities and government agencies. TeleSmart, a wholly owned subsidiary
of CMP Group, which provided accounts receivable management services for utility
clients  was closed by CMP Group on  February  14,  2000,  after a review of the
subsidiary's prospects. The Union Water-Power Company, a wholly owned subsidiary
of CMP Group,  provides  utility  construction  and support  services (On Target
division);   energy  efficiency  performance  contracting  and  energy  use  and
management  services (Combined Energies  division);  and real estate development
services (UnionLand Services division).

Natural Gas Distribution - New England Gas Development Corporation ("New England
Gas"), which is a wholly owned subsidiary of CMP Group, holds approximately a 16
percent interest at March 31, 2000 in CMP Natural Gas, L.L.C.,  now called Maine
Natural Gas, L.L.C.  ("Maine Natural Gas"). Maine Natural Gas is a joint venture
of New England Gas and Energy East  Enterprises,  a wholly owned  subsidiary  of
Energy East, and is subject to regulation as a public utility by the MPUC. Maine
Natural Gas was formed to construct,  own and operate a natural gas distribution
system to serve certain areas of Maine that did not have gas service,  utilizing
natural gas delivered to Maine through new interstate pipeline facilities.

Maine Natural Gas began construction of its first local  distribution  system in
Windham,  Maine,  in early 1999 and began serving its first  customer in May. On
July 8, 1999,  Maine  Natural Gas and Calpine  Corporation,  a  California-based
independent power company, announced the signing of a 20-year contract for Maine
Natural  Gas to provide  natural  gas  delivery  service to  Calpine's  proposed
540-megawatt  natural  gas-fired  power plant under  construction  in Westbrook,
Maine.  Maine Natural Gas expects to commence service to the plant in the summer
of 2000,  after  construction of a two-mile  lateral  pipeline along an existing
Central  Maine  right of way that  would  interconnect  with the new  interstate
pipeline facilities. On December 13, 1999, the MPUC authorized Maine Natural Gas
to provide  service to the Calpine  plant,  as well as the unserved areas in the
town  of  Gorham,   and  on   February   18,   2000,   the  MPUC   approved   an
affiliated-interest  transaction  allowing  Maine  Natural Gas to construct  the
pipeline on Central Maine's transmission corridor.

If the merger of CMP Group and Energy East is completed,  Maine Natural Gas will
become a wholly owned subsidiary of Energy East Enterprises, and New England Gas
will  cease  to  exist.   During  1999  Energy  East  also  agreed  to  business
combinations  with  two  established  natural  gas  distribution   companies  in
Connecticut  and one in western  Massachusetts,  subject to closing  conditions,
including  shareholder  votes and regulatory  approvals.  One of the Connecticut
acquisitions  was completed in February  2000.  The other two  transactions  are
awaiting SEC approval.

Telecommunications  Investment - MaineCom Services, which is wholly owned by CMP
Group,   provides   telecommunications    services,   including   point-to-point
connections,  private networking,  consulting, private voice and data transport,
carrier services, and long-haul transport. MaineCom Services also holds, through
wholly owned New England Business Trust, an approximately 38-percent interest in
NorthEast  Optic  Network,   Inc.  ("NEON"),  a  facilities-based   provider  of
technologically advanced, high-bandwidth,  fiber optic transmission capacity for
communications  carriers on local loop,  inter-city,  and interstate facilities.
NEON owns and operates and is expanding a fiber optic network in New England and
New York,  utilizing primarily electric utility rights of way, including some of
Central Maine's and some owned by other electric utilities  including  Northeast
Utilities, another substantial minority stockholder.

On November 23, 1999, NEON announced two major agreements, one with Consolidated
Edison  Communications,  Inc. ("CEC"), a wholly owned subsidiary of Consolidated
Edison,  Inc.,  and the other with  Excelon,  a wholly owned  subsidiary of PECO
Energy,  Inc. The  agreements  effectively  expanded the reach of the network to
include  the  Philadelphia,  Baltimore  and  Washington,  D.C.,  areas.  As  the
agreements  are  implemented,  CEC  will  obtain  an  approximately  ten-percent
interest in NEON and Excelon an interest of approximately nine percent.

In August 1998 NEON completed  initial public offerings of $48 million of common
stock and $180 million of senior  notes.  As part of the  common-stock  offering
Central  Maine sold some of the  shares it then owned in NEON for  approximately
$3.1  million.   With  some  of  the  proceeds  of  the  offerings  NEON  repaid
approximately   $18  million   Central  Maine  had  advanced  under  an  earlier
construction loan agreement.

On February 15, 2000,  CMP Group  announced that New England  Business  Trust, a
wholly-owned  indirect  subsidiary,  intended to sell  approximately 2.5 million
shares  of its  6.177-million-share  common-stock  holding  in NEON  through  an
underwritten public offering expected to be completed during the second calendar
quarter  of  2000.   Although  the  market  value  of  NEON's  common  stock  is
substantially  higher  than it was at the time of  NEON's  1998  initial  public
offering,  its market value has been fluctuating and CMP Group cannot accurately
estimate the amount of proceeds to be realized through the planned offering.

CMP Group  believes  that  although  NEON  operated at a loss in 1999 and in the
first  quarter  of 2000,  there  is a need for the  fiber  optic  network  it is
constructing  in the  northeastern  United States.  CMP Group,  however,  cannot
predict the future results of NEON's operations.

Environmental Matters

Federal,  state and local environmental laws and regulations cover air and water
quality,  land  use,  power  plant  and  transmission  line  siting,  noise  and
aesthetics,   solid  and  hazardous  waste  and  other  environmental   matters.
Compliance  with  these  laws and  regulations  impacts  the  manner and cost of
electric  service by requiring,  among other  things,  changes in the design and
operation of existing facilities and changes or delays in the location,  design,
construction and operation of new facilities.  In the past, these  environmental
regulations   most   significantly   affected  Central  Maine's  electric  power
generating facilities,  which were sold to FPL Group in April 1999, as discussed
above. In addition,  Central Maine is subject to environmental proceedings under
federal and state hazardous  substance and hazardous waste  regulations (such as
the  Comprehensive  Environmental  Response,  Compensation,  and  Liability  Act
("CERCLA") and the Resource  Conservation  and Recovery Act ("RCRA") and similar
state  statutes).  Central Maine  estimates  that its capital  expenditures  for
improvements  needed to comply  with  environmental  laws and  regulations  were
approximately $9.9 million for the five years from 1995 through 1999.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

CMP Group is exposed to interest  rate risk  through the use of  fixed-rate  and
variable-rate  debt and preferred  stock as sources of capital.  As of March 31,
2000,  Central  Maine had $40  million of  medium-term  notes  outstanding,  $10
million of which bear floating, LIBOR-based rates.

                                Variable Long Term              Fixed Long Term
                                ------------------              ---------------
                                            (dollars in thousands)

Weighted Average Rates                9.19%                          7.22%

Balance at March 31, 2000            $34,854                       $165,575

Maturity Period                    2000 - 2019                    2000 - 2021

<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Regulatory Matters - For a discussion of certain significant  regulatory matters
affecting CMP Group and Central Maine,  including  those related to the proposed
merger with Energy East, and an MPUC proceeding that determined  Central Maine's
stranded costs,  revenue requirements and related matters, see Item 2 of Part I,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations of CMP Group ad Central Maine Power  Company,"  "Formation of Holding
Company and Proposed  Merger," and "MPUC  Proceeding on Stranded Costs,  Revenue
Requirements and Rate Design," which are incorporated herein by reference.

Maine  Yankee - For a  discussion  of the  termination  by Maine  Yankee  of its
decommissioning  operations  contract with Stone & Webster and related  matters,
see  Item 2 of  Part I,  "Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations  of CMP Group and  Central  Maine  Power
Company,"  -  "Permanent  Shutdown of Maine  Yankee  Plant," -  "Termination  of
Decommissioning Operations Contract."

Arbitration  Claim - For a discussion  of an  arbitration  claim by the minority
owners of the Wyman Unit No. 4 generating  unit against  Central Maine seeking a
share of the proceeds from Central  Maine's  generating-asset  sale, see Note 2,
"Commitments  and   Contingencies"  -  "Wyman  No.  4  Arbitration,"   which  is
incorporated herein by reference.

Environmental  Matters  -  For  a  discussion  of  administrative  and  judicial
proceedings   concerning   cleanup  of  hazardous  waste  sites,   see  Note  2,
"Commitments and  Contingencies,"  "Legal and  Environmental  Matters," which is
incorporated herein by reference.

Item 2. through Item 4. Not applicable

Item 5. Other Information.

Change in Annual  Meeting  Date and  Deadline  for  Shareholder  Proposals  - On
February  17,  2000,  CMP Group  announced  a change in its annual  shareholders
meeting date from May 18, 2000, to October 31, 2000.

For a shareholder proposal to be considered for inclusion in the proxy statement
and form of proxy for the 2000 annual meeting of  shareholders  of CMP Group, it
must be received by Anne M. Pare,  Secretary,  CMP Group, Inc., 83 Edison Drive,
Augusta, Maine 04336, on or before May 22, 2000.

Under the articles of  incorporation  of CMP Group, a shareholder  who wishes to
nominate a candidate  for election to the board of directors of CMP Group at the
2000 annual meeting of shareholders of CMP Group or bring any matter before that
meeting (other than matters included in CMP Group's proxy materials) must submit
the  nomination  or the matter to the  Secretary  of CMP Group no  earlier  than
August 2, 2000 and no later than  September  1, 2000.  The notice must also meet
other requirements set forth in the articles of incorporation.

<PAGE>

Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits. None.
(b)      Reports on Form 8-K.  The Company filed the following reports on Form
         8-K during the first quarter of 2000 and thereafter to date:

Date of Report                                    Items Reported

January 27, 2000                                      Item 5

CMP Group and Central  Maine  reported  that on January 27, 2000,  CMP Group had
issued a  release  reporting  on (a) its 1999  operating  results  and a related
January 27, 2000,  settlement of an MPUC regulatory proceeding involving several
Central  Maine  ratemaking  issues,  and (b)  progress in  obtaining  regulatory
approvals for its planned merger with Energy East, and quoted  relevant parts of
the release..

Date of Report                                    Items Reported

February 17, 2000                                     Item 5

CMP Group reported that on February 17, 2000, it had issued a release announcing
a change in its annual  meeting date from May 18, 2000, to October 31, 2000, and
quoted the release.

<PAGE>

                                   Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrants  have duly  caused  this  report  to be  signed on their  respective
behalfs by the undersigned thereunto duly authorized.

                                 CMP GROUP, INC.



Date:  May 15, 2000          By  /s/ Arthur W. Adelberg
      ---------------            ----------------------------------------------
                                 Arthur W. Adelberg, Executive Vice President
                                 and Chief Financial Officer (Principal
                                 Financial Officer and duly authorized officer)



                                 CENTRAL MAINE POWER COMPANY

Date:  May 15, 2000          By  /s/ Michael W. Caron
      ---------------            ----------------------------------------------
                                 Michael W. Caron, Comptroller (Chief
                                 Accounting Officer and duly authorized officer)