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

                                  FORM 10-Q

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

                For the quarterly period ended March 31, 2004
                                               --------------

                                     OR

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

             For the transition period from ________ to ________

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

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

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

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

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


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

                                             Yes  X              No
                                                 ---                ---

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

Northeast Utilities                          Yes  X              No
                                                 ---                ---
The Connecticut Light and Power Company      Yes                 No  X
                                                 ---                ---
Public Service Company of New Hampshire      Yes                 No  X
                                                 ---                ---
Western Massachusetts Electric Company       Yes                 No  X
                                                 ---                ---

Indicate the number of shares outstanding of each of the issuers' classes of
common stock, as of the latest practicable date:

Company - Class of Stock                       Outstanding at April 30, 2004
------------------------                       -----------------------------
Northeast Utilities
Common shares, $5.00 par value                 127,981,582 shares

The Connecticut Light and Power Company
Common stock, $10.00 par value                 6,035,205 shares

Public Service Company of New Hampshire
Common stock, $1.00 par value                  301 shares

Western Massachusetts Electric Company
Common stock, $25.00 par value                 434,653 shares




                              GLOSSARY OF TERMS

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

NU COMPANIES OR SEGMENTS

CL&P..........................  The Connecticut Light and Power Company
CRC...........................  CL&P Receivables Corporation
HWP...........................  Holyoke Water Power Company
NGC...........................  Northeast Generation Company
NGS...........................  Northeast Generation Services Company
NU or the company.............  Northeast Utilities
NU Enterprises................  NU's competitive subsidiaries comprised of
                                Select Energy, NGC, SESI, NGS, HWP, and Woods
                                Network.  For further information, see Note 8,
                                "Segment Information," to the consolidated
                                financial statements.
PSNH..........................  Public Service Company of New Hampshire
RMS...........................  R. M. Services, Inc.
Select Energy.................  Select Energy, Inc. (including its wholly owned
                                subsidiary SENY)
SENY..........................  Select Energy New York, Inc.
SESI..........................  Select Energy Services, Inc.
Utility Group.................  NU's regulated utilities comprised of CL&P,
                                PSNH, WMECO, and Yankee Gas.  For further
                                information, see Note 8, "Segment Information,"
                                to the consolidated financial statements.
WMECO.........................  Western Massachusetts Electric Company
Woods Network.................  Woods Network Services, Inc.
Yankee........................  Yankee Energy System, Inc.
Yankee Gas....................  Yankee Gas Services Company

THIRD PARTIES

Bechtel.......................  Bechtel Power Corporation
CYAPC.........................  Connecticut Yankee Atomic Power Company
NRG...........................  NRG Energy, Inc.

REGULATORS

CSC...........................  Connecticut Siting Council
DPUC..........................  Connecticut Department of
                                Public Utility Control
DTE...........................  Massachusetts Department of
                                Telecommunications and Energy
FERC..........................  Federal Energy Regulatory Commission
NHPUC.........................  New Hampshire Public Utilities Commission
SEC...........................  Securities and Exchange Commission

OTHER

Act, the......................  Public Act No. 03-135
CTA...........................  Competitive Transition Assessment
EPS...........................  Earnings per Share
FASB..........................  Financial Accounting Standards Board
FIN...........................  FASB Interpretation
FMCC..........................  Federally Mandated Congestion Costs
FSP...........................  FASB Staff Position
GSC...........................  Generation Service Charge
IERM..........................  Infrastructure Expansion Rate Mechanism
Incentive Plan................  Northeast Utilities Incentive Plan
ISO-NE........................  New England Independent System Operator
kWh...........................  Kilowatt-hour
LMP...........................  Locational Marginal Pricing
LOCs..........................  Letters of Credit
MW............................  Megawatts
NU 2003 Form 10-K.............  The Northeast Utilities and Subsidiaries
                                combined 2003 Form 10-K as filed with the SEC
NYMEX.........................  New York Mercantile Exchange
Restructuring
  Settlement..................  "Agreement to Settle PSNH Restructuring"
ROE...........................  Return on Equity
RTO...........................  Regional Transmission Organization
S&P...........................  Standard & Poor's
SBC...........................  System Benefits Charge
SCRC..........................  Stranded Cost Recovery Charge
SFAS..........................  Statement of Financial Accounting Standards
SMD...........................  Standard Market Design
TSO...........................  Transitional Standard Offer
VIE...........................  Variable Interest Entity



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


                              TABLE OF CONTENTS
                              -----------------
                                                                          Page
                                                                          ----
Part I.   Financial Information

     Item 1.   Consolidated Financial Statements

               and

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

          For the following companies:

          Northeast Utilities and Subsidiaries

               Consolidated Balance Sheets - (Unaudited)
               March 31, 2004 and December 31, 2003.................        2

               Consolidated Statements of Income - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........        4

               Consolidated Statements of Cash Flows - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........        5

               Management's Discussion and Analysis of
               Financial Condition and Results of Operations........        6

          Independent Accountants' Report...........................       25

          Notes to Consolidated Financial Statements
          (unaudited - all companies)...............................       26

          The Connecticut Light and Power Company
          and Subsidiaries

               Consolidated Balance Sheets - (Unaudited)
               March 31, 2004 and December 31, 2003.................       52

               Consolidated Statements of Income - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........       54

               Consolidated Statements of Cash Flows - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........       55

               Management's Discussion and Analysis of
               Financial Condition and Results of Operations........       56

          Public Service Company of New Hampshire
          and Subsidiaries

               Consolidated Balance Sheets - (Unaudited)
               March 31, 2004 and December 31, 2003.................       60

               Consolidated Statements of Income - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........       62

               Consolidated Statements of Cash Flows - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........       63

               Management's Discussion and Analysis of
               Financial Condition and Results of Operations........       64

          Western Massachusetts Electric Company
          and Subsidiary

               Consolidated Balance Sheets - (Unaudited)
               March 31, 2004 and December 31, 2003.................       68

               Consolidated Statements of Income - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........       70

               Consolidated Statements of Cash Flows - (Unaudited)
               Three Months Ended March 31, 2004 and 2003...........       71

               Management's Discussion and Analysis of
               Financial Condition and Results of Operations........       72

     Item 3.   Quantitative and Qualitative
               Disclosures About Market Risk........................       74

     Item 4.   Controls and Procedures..............................       76

Part II.  Other Information

     Item 1.   Legal Proceedings....................................       77

     Item 2.   Changes in Securities, Use of Proceeds
               and Issuer Purchases of Equity Securities............       78

     Item 6.   Exhibits and Reports on Form 8-K.....................       79

Signatures..........................................................       82



NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                              March 31,        December 31,
                                                                2004               2003
                                                           --------------     --------------
                                                                (Thousands of Dollars)
<S>                                                       <C>                <C>
ASSETS
------

Current Assets:
  Cash and cash equivalents                               $        76,050    $        37,196
  Unrestricted cash from counterparties                            70,905             46,496
  Restricted cash - LMP costs                                     123,681             93,630
  Special deposits                                                 35,477             79,120
  Investments in securitizable assets                             186,821            166,465
  Receivables, net                                                727,378            704,893
  Unbilled revenues                                               117,121            125,881
  Fuel, materials and supplies, at average cost                   122,487            154,076
  Derivative assets                                               426,660            301,194
  Prepayments and other                                            57,413             63,780
                                                          ---------------    ---------------
                                                                1,943,993          1,772,731
                                                          ---------------    ---------------
Property, Plant and Equipment:
  Electric utility                                              5,556,220          5,465,854
  Gas utility                                                     757,869            743,990
  Competitive energy                                              888,700            885,953
  Other                                                           224,972            221,986
                                                          ---------------    ---------------
                                                                7,427,761          7,317,783
    Less: Accumulated depreciation                              2,283,625          2,244,263
                                                          ---------------    ---------------
                                                                5,144,136          5,073,520
  Construction work in progress                                   375,262            356,396
                                                          ---------------    ---------------
                                                                5,519,398          5,429,916
                                                          ---------------    ---------------
Deferred Debits and Other Assets:
  Regulatory assets                                             2,921,973          2,974,022
  Goodwill                                                        319,986            319,986
  Purchased intangible assets, net                                 22,054             22,956
  Prepaid pension                                                 359,982            360,706
  Other                                                           451,364            428,567
                                                          ---------------    ---------------
                                                                4,075,359          4,106,237
                                                          ---------------    ---------------


Total Assets                                              $    11,538,750    $    11,308,884
                                                          ===============    ===============

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


NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                               March 31,        December 31,
                                                                 2004               2003
                                                            --------------     --------------
                                                                 (Thousands of Dollars)
<S>                                                        <C>                <C>
LIABILITIES AND CAPITALIZATION
------------------------------

Current Liabilities:
  Notes payable to banks                                   $        10,000    $       105,000
  Long-term debt - current portion                                  67,676             64,936
  Accounts payable                                                 839,865            768,783
  Accrued taxes                                                     66,192             51,598
  Accrued interest                                                  58,123             41,653
  Derivative liabilities                                           228,510            164,689
  Other                                                            238,975            249,576
                                                           ---------------    ---------------
                                                                 1,509,341          1,446,235
                                                           ---------------    ---------------

Rate Reduction Bonds                                             1,682,500          1,729,960
                                                           ---------------    ---------------

Deferred Credits and Other Liabilities:
  Accumulated deferred income taxes                              1,313,425          1,287,354
  Accumulated deferred investment tax credits                      101,714            102,652
  Deferred contractual obligations                                 455,995            469,218
  Regulatory liabilities                                         1,218,243          1,164,288
  Other                                                            243,239            247,526
                                                           ---------------    ---------------
                                                                 3,332,616          3,271,038
                                                           ---------------    ---------------
Capitalization:
  Long-Term Debt                                                 2,564,737          2,481,331
                                                           ---------------    ---------------

  Preferred Stock of Subsidiaries - Non-Redeemable                 116,200            116,200
                                                           ---------------    ---------------

  Common Shareholders' Equity:
    Common shares, $5 par value - authorized
     225,000,000 shares;  150,562,489 shares issued
     and 127,942,036 shares outstanding in 2004 and
     150,398,403 shares issued and 127,695,999 shares
     outstanding in 2003                                           752,812            751,992
    Capital surplus, paid in                                     1,110,094          1,108,924
    Deferred contribution plan - employee stock
      ownership plan                                               (70,665)           (73,694)
    Retained earnings                                              857,197            808,932
    Accumulated other comprehensive income                          42,857             25,991
    Treasury stock, 19,566,929 shares in 2004
      and 19,518,023 shares in 2003                               (358,939)          (358,025)
                                                           ---------------    ---------------
  Common Shareholders' Equity                                    2,333,356          2,264,120
                                                           ---------------    ---------------
Total Capitalization                                             5,014,293          4,861,651
                                                           ---------------    ---------------
Commitments and Contingencies (Note 4)

Total Liabilities and Capitalization                       $    11,538,750    $    11,308,884
                                                           ===============    ===============

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


NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                      March 31,
                                                         ---------------------------------
                                                               2004               2003
                                                         --------------     --------------
                                                               (Thousands of Dollars,
                                                              except share information)

<S>                                                      <C>                <C>
Operating Revenues                                       $    1,838,287     $    1,584,183
                                                         --------------     --------------
Operating Expenses:
  Operation -
     Fuel, purchased and net interchange power                1,176,215            965,041
     Other                                                      227,621            189,272
  Maintenance                                                    57,211             45,892
  Depreciation                                                   54,573             49,473
  Amortization                                                   29,291             57,299
  Amortization of rate reduction bonds                           42,999             39,200
  Taxes other than income taxes                                  77,589             73,974
                                                         --------------     --------------
       Total operating expenses                               1,665,499          1,420,151
                                                         --------------     --------------
Operating Income                                                172,788            164,032

Interest Expense:
  Interest on long-term debt                                     32,738             32,940
  Interest on rate reduction bonds                               25,695             27,861
  Other interest                                                  4,347              2,744
                                                         --------------     --------------
       Interest expense, net                                     62,780             63,545
                                                         --------------     --------------
Other Income, Net                                                 1,687                576
                                                         --------------     --------------
Income Before Income Tax Expense                                111,695            101,063
Income Tax Expense                                               42,863             39,469
                                                         --------------     --------------
Income Before Preferred Dividends of Subsidiaries                68,832             61,594
Preferred Dividends of Subsidiaries                               1,390              1,390
                                                         --------------     --------------
Net Income                                               $       67,442     $       60,204
                                                         ==============     ==============

Basic and Fully Diluted Earnings Per Common Share        $         0.53     $         0.47
                                                         ==============     ==============
Basic Common Shares Outstanding (average)                   127,879,766        127,013,678
                                                         ==============     ==============
Fully Diluted Common Shares Outstanding (average)           128,061,086        127,111,272
                                                         ==============     ==============

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


NORTHEAST UTILITIES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>


                                                                                   Three Months Ended
                                                                                        March 31,
                                                                            -------------------------------
                                                                                 2004               2003
                                                                            -------------      ------------
                                                                                 (Thousands of Dollars)
<S>                                                                         <C>                 <C>
Operating Activities:
  Income before preferred dividends of subsidiaries                         $      68,832       $     61,594
  Adjustments to reconcile to net cash flows
   provided by operating activities:
    Depreciation                                                                   54,573             49,473
    Deferred income taxes and investment tax credits, net                          20,028            (22,468)
    Amortization                                                                   29,291             57,299
    Amortization of rate reduction bonds                                           42,999             39,200
    Amortization of recoverable energy costs                                       10,189              6,269
    Increase/(decrease) in prepaid pension                                            724             (7,650)
    Regulatory overrecoveries                                                      13,670             54,301
    Other sources of cash                                                           9,884              9,737
    Other uses of cash                                                            (42,504)           (46,365)
  Changes in current assets and liabilities:
    Restricted cash - LMP costs                                                   (30,051)              -
    Unrestricted cash from counterparties                                         (24,409)           (17,936)
    Receivables and unbilled revenues, net                                        (13,725)            74,564
    Fuel, materials and supplies                                                   31,589              8,622
    Investments in securitizable assets                                           (20,356)            23,149
    Other current assets                                                          (67,493)           (87,989)
    Accounts payable                                                               71,082            (88,484)
    Accrued taxes                                                                  14,594            (56,908)
    Other current liabilities                                                      87,245             69,338
                                                                            -------------       ------------
Net cash flows provided by operating activities                                   256,162            125,746
                                                                            -------------       ------------

Investing Activities:
  Investments in plant:
    Electric, gas and other utility plant                                        (132,073)           (91,808)
    Competitive energy assets                                                      (5,697)            (4,984)
                                                                            -------------       ------------
  Cash flows used for investments in plant                                       (137,770)           (96,792)
  Other investment activities                                                       6,087              6,571
                                                                            -------------       ------------
Net cash flows used in investing activities                                      (131,683)           (90,221)
                                                                            -------------       ------------

Financing Activities:
  Issuance of common shares                                                         2,522              6,979
  Repurchase of common shares                                                        (915)           (23,209)
  Issuance of long-term debt                                                       82,438             44,338
  Retirement of rate reduction bonds                                              (47,460)           (42,901)
  (Decrease)/increase in short-term debt                                          (95,000)            39,000
  Reacquisitions and retirements of long-term debt                                 (6,405)           (14,324)
  Cash dividends on preferred stock of subsidiaries                                (1,390)            (1,390)
  Cash dividends on common shares                                                 (19,177)           (17,469)
  Other financing activities                                                         (238)              (204)
                                                                            -------------       ------------
Net cash flows used in financing activities                                       (85,625)            (9,180)
                                                                            -------------       ------------
Net increase in cash and cash equivalents                                          38,854             26,345
Cash and cash equivalents - beginning of period                                    37,196             54,678
                                                                            -------------       ------------
Cash and cash equivalents - end of period                                   $      76,050       $     81,023
                                                                            =============       ============

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



                   NORTHEAST UTILITIES AND SUBSIDIARIES

                  Management's Discussion and Analysis of
               Financial Condition and Results of Operations


This discussion should be read in conjunction with the consolidated
financial statements and footnotes in this Form 10-Q, current reports on
Form 8-K dated January 22, 2004 and March 30, 2004, and the NU 2003 Form
10-K.  All per share amounts are reported on a fully diluted basis.

FINANCIAL CONDITION AND BUSINESS ANALYSIS

Overview
--------

Consolidated Results:  Northeast Utilities (NU or the company) earned $67.4
million, or $0.53 per share, in the first quarter of 2004, compared with
earnings of $60.2 million, or $0.47 per share, in the first quarter of
2003.  Higher first quarter earnings in 2004 were primarily a result of
improved results at NU Enterprises.  NU Enterprises earned $18.8 million in
the first quarter of 2004, compared with $5.2 million in the first quarter
of 2003.

NU's revenues in the first quarter of 2004 increased to $1.8 billion from
$1.6 billion in the same period of 2003.  The increase in revenues
primarily was due to an increase in revenues at NU Enterprises' merchant
energy business segment and an increase in Utility Group retail electric
rates and sales.

NU Enterprises:  NU Enterprises, Inc. is the parent company of Select
Energy, Inc. (Select Energy), Northeast Generation Company (NGC), Select
Energy Services, Inc. (SESI), Northeast Generation Services Company (NGS),
and their respective subsidiaries, and Woods Network Services, Inc. (Woods
Network), all of which are collectively referred to as "NU Enterprises."
The generation operations of Holyoke Water Power Company (HWP) are also
included in the results of NU Enterprises.  The companies included in the
NU Enterprises segment are grouped into two business segments: the merchant
energy business segment and the energy services business segment.  The
merchant energy business segment is comprised of Select Energy's wholesale
businesses, which includes approximately 1,440 megawatts (MW) of primarily
pumped storage and hydroelectric generation assets and Select Energy's
retail business.  The energy services business segment consists of the
operations of NGS, SESI and Woods Network.

NU Enterprises earned $18.8 million, or $0.15 per share, in the first
quarter of 2004, compared with $5.2 million, or $0.04 per share, in the
first quarter of 2003. The performance of Select Energy's retail business
improved in the first quarter of 2004, earning $2.3 million compared with a
loss of $1.9 million in the first quarter of 2003.  The improved retail
results are primarily due to improved margins and growth in retail electric
sales.

Select Energy's wholesale business earned $16.8 million in the first
quarter of 2004, compared with $6.8 million in the same period of 2003.
Select Energy's earnings profile in the first half of 2004 will be quite
different from the first six months of 2003, particularly in the wholesale
business.  Select Energy's cost per kilowatt-hour (kWh) for procuring
electricity is relatively flat throughout 2004.  However, contracted sales
prices to some of Select Energy's wholesale customers were relatively high
in the first quarter and will be lower in the second quarter, creating
better wholesale margins in the first quarter of 2004 and lower margins in
the second quarter.  As a result, earnings at NU Enterprises in the second
quarter of 2004 are expected to be significantly below the $11.9 million NU
Enterprises earned in the second quarter of 2003.  However, NU Enterprises'
earnings in the first half of 2004 are expected to be higher than the $17.1
million earned in the first half of 2003.

The energy services business segment lost $0.2 million in the first quarter
of 2004, compared with earnings of $0.4 million in the first quarter of
2003 primarily due to project delays as a result of colder than average
January weather and the slow commercial construction sector in New England.

NU Enterprises parent company expenses totaled $0.1 million in the first
quarter of both 2004 and 2003.

Utility Group:  Earnings at the Utility Group were lower, totaling $54.8
million, or $0.43 per share in the first quarter of 2004, compared with
$59.4 million, or $0.47 per share in 2003, primarily due to higher
depreciation and pension expense during the first quarter of 2004 as
compared with the first quarter of 2003.  These factors were partially
offset by an increase in retail electric sales of 2.7 percent in the first
quarter of 2004, compared with the first quarter of 2003.  Higher earnings
at The Connecticut Light and Power Company (CL&P) and Public Service
Company of New Hampshire (PSNH) were more than offset by lower results at
Yankee Gas Services Company (Yankee Gas) and Western Massachusetts Electric
Company (WMECO).  Included in Utility Group earnings in 2004 and 2003 are
$7.3 million and $8 million, respectively, related to the regulated
transmission business.  Transmission business earnings for the first
quarter of 2004 are lower than the same period in 2003 due to lower
revenues and higher interest charges.  Transmission revenues are lower in
2004 due to a revenue tracking mechanism that was put in place in 2004 to
match revenues and costs of providing transmission service.  In the first
quarter of 2003, revenues were not subject to such a tracking mechanism and
were positively impacted by high usage. For further information see Note 8,
"Segment Information," to the consolidated financial statements.

Earnings after preferred dividends of $1.4 million in both periods at CL&P
totaled $26.2 million in the first quarter of 2004, compared with $25.3
million in 2003.  CL&P's higher earnings resulted from distribution rate
increases which took effect on January 1, 2004, transmission rate increases
and a 2 percent increase in retail electric sales offset by higher
depreciation and pension expense in the first quarter of 2004, compared
with the first quarter of 2003.

PSNH earned $11.8 million in the first quarter of 2004, compared with $10.8
million in 2003.  The increase in earnings at PSNH was primarily due to a
6.9 percent increase in retail electric sales offset by higher pension
expense in the first quarter of 2004, compared with the first quarter of
2003.

Earnings at WMECO totaled $3.5 million in the first quarter of 2004,
compared with $6.1 million in 2003.  Lower earnings at WMECO were primarily
due to lower pension income and higher interest expense in the first
quarter of 2004 compared with the first quarter of 2003 due to the issuance
of 10-year notes on September 30, 2003, as well as a 0.7 percent decrease
in retail sales.

Yankee Gas earned $11.9 million in the first quarter of 2004, compared with
$15.8 million in 2003.  Lower Yankee Gas earnings resulted from higher
pension expense and an August 2003 change in the Yankee Gas rate design.
Yankee Gas' current rate design is intended to recover more costs based on
stable, fixed monthly charges rather than based on variable, usage-based
charges as was the rate design in place in 2003.  That shift from more
variable to more fixed charges will reduce quarterly earnings in the higher-
use first and fourth quarters and improve quarterly results in the lower-
use second and third quarters compared to Yankee Gas' previous rate design.
This decrease was offset by a 6.8 percent increase in firm natural gas
sales in the first quarter of 2004, compared with the first quarter of
2003, which reflected a negative adjustment to the estimate of unbilled
revenues in the first quarter of 2003.  Excluding the adjustment to the
estimate of unbilled revenues, firm natural gas sales decreased by 0.5
percent in the first quarter of 2004, compared with the first quarter of
2003.

Future Outlook
--------------

Consolidated:  NU continues to project consolidated earnings of between
$1.20 per share and $1.40 per share in 2004, including approximately $0.10
per share of parent company interest and other expenses.

Utility Group:  The NU consolidated earnings estimate of $1.20 per share to
$1.40 per share for 2004 includes Utility Group earnings of between $1.08
per share and $1.20 per share.

NU Enterprises:  The NU consolidated earnings estimate for 2004 continues to
reflect earnings of between $0.22 per share and $0.30 per share or earnings
of between $28 million and $38 million at NU Enterprises.  Based on first
quarter 2004 results, management expects 2004 NU Enterprises' earnings to
be in the mid to upper end of that range.  NU continues to project 2004
merchant energy business segment earnings of $24 million to $31 million.
Earnings for the remainder of 2004, specifically the second quarter, at the
merchant energy business will be negatively impacted by the change in
Select Energy's earnings profile discussed previously.  The energy services
business segment, comprised of NGS, SESI and Woods Network, was below
forecast for the first quarter, but is still expected to earn between $4
million and $7 million in 2004.

Liquidity
---------

Consolidated:  NU continues to maintain a high level of liquidity.  NU had
$147 million of cash, including cash and cash equivalents and unrestricted
cash from counterparties at March 31, 2004, compared with $83.7 million at
December 31, 2003.

NU's net cash flows provided by operating activities increased to $256.2
million in the first quarter of 2004 from $125.7 million in the first
quarter of 2003.  Cash flows provided by operating activities increased due
to increases in working capital items, primarily accounts payable and
accrued taxes.  Accounts payable increased in the first quarter of 2004 due
primarily to an increase in CL&P accounts payable resulting from
transitional standard offer (TSO) supply purchases at higher prices and an
increased percentage of TSO purchases from unaffiliated suppliers.  In the
first quarter of 2003, accounts payable decreased due to a lower level of
Select Energy wholesale electricity purchases.  Accrued taxes decreased in
2003 due to the payment of taxes on the gain on the sale of Seabrook.
These first quarter 2003 decreases were partially offset by a decrease in
accounts receivable related to a lower level of Select Energy sales in the
first quarter of 2003 compared to the last quarter of 2002 and a decrease
in investments in securitizable assets.  Regulatory overrecoveries also
decreased primarily due to lower stranded cost and generation service
collections in the first quarter of 2004 compared to 2003.  The lower level
of collections caused lower current taxable income and an increase in
deferred income taxes from 2003.

During the first quarter of 2004 NU issued $82.4 million in long-term debt,
including $75 million at Yankee Gas and $7.4 million at SESI.  NU also repaid
$47.5 million of rate reduction bonds.

On March 31, 2004, NU paid a dividend of $0.15 per share.  On April 13,
2004, the NU Board of Trustees approved a dividend of $0.15 per share,
payable June 30, 2004, to shareholders of record as of June 1, 2004.
Subject to the NU Board of Trustees' approval and future earnings levels,
management anticipates recommending increases to the NU common dividend.
The NU Board of Trustees will address the issue of a dividend increase at
the company's annual meeting on May 11, 2004.

NU's capital expenditures totaled $137.8 million in the first quarter of
2004, compared with a budget of $173.7 million.  The lower level of capital
expenditures was primarily related to delays in certain transmission
projects.  NU's 2004 capital spending is projected to total $701 million,
including $412 million by CL&P, $150 million by PSNH, $39 million by WMECO,
$60 million by Yankee Gas, and $40 million by other NU subsidiaries.
Delays in certain major projects could cause NU's actual capital spending
to be below this projection.

On April 14, 2004, Standard & Poor's (S&P) lowered the outlook for NU to
"negative" from "stable," citing increased competitive business exposure,
increased projected capital expenditures at CL&P and the relatively low
return on equity (ROE) at CL&P that was authorized by the Connecticut
Department of Public Utility Control (DPUC) in the December 2003 rate case
decision.

Utility Group:  At March 31, 2004, the Utility Group had $10 million in
borrowings outstanding on its $300 million revolving credit line.  This
credit line is scheduled to mature in November 2004 and will be renewed for
at least one year.

In addition to its revolving credit line, CL&P has an arrangement with a
financial institution under which CL&P can sell up to $100 million of
accounts receivable and unbilled revenues.  At March 31, 2004, CL&P had sold
accounts receivable totaling $80 million to that financial institution.
For more information regarding the sale of receivables, see Note 1H,
"Summary of Significant Accounting Policies - Sale of Customer Receivables"
to the consolidated financial statements.

On January 30, 2004, Yankee Gas sold $75 million of first mortgage bonds
carrying an interest rate of 4.8 percent that will mature on January 1,
2014.  The proceeds from these bonds were primarily used to reduce short-
term debt, which was increasing as a result of Yankee Gas' capital
expenditures.

CL&P has an application pending with the DPUC to issue up to $280 million
of long-term debt in 2004 and another $600 million for the period 2005
through 2007. The majority of that debt would be issued to finance CL&P's
electric transmission and distribution initiatives.  CL&P also has $59
million of first mortgage bonds that can be called at a premium beginning
June 1, 2004.  At March 31, 2004, CL&P had $160.5 million in short-term
debt outstanding from the NU Money Pool.

PSNH has an application pending with the New Hampshire Public Utilities
Commission (NHPUC) to issue up to $50 million of debt.  At March 31, 2004,
PSNH had $35 million in short-term debt outstanding from the NU Money Pool.

NU Enterprises:  At March 31, 2004, NU Enterprises had no borrowings and
$63.8 million in letters of credit (LOCs) outstanding on NU parent's $350
million revolving credit line.  This credit line is scheduled to mature in
November 2004 and is expected to be renewed.

Additionally, SESI had borrowed $7.4 million during the first quarter of
2004 to finance the implementation of energy saving improvements at
customer facilities. These borrowings are recovered under the terms of
SESI's energy savings contracts.

On March 26, 2004, Moody's Investors Service placed NGC's bonds under
review for possible downgrade, but expected NGC's bonds to maintain an
investment grade rating after the review was completed.  On April 14, 2004,
S&P lowered the ratings on NGC's bonds to BB+, S&P's highest non-investment
grade rating, from BBB-, S&P's lowest investment grade rating.  The S&P
rating decrease was based in part on its own forecast of NGC's
profitability in a merchant energy market which included a low forecasted
level of natural gas prices.  S&P also lowered its outlook on NU to
"negative" from "stable" at the same time.  The downgrade is not expected
to have an impact on NGC's financial performance.

Impacts of Standard Market Design
---------------------------------

On March 1, 2003, the New England Independent System Operator (ISO-NE)
implemented Standard Market Design (SMD).  As part of SMD, locational
marginal pricing (LMP) is utilized to assign value and causation to
transmission congestion and line losses. Transmission congestion costs
represent the additional costs incurred due to the need to run uneconomic
generating units in certain areas that have transmission constraints, which
prevent these areas from obtaining alternative lower-cost generation.  Line
losses represent losses of electricity as it is sent over transmission
lines.

CL&P was billed $186 million of incremental LMP costs by its standard offer
service suppliers, including affiliate Select Energy, or by ISO-NE in 2003.
CL&P and its suppliers disputed the responsibility for the $186 million of
incremental LMP costs incurred.  A settlement agreement was reached among
all the parties involved and was filed with the Federal Energy Regulatory
Commission (FERC) on March 3, 2004.  NU recorded a pre-tax loss in 2003 of
approximately $60 million (approximately $37 million after-tax) related to
this settlement agreement.  This settlement agreement will not be final
until it is approved by the FERC, and management expects to receive FERC
approval of the settlement agreement in the first half of 2004.

Nuclear Decommissioning and Plant Closure Costs
-----------------------------------------------

The purchasers of NU's ownership shares of the Millstone, Seabrook and
Vermont Yankee plants assumed the obligation of decommissioning those
plants, but NU still has significant decommissioning and plant closure cost
obligations to the companies that own the Yankee Atomic (YA), Connecticut
Yankee (CY) and Maine Yankee (MY) nuclear power plants (collectively, the
Yankee Companies).  Each plant has been shut down and is undergoing
decommissioning.  The Yankee Companies collect decommissioning and closure
costs through wholesale, FERC-approved rates charged under power purchase
agreements to NU's electric utility companies CL&P, PSNH and WMECO.  These
companies in turn pass these costs on to their customers through state
regulatory commission-approved retail rates.  YA has received FERC approval
to collect all presently estimated decommissioning costs.  MY is currently
negotiating a settlement with the FERC and others to collect its presently
estimated decommissioning costs.

CY's estimated decommissioning and plant closure costs for the period 2000
through 2023 have increased approximately $390 million over the April 2000
estimate of $434 million approved by the FERC in a rate case settlement.
The revised estimate reflects the fact that CY is now self-performing all
work to complete the decommissioning of the plant due to the termination of
the decommissioning contract with Bechtel Power Corporation in July 2003,
the increases in the projected costs of spent fuel storage, and increased
security and liability and property insurance.  NU's share of CY's
increased decommissioning and plant closure costs is approximately $191
million. CY has not yet applied to the FERC for recovery of this amount.
In total, NU's estimated remaining decommissioning and plant closure
obligation to CY is $320.7 million.

NU cannot at this time predict the timing or outcome of the FERC proceeding
required for the collection of the increased decommissioning costs.
Management believes that these costs have been prudently incurred and will
ultimately be recovered from the customers of CL&P, PSNH and WMECO.
However, there is a risk that some portion of these increased costs may not
be recovered as a result of the FERC proceedings.

NU Enterprises
--------------

Business Segments:  NU Enterprises aligns its businesses into two business
segments, the merchant energy business segment and the energy services
business segment.  The merchant energy business segment includes Select
Energy's wholesale and retail marketing businesses.  Also included are
1,440 MW of generation assets, consisting of 1,293 MW of primarily pumped
storage and hydroelectric generation assets at NGC and 147 MW of coal-fired
generation at HWP.  These generation assets support the merchant energy
business segment.

The energy services business segment includes the operations of SESI, NGS,
and Woods Network.  SESI performs energy management services for large
commercial customers, institutional facilities and the United States
government and energy-related construction services.  NGS operates and
maintains NGC's and HWP's generation assets and provides third-party
electrical services.

Results and Outlook:  NU Enterprises earned $18.8 million in the first
quarter of 2004, compared with $5.2 million in the first quarter of 2003.
During 2004, NU expects that NU Enterprises will earn in the range of $28
million to $38 million, or $0.22 to $0.30 per share.  Management estimates
that between $24 million and $31 million of those earnings in 2004 will
come from the merchant energy business segment and between $4 million and
$7 million from the energy services business segment.  Those ranges are
heavily dependent on NU Enterprises' ability to achieve targeted wholesale
and retail origination margins, successfully manage its contract portfolios
and achieve targeted growth in the energy services business segment.  Based
on first quarter 2004 results, management expects 2004 NU Enterprises'
earnings to be in the mid to upper end of that range.

In the first quarter of 2004, Select Energy won contracts in the New Jersey
Basic Generation Service and Maryland utility auctions.  As a result of
these contracts, Select Energy will serve a peak load of 1,300 MW in 2004,
450 MW in 2005 and 350 MW in 2006.  Select Energy will continue to bid on
contracts in 2004 that will take effect in 2004 and beyond.  Select
Energy's ability to secure a significant amount of wholesale load is a
critical factor in NU Enterprises' ongoing profitability.  Based upon March 31,
2004 market information, Select Energy's wholesale electric business has
already contracted for more than 80 percent of the business needed to reach its
2004 gross margin targets, assuming satisfactory portfolio management for the
remainder of the year.

The second activity included in NU Enterprises' merchant energy business
segment is retail marketing.  Select Energy's retail marketing businesses
earned $2.3 million in the first quarter of 2004, compared with a loss of
$1.9 million for the same period in 2003.  The improved retail results are
primarily due to improved margins and growth in retail electric sales.
Select Energy's retail business has already contracted for more than 70
percent of the business needed to achieve 2004 margin targets.

Intercompany Transactions:  CL&P's standard offer purchases from Select
Energy represented $148.5 million in the first quarter of 2004, compared
with $141 million during the same period in 2003.  Other energy purchases
between CL&P and Select Energy totaled $30 million in the first quarter of
2004 and $36 million in the first quarter of 2003.  Additionally, WMECO's
purchases from Select Energy represented $32 million in the first quarter
of 2004, compared with $39 million in the first quarter of 2003.  These
amounts are eliminated in consolidation.

NU Enterprises' Market and Other Risks
--------------------------------------

Overview:  For further information on risk management activities, see
"Competitive Energy Subsidiaries' Market and Other Risks" in NU's combined
report on Form 10-K.

Risk management within Select Energy is organized to address the market,
credit and operational exposures arising from the merchant energy business
segment, which include:  wholesale marketing activities (including limited
energy trading for market and price discovery purposes as well as asset
optimization) and retail marketing activities.  The framework and degree to
which these risks are managed and controlled is consistent with the
limitations imposed by NU's Board of Trustees as established and
communicated in NU's risk management policies and procedures.

Merchant Energy Marketing Activities:  Select Energy manages its portfolio
of wholesale and retail marketing contracts and assets to maximize value
while maintaining an acceptable level of risk.  At forward market prices in
effect at March 31, 2004, the wholesale marketing portfolio had a positive
fair value.  This positive fair value indicates a likely positive impact on
Select Energy's gross margin in the future.  However, there could be
significant volatility in the energy commodities markets that may affect
this position between now and when the contracts are settled.  Accordingly,
there can be no assurances that Select Energy will realize the gross margin
corresponding to the present positive fair value of its wholesale marketing
portfolio.

Hedging and Non-Trading:  For information on derivatives used for hedging
purposes and non-trading derivatives, see Note 2, "Derivative Instruments,"
to the consolidated financial statements.

Wholesale Contracts Defined as "Energy Trading":  Energy trading
transactions at Select Energy include financial transactions and physical
delivery transactions for electricity, natural gas and oil in which Select
Energy is attempting to profit from changes in market prices.  Energy
trading contracts are recorded at fair value, and changes in fair value
affect net income.

At March 31, 2004, Select Energy had trading derivative assets of $188.3
million and trading derivative liabilities of $160.9 million, for a net
positive position of $27.4 million for the entire trading portfolio.  These
amounts are combined with other derivatives and are included in derivative
assets and derivative liabilities on the accompanying consolidated balance
sheets. The increase in both derivative asset and liability amounts from
December 31, 2003, relates primarily to price increases, as trading
activity has decreased.  Information regarding non-trading and other
derivatives is included in Note 2, "Derivative Instruments," to the
consolidated financial statements.

There can be no assurances that Select Energy will realize cash
corresponding to the present positive net fair value of its trading
positions.  Numerous factors could either positively or negatively affect
the realization of the net fair value amount in cash.  These include the
volatility of commodity prices, changes in market design or settlement
mechanisms, the outcome of future transactions, the performance of
counterparties, and other factors.

Select Energy has policies and procedures requiring all trading positions
to be marked-to-market at the end of each business day and segregating
responsibilities between the individuals actually trading (front office)
and those confirming the trades (middle office).  The determination of the
portfolio's fair value is the responsibility of the middle office
independent from the front office.

The methods used to determine the fair value of energy trading contracts
are identified and segregated in the table of fair value of contracts at
March 31, 2004.  A description of each method is as follows: 1) prices
actively quoted primarily represent New York Mercantile Exchange futures
and options that are marked to closing exchange prices; 2) prices provided
by external sources primarily include over-the-counter forwards and
options, including bilateral contracts for the purchase or sale of
electricity or natural gas, and are marked to the mid-point of bid and ask
market prices; and 3) prices based on models or other valuation methods
primarily include transactions for which specific quotes are not available.
Currently, Select Energy has no contracts for which fair value is
determined based on a model or other valuation method.  Broker quotes for
electricity are available through the year 2006.  Broker quotes for natural
gas are available through 2013.

Generally, valuations of short-term contracts derived from quotes or other
external sources are more reliable should there be a need to liquidate the
contracts, while valuations for longer-term contracts are less certain.
Accordingly, there is a risk that contracts will not be realized at the
amounts recorded.  However, Select Energy has obtained corresponding
purchase or sale contracts for substantially all of the trading contracts
that have maturities in excess of one year.  Because these contracts are
sourced, changes in the value of these contracts due to fluctuations in
commodity prices are not expected to affect Select Energy's earnings.

As of and for the three months ended March 31, 2004, the sources of the
fair value of trading contracts and the changes in fair value of these
trading contracts are included in the following tables.  Intercompany
transactions are eliminated and not reflected in the amounts below.

-------------------------------------------------------------------------------
(Millions of Dollars)      Fair Value of Trading Contracts at March 31, 2004
-------------------------------------------------------------------------------
                          Maturity    Maturity of     Maturity in     Total
                          Less than   One to Four      Excess of       Fair
Sources of Fair Value     One Year       Years        Four Years      Value
-------------------------------------------------------------------------------
Prices actively quoted      $0.2          $0.2           $ -          $ 0.4
Prices provided by
  external sources           5.4           6.8            14.8         27.0
-------------------------------------------------------------------------------
Totals                      $5.6          $7.0           $14.8        $27.4
-------------------------------------------------------------------------------

The fair value of energy trading contracts decreased $5.1 million from
$32.5 million at December 31, 2003 to $27.4 million at March 31, 2004.  The
change in the fair value of the trading portfolio is primarily attributable
to contracts realized or otherwise settled during the period.  There were
no changes in valuation techniques or assumptions in the first quarter of
2004.

-------------------------------------------------------------------------------
                                               Total Portfolio Fair Value
-------------------------------------------------------------------------------
                                                   Three Months Ended
(Millions of Dollars)                                March 31, 2004
-------------------------------------------------------------------------------
Fair value of trading contracts outstanding
  at the beginning of the period                          $32.5
Contracts realized or otherwise settled
  during the period                                        (5.7)
Changes in fair value of contracts                          0.6
-------------------------------------------------------------------------------
Fair value of trading contracts outstanding
  at the end of the period                                $27.4
-------------------------------------------------------------------------------

Changing Market:  The breadth and depth of the market for energy marketing
products in Select Energy's areas of business continue to be adversely
affected by the withdrawal or financial weakening of a number of companies,
particularly power marketers, who have historically done significant
amounts of business with Select Energy.  In general, the market for such
products has become shorter term in nature with less liquidity, market
pricing information is becoming less readily available, and participants
are more often unable to meet Select Energy's credit standards without
providing cash or LOC support.  Select Energy is being adversely affected
by these factors, and there could be a continuing adverse impact on Select
Energy's business lines due to its increasing reliance on business
arrangements with a more limited number of counterparties, primarily power
generators.  The decrease in the number of counterparties participating in
the market for long-term energy contracts also continues to affect Select
Energy's ability to estimate the fair value of its long-term wholesale
energy contracts.

Changes are occurring in the administration of transmission systems in
territories in which Select Energy does business.  Regional transmission
organizations (RTO) are being proposed and approved, and other changes in
market design are occurring within transmission regions.  For example, SMD
was implemented in New England on March 1, 2003 and has created both
challenges and opportunities for Select Energy. For information regarding
the effects of SMD on Select Energy and RTOs, see "Impacts of Standard
Market Design," and "Regional Transmission Organization," in this
Management's Discussion and Analysis.  As the market continues to evolve,
there could be additional adverse effects that management cannot determine
at this time.

Counterparty Credit:  Counterparty credit risk relates to the risk of loss
that Select Energy would incur because of non-performance by counterparties
pursuant to the terms of their contractual obligations.  Select Energy has
established written credit policies with regard to its counterparties to
minimize overall credit risk. These policies require an evaluation of
potential counterparties' financial conditions (including credit ratings),
collateral requirements under certain circumstances (including cash
advances, LOCs, and parent guarantees), and the use of standardized
agreements that allow for the netting of positive and negative exposures
associated with a single counterparty.  This evaluation results in
establishing credit limits prior to Select Energy's entering into
contracts.  The appropriateness of these limits is subject to continuing
review.  Concentrations among these counterparties may affect Select
Energy's overall exposure to credit risk, either positively or negatively,
in that the counterparties may be similarly affected by changes to
economic, regulatory or other conditions.  At March 31, 2004, approximately
83 percent of Select Energy's counterparty credit exposure to wholesale and
trading counterparties was cash collateralized or rated BBB- or better.
Select Energy held $70.9 million and $46.5 million of counterparty cash
advances at March 31, 2004 and December 31, 2003, respectively.  For
further information, see Note 1K, "Unrestricted Cash from Counterparties,"
to the consolidated financial statements.

Asset Concentrations:  At March 31, 2004, positions with five counterparties
collectively represented approximately $132.2 million, or 70 percent, of
the $188.3 million trading derivative assets.  The largest counterparty's
position is secured with LOCs and cash collateral.  Select Energy holds
parent company guarantees at above investment grade ratings supporting the
remaining positions of the counterparties.  None of the other
counterparties represented more than 10 percent of trading derivative
assets at March 31, 2004.

Select Energy's Credit:  A number of Select Energy's contracts require the
posting of additional collateral in the form of cash or LOCs in the event
NU's ratings were to decline and in increasing amounts dependent upon the
severity of the decline.  At NU's present investment grade ratings, Select
Energy has not had to post any collateral based on credit downgrades.  Were
NU's unsecured ratings to decline two to three levels to sub-investment
grade, Select Energy could, under its present contracts, be asked to
provide approximately $311 million of collateral or LOCs to various
unaffiliated counterparties and approximately $52 million to several
independent system operators and unaffiliated local distribution companies,
which management believes NU would currently be able to provide, subject to
the Securities and Exchange Commission (SEC) limits described below.  NU's
credit ratings outlooks are currently stable or negative, but management
does not believe that at this time there is a significant risk of a ratings
downgrade to sub-investment grade levels.

NU has applied to the SEC for authority to expand its financial support of
NU Enterprises.  NU primarily seeks to 1) increase its allowable
investments in certain of its unregulated businesses, presently 15 percent
of its consolidated capitalization as permitted by SEC regulation, by an
additional $500 million, 2) increase the limit for its guarantees of all of
its competitive affiliates from $500 million to $750 million, and 3)
increase its allowable investments in exempt wholesale generators (EWGs)
from $481 million to $1 billion.

If granted, the SEC's order would permit NU's future investment in Select
Energy above the amount now allowed.  NU has no present plans to
significantly expand its EWG portfolio.  However, if an investment
opportunity becomes available, NU would be able to pursue it within the new
allowable EWG investment level.  NU expects SEC approval by mid-2004.

If the application is not granted by mid-2004 as management expects, then
there could be a negative impact on the merchant energy business line's
ability to achieve its 2004 earnings estimate.  This business line depends
on NU parent guarantees to support the energy contracts that make up both
its revenues and expenses.  At March 31, 2004, NU parent could guarantee an
additional $191 million of merchant energy business line contracts, but
guarantee levels constantly fluctuate with the market value of the
contracts that are guaranteed and NU's ability to issue new guarantees may
be constrained due to the aforementioned SEC limitation.

In addition, at March 31, 2004, the SEC's 15 percent-of-capitalization test
would have enabled NU to invest only up to an additional $95 million in
these businesses, regardless of NU's liquidity resources.  This restriction
might, depending upon the amounts and types of obligations being guaranteed
or collateralized limit the ability of NU to utilize its full remaining
guarantee and collateral capacity.  In the event such a limit is
approached, NU would seek regulatory relief or would be required to reduce
its investment in such businesses sufficiently to allow it to provide
additional collateral.

For further information regarding Select Energy's activities and risks, see
Note 2, "Derivative Instruments," and Note 5, "Comprehensive Income," to
the consolidated financial statements.

Utility Group Business Development and Capital Expenditures
-----------------------------------------------------------

Connecticut - CL&P:  On July 14, 2003, the Connecticut Siting Council (CSC)
approved a 345,000 volt transmission line project from Bethel, Connecticut
to Norwalk, Connecticut.  The project is estimated to cost approximately
$200 million and will help alleviate identified reliability issues in
southwest Connecticut and help reduce congestion costs for all of
Connecticut.  An appeal of the CSC decision by the City of Norwalk is
pending.  Management does not expect the appeal to be successful.
Management, however, does not know if the pending appeal will affect CL&P's
schedule in constructing the project or the in service date, which is
anticipated to be by the end of 2005.  This project is exempt from the
State of Connecticut's moratorium on the approval of new electric and
natural gas transmission projects.  At March 31, 2004, CL&P has capitalized
$20.3 million associated with this project.

On October 9, 2003, CL&P and United Illuminating (UI) filed for approval of
a separate 345,000 volt transmission line from Norwalk, Connecticut to
Middletown, Connecticut.  Estimated construction costs of this project are
approximately $620 million.  CL&P will jointly site this project with UI
and CL&P will own 80 percent, or approximately $496 million, of the
project.  This project is also exempt from the State of Connecticut's
moratorium on the approval of new electric and natural gas transmission
projects.  Hearings before the CSC began in February 2004.  CL&P expects
the CSC to rule on the application by the end of 2004 and for construction
to take place from 2005 through 2007.  At March 31, 2004, CL&P has
capitalized $10.7 million related to this project.

In September 2002, the CSC approved a plan to replace an undersea electric
transmission line between Norwalk, Connecticut and Northport - Long Island,
New York, at an estimated cost of $90 million.  CL&P and the Long Island
Power Authority each own approximately 50 percent of the line.  The project
still requires federal and New York state approvals.  Given the approval
process, changing pricing and operational rules in the New England and New
York energy markets and pending business issues between the parties, the
expected in-service date remains under evaluation.  This project is also
exempt from the State of Connecticut's moratorium on the approval of new
electric and natural gas transmission projects.  At March 31, 2004, CL&P
has capitalized $5.2 million related to this project.

Connecticut - Yankee Gas:  Yankee Gas received a decision from the DPUC
supporting the construction and operation of a 1.2 billion cubic foot
liquefied natural gas storage and production facility in Waterbury,
Connecticut.  Construction of the facility, which is expected to take
approximately three years, could begin in the second half of 2004.  The
decision allows for the deferral of prudently incurred costs related to the
project and requires Yankee Gas to file a rate case to recover this
investment when the facility is placed in service.  This project is also
exempt from the State of Connecticut's moratorium on the approval of new
electric and natural gas transmission projects.  At March 31, 2004, Yankee
Gas has capitalized approximately $2.7 million related to this project.

On March 25, 2004, the DPUC approved a nine mile extension of Yankee Gas'
distribution system in southeastern Connecticut to the New England Gas
Company system in Rhode Island.  Yankee Gas hopes to place the extension in
service by October 1, 2004 at an approximate cost of $5 million.

New Hampshire:  On February 6, 2004, the NHPUC approved a $70 million
proposal by PSNH to replace a nearly 50 year old coal and oil-burning
boiler at Schiller Station in Portsmouth, New Hampshire with a boiler that
would burn wood.  However, PSNH will not commence the project based on a
risk and reward sharing mechanism specified in the NHPUC's order.  On
March 3, 2004, PSNH filed a joint motion for consideration with the New
Hampshire Office of the Consumer Advocate, the state Office of Energy and
Planning and the New Hampshire Timberland Owners' Association that, if
approved, would modify the sharing mechanism.  If the NHPUC approves the
modification and other approvals are received in a timely manner, then PSNH
anticipates completion of the project in 2006.

Regional Transmission Organization
----------------------------------

The FERC has required all transmission owning utilities to voluntarily form
RTOs or to state why this process has not begun.

On October 31, 2003, ISO-NE, along with NU and six other New England
transmission companies filed a proposal with the FERC to create an RTO for
New England.  On March 24, 2004, the FERC issued an order accepting the New
England RTO proposal. The RTO is intended to strengthen the independent and
efficient management of the region's power system while ensuring that
customers in New England continue to have the most reliable system possible
to realize the benefits of a competitive wholesale energy market.

In a separate filing made on November 4, 2003, NU along with six other New
England transmission owners requested, consistent with the FERC's pricing
policy for RTOs and Order-2000-compliant independent system operators, that
the FERC approve a single ROE for regional and local rates that would
consist of a proposed 12.8 percent base ROE as well as incentive adders of
0.5 percent for joining a RTO and 1.0 percent for constructing new
transmission facilities approved by the RTO.  If the FERC approves the
request, then the transmission owners would receive a 13.3 percent ROE for
existing transmission facilities and a 14.3 percent ROE for new
transmission facilities.  In its March 24, 2004 order the FERC partially
accepted this ROE proposal, but set certain issues to hearing.

Restructuring and Rate Matters
------------------------------

Utility Group:  On August 26, 2003, NU's electric operating companies filed
their first transmission rate case at the FERC since 1995.  In the filing,
these companies requested implementation of a formula rate that would allow
recovery of increasing transmission expenditures on a timelier basis and
that the changes, including a $23.7 million annual rate increase through
2004, take effect on October 27, 2003.  These companies requested that the
FERC maintain their existing 11.75 percent ROE until a ROE for the New
England RTO is established by the FERC.  On October 22, 2003, the FERC
accepted this filing implementing the proposed rates subject to refund
effective on October 28, 2003. The FERC set certain issues to hearing, and
a final decision in the rate case is expected in 2005.

Connecticut - CL&P:

Public Act No. 03-135 and Rate Proceedings:  On June 25, 2003, the Governor
of Connecticut signed into law Public Act No. 03-135 (the Act) that amended
Connecticut's 1998 electric utility industry legislation.  The Act required
CL&P to file a four-year transmission and distribution plan with the DPUC.
On December 17, 2003, the DPUC issued its final decision in the rate case.

CL&P filed a petition for reconsideration of certain items in the rate case
on December 31, 2003.  Other parties also filed petitions for
reconsideration.  On January 21, 2004, the DPUC agreed to reconsider CL&P's
items.  Hearings were held in April 2004 and a final decision is expected
to be issued in June 2004.  However, CL&P also filed an appeal with the
Connecticut Superior Court on January 30, 2004. The appeal was filed in the
event that the outcome of the DPUC's reconsideration is still not
acceptable to CL&P.

CTA and SBC Reconciliation:  The Competitive Transition Assessment (CTA)
allows CL&P to recover stranded costs, such as securitization costs
associated with the rate reduction bonds, amortization of regulatory
assets, and independent power producer over market costs while the System
Benefits Charge (SBC) allows CL&P to recover certain regulatory and energy
public policy costs, such as public education outreach costs, hardship
protection costs, transition period property taxes, and displaced workers
protection costs.  The Generation Service Charge (GSC) allows CL&P to
recover the costs of the procurement of energy for standard offer service.
On April 1, 2004, CL&P filed its annual CTA and SBC reconciliation with the
DPUC.  For the year ended December 31, 2003, total CTA revenues and excess
GSC revenues exceeded the CTA revenue requirement by $148.3 million.  This
amount was recorded as a regulatory liability on the accompanying
consolidated balance sheets.  For the same period, SBC revenues exceeded
the SBC revenue requirement by $25.5 million.  Management expects a
decision in this docket from the DPUC by the end of 2004.

Connecticut - Yankee Gas:

Rate Case: In 2003, Yankee Gas earned a ROE below the DPUC-authorized level
of 11 percent.  As a result of higher pension costs and other factors not
addressed by current rate levels, management expects that Yankee Gas will
continue to underearn the DPUC-authorized ROE.  Yankee Gas expects to file
a rate case in July 2004 for a rate increase to take effect in January of
2005.

IERM Settlement:  On April 29, 2004, Yankee Gas and the Office of Consumer
Counsel filed a settlement agreement which provides for the termination of
Yankee Gas' Infrastructure Expansion Rate Mechanism (IERM).  The settlement
finalizes ratemaking treatment for all Yankee Gas IERM projects and returns
Yankee Gas to a traditional capital investment test.  The filing seeks DPUC
approval in the second quarter.

New Hampshire:

Delivery Rate Case:  PSNH's delivery rates were fixed by the "Agreement to
Settle PSNH Restructuring" (Restructuring Settlement) until February 1,
2004.  Consistent with the requirements of the Restructuring Settlement and
state law, PSNH filed a delivery service rate case and tariffs with the
NHPUC on December 29, 2003 to increase electricity delivery rates by
approximately $21 million, or 2.6 percent, effective February 1, 2004.  In
addition, PSNH is requesting that recovery of FERC-regulated transmission
costs be adjusted annually through a tracking mechanism.  The NHPUC
suspended the proposed rate increase until the conclusion of the delivery
rate case.  Hearings are scheduled for August 2004, and a decision is
expected in the third or fourth quarter of 2004 with rates retroactively
applied to February 1, 2004.

SCRC Reconciliation Filing:  The Stranded Cost Recovery Charge (SCRC)
allows PSNH to recover its stranded costs.  On an annual basis, PSNH files
with the NHPUC a SCRC reconciliation filing for the preceding calendar
year.  This filing includes the reconciliation of stranded cost revenues
with stranded costs, and transition energy service (TS) revenues with TS
costs.  The NHPUC reviews the filing, including a prudence review of PSNH's
generation operations.  The 2003 SCRC filing was made on April 30, 2004.
Management does not expect the review of the 2003 SCRC filing to have a
material effect on PSNH's net income or financial position.

Massachusetts:

Transition Cost Reconciliations: On March 31, 2003, WMECO filed its 2002
transition cost reconciliation with the Massachusetts Department of
Telecommunications and Energy (DTE).  This filing reconciled the recovery
of generation-related stranded costs for calendar year 2002 and included
the renegotiated purchased power contract related to the Vermont Yankee
nuclear unit.

On July 15, 2003, the DTE issued a final order on WMECO's 2001 transition
cost reconciliation, which addressed WMECO's cost tracking mechanisms.  As
part of that order, the DTE directed WMECO to revise its 2002 annual
transition cost reconciliation filing.  The revised filing was submitted to
the DTE on September 22, 2003.  Hearings have been held, and the timing of
a final decision is uncertain.  Management does not expect the outcome of
this docket to have a material adverse impact on WMECO's net income or
financial position.

On March 31, 2004, WMECO filed its 2003 transition cost reconciliation with
the DTE.  This filing reconciled the recovery of generation-related
stranded costs for calendar year 2003.  The timing of a final decision is
uncertain.  Management does not expect the outcome of this docket to have a
material adverse impact on WMECO's net income or financial position.

Critical Accounting Policies and Estimates Update
-------------------------------------------------

Accounting for Transmission Revenues Subject to Refund:  The $23.7 million
transmission rate increase that NU's electric operating companies requested
began being billed subject to refund on October 28, 2003.  The rate
increase was based on a proposed ROE of 11.75 percent, which is unchanged
from the ROE included in previous transmission rates and is currently being
billed.  Subsequent to this transmission rate case filing, the FERC
approved ISO New England as a RTO.  The FERC set for hearing a proposed
12.8 percent ROE with a 0.5 percent adder for joining a RTO and a 1.0
percent adder for future transmission expansion.  The higher proposed RTO
rate and adders are not currently being billed.

Since October 27, 2003, management has evaluated the increase in
transmission revenues that has been collected to determine if any amounts
are probable of refund to customers in the future.  Any amounts probable of
refund to customers would reduce revenues and be recorded as a regulatory
liability.  However, at this time management believes that its request will
be approved by the FERC, and as a result, that no refunds are likely.

Accounting for PSNH Rate Case:  PSNH requested that an increase in rates be
included in bills starting on February 1, 2004 subject to refund.  The
NHPUC denied that request but indicated that any rate changes from the rate
case would be effective from February 1, 2004 forward.  The rate case is
not expected to be concluded until the third or fourth quarter of 2004.
The method for recovering any retroactive rate increase from customers has
not yet been determined.

The costs driving the need for the rate increase, which include pension
expense, depreciation expense, and transmission and reliability expenses,
that have been incurred from February 1, 2004 through March 31, 2004 have
been expensed as incurred.  When those incurred costs become probable of
recovery in rates management will record those costs as regulatory assets.
This may result in lower PSNH earnings for the first two or three quarters
of 2004 with an adjustment in the third or fourth quarter of 2004 to
reflect the final rate increase retroactive to February 1, 2004.

Accounting for the Effect of Medicare Changes on Postretirement Benefits
Other Than Pension (PBOP):  On December 8, 2003, the President of the United
States signed into law a bill that expands Medicare, primarily by adding a
prescription drug benefit and by adding a federal subsidy to qualifying
plan sponsors of retiree health care benefit plans.  Management believes
that NU currently qualifies for the subsidy for certain retiree groups.

Specific authoritative accounting guidance on how to account for the effect
the Medicare federal subsidy has on NU's PBOP Plan has not been finalized
by the Financial Accounting Standards Board (FASB).  FASB Staff Position
(FSP) No. FAS 106-1, "Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement and Modernization Act of 2003,"
required NU to make an election for 2003 financial reporting.  The election
was to either defer the impact of the subsidy until the FASB issues
guidance or to reflect the impact of the subsidy on December 31, 2003
reported amounts.  NU chose to reflect the impact on December 31, 2003
reported amounts, which decreased the PBOP benefit obligation by $19.5
million and increased actuarial gains by $19.5 million with no impact on
2003 expenses, assets, or liabilities.  The actuarial gain, the estimate of
which was refined in the first quarter of 2004 to $20 million, will be
amortized as a reduction to PBOP expense over 13 years beginning in 2004.
PBOP expense in 2004 will also reflect a lower interest cost due to the
reduction in the December 31, 2003 benefit obligation.  Management
estimates that the reduction in PBOP expense in 2004 will be approximately
$2 million.

On March 12, 2004, the FASB issued a draft FSP that would supersede FSP No.
FAS 106-1.  This draft FSP concludes that the effects of the federal
subsidy should be considered an actuarial gain and treated like similar
gains and losses and requires certain disclosures for employers that
sponsor postretirement health care plans that provide prescription drug
benefits.  The accounting treatment under the proposed FSP is consistent
with NU's accounting treatment at December 31, 2003.

The estimated 2004 reduction in PBOP expense of approximately $2 million
could change as a result of the completion of an actuarial estimate of the
subsidy based on recent prescription drug claim experience.  The subsidy
estimate could also change as regulations are promulgated by the federal
agencies responsible for administration of the Medicare program.

Other Matters
-------------

Commitments and Contingencies:  For further information regarding other
commitments and contingencies, see Note 4, "Commitments and Contingencies,"
to the consolidated financial statements.

Forward Looking Statements:  This discussion and analysis includes forward
looking statements, which are statements of future expectations and not
facts including, but not limited to, statements regarding future earnings,
refinancings, regulatory proceedings, the use of proceeds from
restructuring, and the recovery of operating costs.  Words such as
estimates, expects, anticipates, intends, plans, and similar expressions
identify forward looking statements.  Actual results or outcomes could
differ materially as a result of further actions by state and federal
regulatory bodies, competition and industry restructuring, changes in
economic conditions, changes in weather patterns, changes in laws,
developments in legal or public policy doctrines, technological
developments, volatility in electric and natural gas commodity markets, and
other presently unknown or unforeseen factors.

Website: Additional financial information is available through NU's website
at www.nu.com.



RESULTS OF OPERATIONS - NU CONSOLIDATED

The following table provides the variances in income statement line items
for the consolidated statements of income for NU included in this report on
Form 10-Q for the three months ended March 31, 2004:

                                           Income Statement Variances
                                             (Millions of Dollars)
                                             2004 over/(under) 2003
                                             ----------------------
                                             Amount         Percent
                                             ------         -------
Operating Revenues:                           $254             16%

Operating Expenses:
Fuel, purchased and net
  interchange power                            211             22
Other operation                                 38             20
Maintenance                                     11             25
Depreciation                                     5             10
Amortization                                   (28)           (49)
Amortization of rate
  reduction bonds                                4             10
Taxes other than income taxes                    4              5
                                              ----           ----
Total operating expenses                       245             17
                                              ----           ----

Operating income                                 9              5
                                              ----           ----

Interest expense, net                           (1)            (1)
Other income, net                                1             (a)
                                              ----           ----
Income before income tax expense                11             11
Income tax expense                               4              9
Preferred dividends of subsidiaries              -              -
                                              ----           ----
Net Income                                    $  7             12%
                                              ====           ====
(a) Percent greater than 100.

Comparison of the First Quarter of 2004 to the First Quarter of 2003

Operating Revenues
Total revenues increased by $254 million in the first quarter of 2004,
compared with the same period in 2003, due to higher revenues from NU
Enterprises ($183 million), higher Utility Group electric revenues ($49
million or $46 million after intercompany eliminations) and higher Utility
Group gas revenues ($20 million).

The NU Enterprises' revenues increase is primarily due to higher wholesale
revenues for the merchant energy segment resulting from higher electric
prices and higher gas volumes.  The Utility Group electric revenues
increase is primarily due to higher retail revenue ($105 million),
partially offset by lower wholesale revenue ($54 million).  The electric
retail revenue increase is primarily due to increases in the energy service
revenues for CL&P, PSNH and WMECO ($76 million), Federally Mandated
Congestion Cost revenues for CL&P ($40 million), and higher sales volume
($14 million), offset by lower CL&P EAC revenue as a result of the end of
EAC billings in December 2003 ($12 million) and lower rates for CL&P and
WMECO stranded cost recovery ($10 million).  Electric retail kWh sales
increased by 2.7 percent in the first quarter of 2004.  The electric
wholesale revenue decrease is primarily due to lower short-term
transactions ($46 million) and the expiration of long-term contracts ($8
million).  The higher Utility Group gas revenue increase is primarily due
to the recovery of higher gas costs.  Firm natural gas sales increased by
6.8 percent in the first quarter of 2004 from the same period of 2003,
which reflected a negative adjustment to the estimate of unbilled revenues
in the first quarter of 2003.  Excluding the adjustment to the estimate of
unbilled revenues, firm natural gas sales decreased by 0.5 percent in the
first quarter of 2004 from the same period in 2003.

Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expense increased by $211 million
in the first quarter of 2004, primarily due to higher wholesale activity at
NU Enterprises ($138 million after intercompany eliminations) and higher
purchased power costs for the Utility Group ($73 million after intercompany
eliminations). The increase for the Utility Group is primarily due to an
increase in the standard offer service requirements rates for CL&P ($76
million) and WMECO ($6 million), higher Yankee Gas expenses due to
increased gas prices and higher sales volume ($25 million), offset by lower
fuel EAC amortization for CL&P ($12 million), lower wholesale transactions
for CL&P ($15 million), and lower expenses for PSNH due to lower regulated
wholesale purchases ($10 million).

Other Operation
Other operation expenses increased $38 million in the first quarter of
2004, primarily due to higher competitive business expenses resulting from
business growth ($16 million), higher regulated business administrative and
general expenses ($7 million) primarily due to higher pension costs, higher
transmission expense ($9 million), higher fossil production expense ($3
million), and higher nuclear related expenses as a result of the absence of
the 2003 CL&P Millstone use of proceeds docket ($2 million).  That docket
resulted in the recovery of certain other operations costs and maintenance
costs that were expensed in periods prior to 2003. The recovery of these
costs through the use of proceeds docket resulted in credits to these
accounts in the first quarter of 2003.

Maintenance
Maintenance expenses increased $11 million in the first quarter of 2004,
primarily due to the absence of the 2003 positive resolution of the CL&P
Millstone use of proceeds docket ($5 million), higher fossil production
expense ($2 million), higher competitive transmission expense ($2 million),
and higher distribution expense ($2 million).

Depreciation
Depreciation increased by $5 million in the first quarter of 2004 due to
higher Utility Group plant balances.

Amortization
Amortization decreased by $28 million in the first quarter of 2004
primarily due to lower Utility Group recovery of stranded costs and a
decrease in amortization expense resulting from the implementation of the
CL&P distribution rate case decision effective in January 2004 ($7
million).

Amortization of Rate Reduction Bonds
Amortization of rate reduction bonds increased by $4 million in the first
quarter of 2004 due to the repayment of more principal as compared to 2003.

Taxes Other Than Income Taxes
Taxes other than income taxes increased by $4 million in the first quarter
of 2004 primarily due to an increase in Connecticut gross earnings tax as a
result of an increase in revenues for NU Enterprises, CL&P and Yankee Gas.

Income Tax Expense
Income tax expense increased due to higher income before tax expense.



INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Trustees and Shareholders
  of Northeast Utilities:

We have reviewed the accompanying condensed consolidated balance sheet of
Northeast Utilities and subsidiaries ("the Company") as of March 31, 2004,
and the related condensed consolidated statements of income and cash flows
for the three-month periods ended March 31, 2004 and 2003.  These interim
financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical
procedures and of making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an audit
conducted in accordance with auditing standards generally accepted in the
United States of America, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole.  Accordingly,
we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated interim financial statements
for them to be in conformity with accounting principles generally accepted
in the United States of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheets
and consolidated statements of capitalization of Northeast Utilities and
subsidiaries as of December 31, 2003 and 2002, and the related consolidated
statements of income, comprehensive income, shareholders' equity, cash
flows, and income taxes for each of the three years in the period ended
December 31, 2003 (not presented herein) and in our report dated February 23,
2004, we expressed an unqualified opinion (which includes an explanatory
paragraph with respect to the Company's adoption in 2001 of Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities" as amended, its adoption in 2003 of
Emerging Issues Task Force Issue 03-11, "Reporting Realized Gains and Losses
on Derivative Instruments that are Subject to FASB Statement No. 133 and not
'Held for Trading Purposes' as Defined in Issue No. 02-3," and Financial
Accounting Standards Board Interpretation No. 46, "Consolidation of Variable
Interest Entities," and its adoption in 2002 of SFAS No. 142 "Goodwill and
Other Intangible Assets") on those consolidated financial statements.  In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 2003 is fairly stated, in all
material respects, in relation to the consolidated balance sheet from
which it has been derived.

/s/  Deloitte & Touche LLP
     Deloitte & Touche LLP

Hartford, Connecticut
May 7, 2004





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


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (All Companies)

     A.   Presentation

          The accompanying unaudited financial statements should be read in
          conjunction with this complete report on Form 10-Q and the Annual
          Reports of Northeast Utilities (NU or the company), The Connecticut
          Light and Power Company (CL&P), Public Service Company of New
          Hampshire (PSNH), and Western Massachusetts Electric Company
          (WMECO), which were filed as part of the NU 2003 Form 10-K, and the
          current reports on Form 8-K dated January 22, 2004 and March 30,
          2004.  The accompanying financial statements contain, in the
          opinion of management, all adjustments necessary to present fairly
          NU's and the above companies' financial position at March 31, 2004
          and the results of operations and cash flows for the three-month
          periods ended March 31, 2004 and 2003.  All adjustments are of a
          normal, recurring nature except those described in Note 1B.  Due
          primarily to the seasonality of NU's business and to the quarterly
          earnings profile of the merchant energy business segment in 2004,
          the results of operations and statements of cash flows for the
          three-month periods ended March 31, 2004 and 2003, are not
          indicative of the results expected for a full year.

          The consolidated financial statements of NU and of its
          subsidiaries, as applicable, include the accounts of all their
          respective subsidiaries.  Intercompany transactions have been
          eliminated in consolidation.

          The preparation of financial statements in conformity with
          accounting principles generally accepted in the United States of
          America requires management to make estimates and assumptions that
          affect the reported amounts of assets and liabilities and
          disclosure of contingent 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.

          Certain reclassifications of prior period data have been made to
          conform with the current period presentation.  Reclassifications
          have been made to the accompanying consolidated balance sheets and
          statements of cash flows.

     B.   New Accounting Standards

          Consolidation of Variable Interest Entities: In December 2003, the
          Financial Accounting Standards Board (FASB) issued a revised
          version of FASB Interpretation No. (FIN) 46, "Consolidation of
          Variable Interest Entities," (FIN 46R).  FIN 46R was effective for
          NU for the first quarter of 2004 and did not have an impact on any
          of NU's previously identified variable interest entities (VIE).
          Based on management's review of NU's independent power producer (IPP)
          contracts, no new VIEs have been identified.

     C.   Guarantees

          NU provides credit assurance in the form of guarantees and letters
          of credit (LOCs) in the normal course of business, primarily for
          the financial performance obligations of NU Enterprises.  NU would
          be required to perform under these guarantees in the event of non-
          performance by NU Enterprises, primarily Select Energy, Inc.
          (Select Energy).  At March 31, 2004, the maximum level of exposure
          in accordance with FIN 45, "Guarantor's Accounting and Disclosure
          Requirements for Guarantees, Including Indirect Guarantees of
          Indebtedness of Others," under guarantees by NU, primarily on
          behalf of NU Enterprises, totaled $748.1 million.  Additionally, NU
          had $63.8 million of LOCs issued for the benefit of NU Enterprises
          outstanding at March 31, 2004.  In conjunction with its investment
          in R. M. Services, Inc. (RMS), NU guarantees a $3 million line of
          credit through 2005, of which $2.2 million was outstanding at March
          31, 2004, and is included in the $748.1 million of total guarantees
          outstanding. Effective July 1, 2003, the financial statements of
          RMS, including its line of credit balance, are consolidated with
          NU's financial statements.

          CL&P has obtained surety bonds in the amount of $31.1 million
          related to the collection of March 2003 and April 2003 incremental
          locational marginal pricing (LMP) costs in compliance with a
          Connecticut Department of Public Utility Control (DPUC) order.  On
          April 30, 2004, the DPUC approved CL&P's request to remove this
          surety bond requirement prior to renewal.  At March 31, 2004, NU
          had outstanding guarantees primarily to the Utility Group of $42.3
          million, including the LMP-related surety bonds.  This amount is
          included in the total outstanding NU guarantee amount of $748.1
          million.

          Several underlying contracts that NU guarantees and certain surety
          bonds contain credit ratings triggers that would require NU to post
          collateral in the event that NU's credit ratings are downgraded.

          NU currently has authorization from the Securities and Exchange
          Commission (SEC) to provide up to $500 million of guarantees for NU
          Enterprises through June 30, 2004, and has applied for authority to
          increase this amount to $750 million through September 30, 2007.
          The guarantees to the Utility Group are subject to a separate $50
          million SEC limitation apart from the current $500 million
          guarantee limit.  The amount of guarantees outstanding for
          compliance with the SEC limit for NU Enterprises and RMS is $309
          million, which is calculated using different, more probabilistic
          and fair-value based criteria than the maximum level of exposure
          required to be disclosed under FIN 45.

     D.   Unbilled Revenues

          Unbilled revenues represent an estimate of electricity or gas
          delivered to customers that has not been billed.  Unbilled revenues
          represent assets on the balance sheet that become accounts receivable
          in the following month as customers are billed.  Billed revenues are
          based on meter readings, whereas unbilled revenues are based on
          estimates of electricity and gas delivered to customers.  Such
          estimates are subject to adjustment when actual meter readings become
          available, when changes in estimating methodology occur and under
          other circumstances.

     E.   Regulatory Accounting

          The accounting policies of NU's Utility Group conform to accounting
          principles generally accepted in the United States of America
          applicable to rate-regulated enterprises and historically reflect
          the effects of the rate-making process in accordance with Statement
          of Financial Accounting Standards (SFAS) No. 71, "Accounting for
          the Effects of Certain Types of Regulation."

          The transmission and distribution businesses of CL&P, PSNH and
          WMECO, along with PSNH's generation business and Yankee Gas
          Services Company's (Yankee Gas) distribution business, continue to
          be cost-of-service rate regulated, and management believes that the
          application of SFAS No. 71 to those business portions of the
          aforementioned companies continues to be appropriate.  Management
          also believes that it is probable that NU's operating companies
          will recover their investments in long-lived assets, including
          regulatory assets.  In addition, all material net regulatory assets
          are earning an equity return, except for securitized regulatory
          assets, which are not supported by equity.

          Regulatory Assets:  The components of regulatory assets are as
          follows:

  --------------------------------------------------------------------------
                                            At March 31, 2004
  --------------------------------------------------------------------------
                                       NU
  (Millions of Dollars)           Consolidated      CL&P     PSNH     WMECO
  --------------------------------------------------------------------------
  Recoverable nuclear costs        $   64.9      $    1.2    $ 32.4    $ 31.3
  Securitized assets                1,614.1       1,089.2     454.5      70.4
  Income taxes, net                   248.0         144.8      43.1      58.6
  Unrecovered contractual
    obligations                       370.9         218.4      68.0      84.5
  Recoverable energy costs            263.2         47.2      212.5       3.5
  Other                               360.9         139.1     156.2      17.7
  ----------------------------------------------------------------------------
  Totals                           $2,922.0      $1,639.9    $966.7    $266.0
  ----------------------------------------------------------------------------

  ----------------------------------------------------------------------------
                                         At December 31, 2003
  ----------------------------------------------------------------------------
                                       NU
  (Millions of Dollars)           Consolidated      CL&P     PSNH     WMECO
  ----------------------------------------------------------------------------
  Recoverable nuclear costs        $   82.4      $   16.4    $ 33.3    $ 32.7
  Securitized assets                1,664.0       1,123.7     465.3      75.0
  Income taxes, net                   253.8         140.9      44.2      60.1
  Unrecovered contractual
    obligations                       378.6         221.8      69.9      86.9
  Recoverable energy costs            255.7          30.1     218.3       3.7
  Other                               339.5         140.1     138.4       9.8
  ----------------------------------------------------------------------------
  Totals                           $2,974.0      $1,673.0    $969.4    $268.2
  ----------------------------------------------------------------------------

          At March 31, 2004 and December 31, 2003, NU also maintained $49.4
          million and $63.4 million, respectively, of additional other
          regulatory assets, associated with Yankee Gas' income taxes, net
          and other regulatory assets related to environmental clean-up costs
          and hardship receivables.

          Additionally, NU had approximately $13 million and approximately
          $12 million of regulatory assets at March 31, 2004 and December 31,
          2003, respectively, that are included in deferred debits and other
          assets - other on the accompanying consolidated balance sheets.
          These amounts represent regulatory assets that have not yet been
          approved by the applicable regulatory agency.  Management believes
          these assets are recoverable in future rates.

          Regulatory Liabilities:  The Utility Group maintained $1.2 billion
          of regulatory liabilities at both March 31, 2004 and December 31,
          2003.  These amounts are comprised of the following:

     --------------------------------------------------------------------------
                                            At March 31, 2004
     --------------------------------------------------------------------------
                                     NU
     (Millions of Dollars)      Consolidated     CL&P     PSNH      WMECO
     --------------------------------------------------------------------------
     Cost of removal             $  334.2      $149.5    $ 87.9     $25.1
     CTA, GSC and SBC
       overcollections              325.4       325.4       -          -
     SCRC overcollections           172.4          -      172.4        -
     Regulatory liabilities
       offsetting Utility
       Group derivative assets      147.1       146.9       0.2        -
     LMP overcollections             83.8        83.8        -         -
     Other                          155.3        72.6      23.3       6.9
     --------------------------------------------------------------------------
     Totals                      $1,218.2      $778.2    $283.8     $32.0
     --------------------------------------------------------------------------

     --------------------------------------------------------------------------
                                        At December 31, 2003
     --------------------------------------------------------------------------
                                     NU
     (Millions of Dollars)      Consolidated     CL&P     PSNH      WMECO
     --------------------------------------------------------------------------
     Cost of removal             $  334.0      $150.0    $ 88.0     $25.0
     CTA, GSC and SBC
       overcollections              333.7       333.7        -         -
     SCRC overcollections           160.4          -      160.4        -
     Regulatory liabilities
       offsetting Utility
       Group derivative assets      116.9       115.4       1.5        -
     LMP overcollections             83.6        83.6        -         -
     Other                          135.7        70.3      22.2      2.8
     --------------------------------------------------------------------------
     Totals                      $1,164.3      $753.0    $272.1    $27.8
     --------------------------------------------------------------------------

          At March 31, 2004 and December 31, 2003, NU also maintained $124.2
          million and $111.4 million, respectively, of additional other
          regulatory liabilities, associated with Yankee Gas' cost of
          removal, deferred gas costs, pension and other regulatory
          liabilities.

     F.   Allowance for Funds Used During Construction

          The allowance for funds used during construction (AFUDC) is a non-
          cash item that is included in the cost of Utility Group utility
          plant and represents the cost of borrowed and equity funds used to
          finance construction.  The portion of AFUDC attributable to
          borrowed funds is recorded as a reduction of other interest
          expense, and the cost of equity funds is recorded as other income
          on the consolidated statements of income:

          ---------------------------------------------------------------------
                                         For the Three Months Ended
          ---------------------------------------------------------------------
          (Millions of Dollars)       March 31, 2004      March 31, 2003
          ---------------------------------------------------------------------
          Borrowed funds                    $1.3                $1.3
          Equity funds                       1.3                 1.5
          ---------------------------------------------------------------------
          Totals                            $2.6                $2.8
          ---------------------------------------------------------------------
          Average AFUDC rates                3.4%                4.3%
          ---------------------------------------------------------------------

     G.   Equity-Based Compensation

          NU maintains an Employee Stock Purchase Plan and other long-term,
          equity-based incentive plans under the Northeast Utilities
          Incentive Plan.  NU accounts for these plans under the recognition
          and measurement principles of Accounting Principles Board Opinion
          (APB) No. 25, "Accounting for Stock Issued to Employees," and
          related interpretations.  No equity-based employee compensation
          cost for stock options is reflected in net income, as all options
          granted under those plans had an exercise price equal to the market
          value of the underlying common stock on the date of grant.  The
          following table illustrates the effect on net income and earnings
          per share (EPS) if NU had applied the fair value recognition
          provisions of SFAS No. 123, "Accounting for Stock-Based
          Compensation," to equity-based employee compensation:

          ---------------------------------------------------------------------
                                                For the Three Months Ended
          ---------------------------------------------------------------------
          (Millions of Dollars,                 March 31,        March 31,
          except per share amounts)                2004             2003
          ---------------------------------------------------------------------
          Net income, as reported                 $67.4            $60.2
          Total equity-based employee
            compensation expense
            determined under fair
            value-based method for all
            awards, net of related
            tax effects                             0.5              0.5
          ---------------------------------------------------------------------
          Pro forma net income                    $66.9            $59.7
          ---------------------------------------------------------------------
          EPS:
            Basic and fully
              diluted - as reported               $0.53            $0.47
            Basic and fully
              diluted - pro forma                 $0.52            $0.47
          ---------------------------------------------------------------------

          Net income as reported includes $0.6 million and $0.1 million
          expensed for restricted stock and restricted stock units for the
          three months ended March 31, 2004 and 2003, respectively.  NU
          accounts for restricted stock in accordance with APB No. 25 and
          amortizes the intrinsic value of the award over the service period.

          NU assumes an income tax rate of 40 percent to estimate the tax
          effect on total equity-based employee compensation expense
          determined under the fair value-based method for all awards.

          During the three-month period ended March 31, 2004, no stock
          options were awarded.

          On March 31, 2004, the FASB issued an exposure draft that, if
          finalized as proposed, would require NU to expense equity-based
          employee compensation under the fair value-based method beginning
          on January 1, 2005.

     H.   Sale of Customer Receivables

          CL&P has an arrangement with a financial institution under which
          CL&P can sell up to $100 million of accounts receivable and
          unbilled revenues.  At both March 31, 2004 and December 31, 2003,
          CL&P had sold accounts receivable of $80 million to the financial
          institution with limited recourse through CL&P Receivables
          Corporation (CRC), a wholly owned subsidiary of CL&P.  At March 31,
          2004, the reserve requirements calculated in accordance with the
          Receivables Purchase and Sale Agreement were $23.6 million.  This
          reserve amount is deducted from the amount of receivables eligible
          for sale at the time.  Concentrations of credit risk to the
          purchaser under this agreement with respect to the receivables are
          limited due to CL&P's diverse customer base within its service
          territory.  At March 31, 2004, amounts sold to CRC by CL&P but not
          sold to the financial institution totaling $186.8 million are
          included in investments in securitizable assets on the accompanying
          consolidated balance sheets.  This amount would be excluded from
          CL&P's assets in the event of CL&P's bankruptcy.  On July 9, 2003,
          CL&P renewed this arrangement.  This agreement expires on July 7,
          2004, and management plans to renew this agreement prior to its
          expiration.

          The transfer of receivables to the financial institution under this
          arrangement qualifies for sale treatment under SFAS No. 140,
          "Accounting for Transfers and Servicing of Financial Assets and
          Extinguishment of Liabilities - A Replacement of SFAS No. 125."

     I.   Other Investment

          Yankee Energy System, Inc. (Yankee) maintains a long-term note
          receivable from BMC Energy LLC (BMC), an operator of renewable
          energy projects.  In late-March 2004, based on revised information
          that impacts undiscounted cash flow projections and fair value
          estimates, management determined that the fair value of the note
          receivable from BMC had declined and that the note was impaired.
          As a result, management recorded an after-tax impairment charge of
          $1.5 million in the first quarter of 2004.  This charge is included
          in other income, net on the accompanying consolidated statements of
          income and disclosed in Note 1N, "Summary of Significant Accounting
          Policies - Other Income," and in the Eliminations and Other segment
          in Note 8, "Segment Information," to the consolidated financial
          statements.  Yankee's remaining note receivable from BMC totaled
          $1.5 million at March 31, 2004 and is included in other deferred
          debits and other assets on the accompanying consolidated balance
          sheets.

     J.   Cash and Cash Equivalents

          Cash and cash equivalents includes cash on hand and short-term cash
          investments that are highly liquid in nature and have original
          maturities of three months or less.  At the end of each reporting
          period, overdraft amounts are reclassified from cash and cash
          equivalents to accounts payable.

     K.   Unrestricted Cash From Counterparties

          Unrestricted cash on deposit from counterparties represents
          balances collected from counterparties resulting from Select
          Energy's credit management activities.  An offsetting liability has
          been recorded in other current liabilities for the amounts
          collected.  To the extent Select Energy requires collateral from
          counterparties, cash is held as a part of the total collateral
          required.  The right to hold such cash collateral in an
          unrestricted manner is determined by the terms of Select Energy's
          agreements.  Key factors affecting the unrestricted status of a
          portion of this cash collateral include the financial standing of
          Select Energy and its credit support provider.

     L.   Special Deposits

          Special deposits represents amounts Select Energy has on deposit
          with counterparties and brokerage firms in the amount of $4.8
          million and amounts included in escrow for Select Energy Services,
          Inc. (SESI) that have not been spent on construction projects of
          $30.7 million at March 31, 2004.  Similar amounts totaled $17
          million and $32 million at December 31, 2003, respectively.
          Special deposits at December 31, 2003 also included $30.1 million
          in escrow that PSNH funded to acquire Connecticut Valley Electric
          Company, Inc. on January 1, 2004.

     M.   Restricted Cash - LMP Costs

          Restricted cash - LMP costs represents incremental LMP cost amounts
          that have been collected by CL&P and deposited into an escrow
          account. At March 31, 2004 and December 31, 2003, restricted cash -
          LMP costs totaled $123.7 million and $93.6 million, respectively.

     N.   Other Income

          The pre-tax components of NU's other income items are as follows:

          ---------------------------------------------------------------------
                                          For the Three Months Ended
          ---------------------------------------------------------------------
          (Millions of Dollars)       March 31, 2004      March 31, 2003
          ---------------------------------------------------------------------
          Investment income                $ 3.3               $ 3.9
          Charitable donations              (1.0)               (2.3)
          AFUDC - equity funds               1.3                 1.5
          Other, net                        (1.9)               (2.5)
          ---------------------------------------------------------------------
          Totals                           $ 1.7               $ 0.6
          ---------------------------------------------------------------------

2.   DERIVATIVE INSTRUMENTS (NU, CL&P, Select Energy, Yankee Gas)

     Derivatives that are utilized for trading purposes are recorded at fair
     value with changes in fair value included in earnings.  Other contracts
     that are derivatives but do not meet the definition of a cash flow hedge
     and cannot be designated as being used for normal purchases or normal
     sales are also recorded at fair value with changes in fair value
     included in earnings. For those contracts that meet the definition of a
     derivative and meet the cash flow hedge requirements, the changes in the
     fair value of the effective portion of those contracts are generally
     recognized in accumulated other comprehensive income until the
     underlying transactions occur.  For contracts that meet the definition
     of a derivative but do not meet the hedging requirements, and for the
     ineffective portion of contracts that meet the cash flow hedge
     requirements, the changes in fair value of those contracts are
     recognized currently in earnings.  Derivative contracts designated as
     fair value hedges and the item they are hedging are both recorded at
     fair value on the consolidated balance sheets.  Derivative contracts
     that are entered into as a normal purchase or sale and are probable of
     resulting in physical delivery, and are documented as such, are recorded
     under accrual accounting.

     During the first quarter of 2004, a negative $18.3 million, net of tax,
     was reclassified from other comprehensive income in connection with the
     consummation of the underlying hedged transactions and recognized in
     earnings.  An additional $0.2 million, net of tax, was recognized in
     earnings for those derivatives that were determined to be ineffective
     and for the ineffective portion of cash flow hedges.  Also during the
     first quarter of 2004, new cash flow hedge transactions were entered
     into that hedge cash flows through 2006.  As a result of these new
     transactions and market value changes since January 1, 2004, accumulated
     other comprehensive income increased by $16.5 million, net of tax.
     Accumulated other comprehensive income at March 31, 2004, was a positive
     $41.3 million, net of tax (increase to equity), relating to hedged
     transactions, and it is estimated that $40.1 million of this net of tax
     balance will be reclassified as an increase to earnings within the next
     twelve months.  Cash flows from hedge contracts are reported in the same
     category as cash flows from the underlying hedged transaction.

     Through the first quarter of 2004 there were no changes to
     interpretations of SFAS No. 133, but the FASB continues to consider
     changes that could affect the way NU records and discloses derivative
     and hedging activities.

     The tables below summarize the derivative assets and liabilities at
     March 31, 2004.  These amounts do not include option premiums paid,
     which are recorded as prepayments and amounted to $6.5 million and $9.1
     million related to energy trading activities and $9.4 million and $7.6
     million related to marketing activities at March 31, 2004 and December 31,
     2003, respectively.  These amounts also do not include option
     premiums received, which are recorded as other current liabilities and
     amounted to $8.4 million and $12.2 million related to energy trading
     activities at March 31, 2004 and December 31, 2003, respectively.

     ---------------------------------------------------------------------
                                          At March 31, 2004
     ---------------------------------------------------------------------
     (Millions of Dollars)         Assets     Liabilities     Total
     ---------------------------------------------------------------------
     NU Enterprises:
       Trading                     $188.3       $(160.9)     $ 27.4
       Non-trading                    0.6          (0.1)        0.5
       Hedging                       81.7         (12.1)       69.6
     Utility Group - Gas:
       Non-trading                     -           (0.3)       (0.3)
       Hedging                        3.2            -          3.2
     Utility Group - Electric:
       Non-trading                  147.2         (55.1)       92.1
     NU Parent:
       Hedging                        5.7            -          5.7
     ---------------------------------------------------------------------
     Total                         $426.7       $(228.5)     $198.2
     ---------------------------------------------------------------------

     ---------------------------------------------------------------------
                                         At December 31, 2003
     ---------------------------------------------------------------------
     (Millions of Dollars)         Assets     Liabilities     Total
     ---------------------------------------------------------------------
     NU Enterprises:
       Trading                     $123.9       $ (91.4)     $ 32.5
       Non-trading                    1.6          (0.8)        0.8
       Hedging                       55.8         (12.7)       43.1
     Utility Group - Gas:
       Non-trading                    0.2          (0.2)         -
       Hedging                        2.8            -          2.8
     Utility Group - Electric:
       Non-trading                  116.9         (56.0)       60.9
     NU Parent:
       Hedging                         -           (3.6)       (3.6)
     ---------------------------------------------------------------------
     Total                         $301.2       $(164.7)     $136.5
     ---------------------------------------------------------------------

     NU Enterprises - Trading:  To gather market intelligence and utilize
     this information in risk management activities for the wholesale
     marketing activities, Select Energy conducts limited energy trading
     activities in electricity, natural gas, and oil, and therefore,
     experiences net open positions.  Select Energy manages these open
     positions with strict policies that limit its exposure to market risk
     and require daily reporting to management of potential financial
     exposures.

     Derivatives used in trading activities are recorded at fair value and
     included in the consolidated balance sheets as derivative assets or
     liabilities.  Changes in fair value are recognized in operating revenues
     in the consolidated statements of income in the period of change.  The
     net fair value positions of the trading portfolio at March 31, 2004 and
     at December 31, 2003 were assets of $27.4 million and $32.5 million,
     respectively.

     Select Energy's trading portfolio includes New York Mercantile Exchange
     (NYMEX) futures and options, the fair value of which is based on closing
     exchange prices; over-the-counter forwards and options, the fair value
     of which is based on the mid-point of bid and ask market prices; and
     bilateral contracts for the purchase or sale of electricity or natural
     gas, the fair value of which is determined using available information
     from external sources.  Select Energy's trading portfolio also includes
     transmission congestion contracts (TCC).  The fair value of TCCs
     included in the trading portfolio is based on published market data.

     NU Enterprises - Non-trading:  Non-trading derivative contracts are used
     for delivery of energy related to Select Energy's wholesale and retail
     marketing activities.  These contracts are subject to fair value
     accounting because these contracts are derivatives that cannot be
     designated as normal purchases or sales, as defined.  These contracts
     cannot be designated as normal purchases or sales either because they
     are included in the New York energy market that settles financially or
     because management did not elect the normal purchases and sales
     designation.  Changes in fair value of a negative $0.3 million of non-
     trading derivative contracts were recorded in revenues in the first
     quarter of 2004.

     Market information for TCCs included in non-trading is not available,
     and those contracts cannot be reliably valued.  Management believes the
     amounts paid for these contracts, which total $2.8 million and are
     included in premiums paid, are equal to their fair value.

     NU Enterprises - Hedging:  Select Energy utilizes derivative financial
     and commodity instruments, including futures and forward contracts, to
     reduce market risk associated with fluctuations in the price of
     electricity and natural gas purchased to meet firm sales commitments to
     certain customers.  Select Energy also utilizes derivatives, including
     price swap agreements, call and put option contracts, and futures and
     forward contracts to manage the market risk associated with a portion of
     its anticipated supply and delivery requirements.  These derivatives
     have been designated as cash flow hedging instruments and are used to
     reduce the market risk associated with fluctuations in the price of
     electricity, natural gas, or oil.  A derivative that hedges exposure to
     the variable cash flows of a forecasted transaction (a cash flow hedge)
     is initially recorded at fair value with changes in fair value recorded
     in accumulated other comprehensive income.  Cash flow hedges impact net
     income when the forecasted transaction being hedged occurs, when hedge
     ineffectiveness is measured and recorded, when the forecasted
     transaction being hedged is no longer probable of occurring, or when
     there is accumulated other comprehensive loss and the hedge and the
     forecasted transaction being hedged are in a loss position on a combined
     basis.

     Select Energy maintains natural gas service agreements with certain
     customers to supply gas at fixed prices for terms extending through
     2006.  Select Energy has hedged its gas supply risk under these
     agreements through NYMEX futures contracts.  Under these contracts,
     which also extend through 2006, the purchase price of a specified
     quantity of gas is effectively fixed over the term of the gas service
     agreements.  At March 31, 2004 the NYMEX futures contracts had notional
     values of $53.5 million and were recorded at fair value as derivative
     assets of $13.5 million.

     Select Energy maintains power swaps to hedge purchases in New England as
     well as financial gas contracts and gas futures to hedge electricity
     purchase contracts that are indexed to gas prices.  These hedging
     contracts, which are valued at the mid-point of bid and ask market
     prices, were recorded as derivative assets of $45.4 million and
     derivative liabilities of $12.7 million at March 31, 2004.

     To hedge the congestion price differences associated with LMP in the New
     England and the Pennsylvania, New Jersey, Maryland and Delaware (PJM)
     regions, Select Energy holds Financial Transmission Rights (FTR) contracts
     recorded as a derivative asset at a fair value of $1.1 million at
     March 31, 2004.

     Other hedging derivative assets, which are valued at the mid-point of
     bid and ask market prices, include forwards, futures, options and swaps
     to hedge Select Energy's basic generation service (BGS) contracts in the
     PJM region and were recorded at fair value as derivative assets of $10.9
     million at March 31, 2004.

     Select Energy New York, Inc. maintains financial power swaps to hedge
     its retail sales portfolio through 2004, which were also valued at the
     mid-point of bid and ask market prices.  These contracts were recorded
     at fair value as derivative assets of $7.1 million at March 31, 2004.

     In the first quarter of 2004, Select Energy began hedging natural gas
     inventory with gas futures that qualify as fair value hedges.  The
     changes in fair value of the futures and the hedged inventory are
     recorded on the consolidated balance sheets.

     Utility Group - Gas - Non-trading:  Yankee Gas' non-trading derivatives
     consist of firm sales contracts with options to curtail delivery.  These
     contracts are subject to fair value accounting because these contracts
     are derivatives that cannot be designated as normal purchases or sales,
     as defined, because of the optionality in their contract terms.  The net
     fair values of non-trading derivatives at March 31, 2004 were
     liabilities of $0.3 million.

     Utility Group - Gas - Hedging:  Yankee Gas maintains a master swap
     agreement with a financial counterparty to purchase gas at fixed prices.
     Under this master swap agreement, the purchase price of a specified
     quantity of gas for an unaffiliated customer is effectively fixed over
     the term of the gas service agreements with that customer for a period
     not extending beyond 2005. At March 31, 2004 the commodity swap
     agreement had a notional value of $5.3 million and was recorded at fair
     value as a derivative asset of $3.2 million.

     Utility Group - Electric - Non-trading:  CL&P has two IPP contracts to
     purchase power that contain pricing provisions that are not clearly and
     closely related to the price of power and therefore do not qualify for
     the normal purchases and sales exception to SFAS No. 133, as amended.
     The fair values of these IPP non-trading derivatives at March 31, 2004
     include a derivative asset with a fair value of $145.5 million and a
     derivative liability with a fair value of $55 million.  An offsetting
     regulatory liability and an offsetting regulatory asset were recorded,
     as these contracts are part of the stranded costs, and management
     believes that these costs will continue to be recovered or refunded in
     rates.

     To mitigate the risk associated with certain supply contracts, CL&P
     purchased FTRs.  FTRs are derivatives that do not qualify for the normal
     purchases and sales exception.  The fair value of these FTR non-trading
     derivatives at March 31, 2004 was an asset of $1.5 million.

     NU Parent - Hedging:  In March of 2003, NU parent entered into a fixed
     to floating interest rate swap on its $263 million, 7.25 percent fixed-
     rate note that matures on April 1, 2012.  As a matched-terms fair value
     hedge, the changes in fair value of the swap and the hedged debt
     instrument are recorded on the consolidated balance sheets but are equal
     and offsetting in the consolidated statements of income.  The cumulative
     change in the fair value of the hedged debt of $5.7 million is included
     as long-term debt on the consolidated balance sheets.  The resulting
     changes in interest payments made are recorded as adjustments to
     interest expense.

3.   GOODWILL AND OTHER INTANGIBLE ASSETS (Yankee Gas, NU Enterprises)

     SFAS No. 142, "Goodwill and Other Intangible Assets," requires that
     goodwill and intangible assets deemed to have indefinite useful lives be
     reviewed for impairment at least annually by applying a fair value-based
     test.  NU uses October 1 as the annual goodwill impairment testing date.
     Goodwill impairment is deemed to exist if the net book value of a
     reporting unit exceeds its estimated fair value and if the implied fair
     value of goodwill based on the estimated fair value of the reporting
     unit is less than the carrying amount. There were no impairments or
     adjustments to the goodwill balances during the three-month periods
     ended March 31, 2004 and 2003.

     NU's reporting units that maintain goodwill are generally consistent
     with the operating segments underlying the reportable segments
     identified in Note 8, "Segment Information," to the consolidated
     financial statements.  Consistent with the way management reviews the
     operating results of its reporting units, NU's reporting units under the
     NU Enterprises reportable segment include: 1) the merchant energy
     reporting unit and 2) the energy services reporting unit. The merchant
     energy unit is comprised of the operations of Select Energy, Northeast
     Generation Company (NGC) and the generation operations of Holyoke Water
     Power Company (HWP), while the energy services reporting unit is
     comprised of the operations of SESI, Northeast Generation Services
     Company (NGS) and Woods Network Services, Inc. (Woods Network).  As a
     result, NU's reporting units that maintain goodwill are as follows:  the
     Yankee Gas reporting unit, which is classified under the Utility Group -
     gas reportable segment; the merchant energy reporting unit, which is
     classified under the NU Enterprises - merchant energy reportable
     segment; and the energy services reporting unit, which is classified
     under NU Enterprises - eliminations and other.  The goodwill balances of
     these reporting units are included in the table herein.

     At March 31, 2004, NU maintained $319.9 million of goodwill that is no
     longer being amortized, $13.5 million of identifiable intangible assets
     subject to amortization and $8.5 million of intangible assets not
     subject to amortization.  At December 31, 2003, NU maintained $319.9
     million of goodwill that is no longer being amortized, $14.4 million of
     identifiable intangible assets subject to amortization and $8.5 million
     of intangible assets not subject to amortization.  A summary of NU's
     goodwill balances at March 31, 2004 and December 31, 2003, by reportable
     segment and reporting unit is as follows:

     --------------------------------------------------------------------------
     (Millions of Dollars)              March 31, 2004      December 31, 2003
     --------------------------------------------------------------------------
     Utility Group - Gas:
         Yankee Gas                          $287.6               $287.6
     NU Enterprises:
         Merchant Energy                        3.2                  3.2
         Energy Services                       29.1                 29.1
     --------------------------------------------------------------------------
     Totals                                  $319.9               $319.9
     --------------------------------------------------------------------------

     The goodwill recorded related to the acquisition of Yankee Gas is not
     being recovered from the customers of Yankee Gas.

     At March 31, 2004 and December 31, 2003, NU's intangible assets and
     related accumulated amortization, all of which related to NU
     Enterprises, consisted of the following:

     --------------------------------------------------------------------------
                                                At March 31, 2004
     --------------------------------------------------------------------------
                                         Gross      Accumulated       Net
     (Millions of Dollars)              Balance     Amortization    Balance
     --------------------------------------------------------------------------
     Intangible assets subject
       to amortization:
         Exclusivity agreement           $17.7         $ 7.9         $ 9.8
         Customer list                     6.6           2.9           3.7
         Customer backlog,
           employment related
           agreements and other            0.1           0.1            -
     --------------------------------------------------------------------------
     Totals                              $24.4         $10.9         $13.5
     --------------------------------------------------------------------------
     Intangible assets not
       subject to amortization:
         Customer relationships           $5.2
         Tradenames                        3.3
     -------------------------------------------------
     Totals                               $8.5
     -------------------------------------------------

     --------------------------------------------------------------------------
                                               At December 31, 2003
     --------------------------------------------------------------------------
                                         Gross      Accumulated       Net
     (Millions of Dollars)              Balance    Amortization     Balance
     --------------------------------------------------------------------------
     Intangible assets subject
       to amortization:
         Exclusivity agreement           $17.7         $ 7.2         $10.5
         Customer list                     6.6           2.7           3.9
         Customer backlog,
           employment related
           agreements and other            0.1           0.1            -
     --------------------------------------------------------------------------
     Totals                              $24.4         $10.0         $14.4
     --------------------------------------------------------------------------
     Intangible assets not
       subject to amortization:
         Customer relationships           $5.2
         Tradenames                        3.3
     -------------------------------------------------
     Totals                               $8.5
     -------------------------------------------------

     NU recorded amortization expense of $0.9 million for the three months
     ended March 31, 2004 and 2003, respectively, related to intangible
     assets.  Based on the current amount of intangible assets subject to
     amortization, the estimated annual amortization expense for 2004 and for
     each of the succeeding 5 years from 2005 through 2009 is $3.6 million in
     2004 through 2007 and no amortization expense in 2008 or 2009.  These
     amounts may vary as acquisitions and dispositions occur in the future.

4.   COMMITMENTS AND CONTINGENCIES

     A.   Restructuring and Rate Matters (CL&P, PSNH, WMECO)

          Connecticut:

          Impacts of Standard Market Design: On March 1, 2003, the New
          England Independent System Operator (ISO-NE) implemented Standard
          Market Design (SMD). As part of SMD, LMP is utilized to assign value
          and causation to transmission congestion and line losses.

          CL&P was billed $186 million of incremental LMP costs by its
          standard offer service suppliers, including affiliate Select
          Energy, or by ISO-NE in 2003.  CL&P and its suppliers disputed the
          responsibility for the $186 million of incremental LMP costs
          incurred.  A settlement agreement was reached among all the parties
          involved and was filed with the Federal Energy Regulatory
          Commission (FERC) on March 3, 2004. NU recorded a pre-tax loss in
          2003 of approximately $60 million (approximately $37 million after-
          tax) related to this settlement agreement.  This settlement
          agreement will not be final until it is approved by the FERC, and
          management expects to receive FERC approval of the settlement
          agreement in the first half of 2004.

          CTA and SBC Reconciliation:  On April 1, 2004, CL&P filed its
          annual Competitive Transition Assessment (CTA) and System Benefits
          Charge (SBC) reconciliation with the DPUC.  For the year ended
          December 31, 2003, total CTA revenues and excess Generation Service
          Charge (GSC) revenues exceeded the CTA revenue requirement by
          $148.3 million.  This amount was recorded as a regulatory liability
          on the accompanying consolidated balance sheets.  For the same
          period, SBC revenues exceeded the SBC revenue requirement by $25.5
          million.  Management expects a decision in this docket from the
          DPUC by the end of 2004.

          New Hampshire:

          SCRC Reconciliation Filing:  On an annual basis, PSNH files with
          the New Hampshire Public Utilities Commission (NHPUC) a Stranded
          Cost Recovery Charge (SCRC) reconciliation filing for the preceding
          calendar year.  This filing includes the reconciliation of stranded
          cost revenues with stranded costs, and transition energy service
          (TS) revenues with TS costs.  The NHPUC reviews the filing,
          including a prudence review of PSNH's generation operations.  The
          2003 SCRC filing was made on April 30, 2004.  Management does not
          expect the review of the 2003 SCRC filing to have a material effect
          on PSNH's net income or financial position.

          Massachusetts:

          Transition Cost Reconciliations: On March 31, 2003, WMECO filed its
          2002 transition cost reconciliation with the Massachusetts
          Department of Telecommunications and Energy (DTE). This filing
          reconciled the recovery of generation-related stranded costs for
          calendar year 2002 and included the renegotiated purchased power
          contract related to the Vermont Yankee nuclear unit.

          On July 15, 2003, the DTE issued a final order on WMECO's 2001
          transition cost reconciliation, which addressed WMECO's cost
          tracking mechanisms.  As part of that order, the DTE directed WMECO
          to revise its 2002 annual transition cost reconciliation filing.
          The revised filing was submitted to the DTE on September 22, 2003.
          Hearings have been held, and the timing of a final decision is
          uncertain.  Management does not expect the outcome of this docket
          to have a material adverse impact on WMECO's net income or
          financial position.

          On March 31, 2004, WMECO filed its 2003 transition cost
          reconciliation with the DTE.  This filing reconciled the recovery
          of generation-related stranded costs for calendar year 2003.  The
          timing of a final decision is uncertain.  Management does not
          expect the outcome of this docket to have a material adverse impact
          on WMECO's net income or financial position.

     B.   NRG Energy, Inc. Exposures (CL&P, Yankee Gas, NGS)

          Certain subsidiaries of NU, including CL&P and Yankee Gas, have
          entered into transactions with NRG Energy, Inc. (NRG) and certain
          of its subsidiaries.  On May 14, 2003, NRG and certain of its
          subsidiaries filed voluntary bankruptcy petitions.  On December 5,
          2003, NRG emerged from bankruptcy.  NU's NRG-related exposures as a
          result of these transactions relate to 1) the recovery of
          congestion charges incurred by NRG prior to the implementation of
          SMD on March 1, 2003, 2) the recovery of CL&P's station service
          billings from NRG, and 3) the recovery of Yankee Gas' and CL&P's
          expenditures that were incurred related to an NRG subsidiary's
          generating plant construction project that is now abandoned.  While
          it is unable to determine the ultimate outcome of these issues,
          management does not expect their resolution will have a material
          adverse effect on NU's consolidated financial condition or results
          of operations.

     C.   Long-Term Contractual Arrangements (Select Energy)

          Select Energy maintains long-term agreements to purchase energy in
          the normal course of business as part of its portfolio of resources
          to meet its actual or expected sales commitments.  The aggregate
          amount of these purchase contracts was $5.9 billion at March 31,
          2004, as follows (millions of dollars):

          ---------------------------------------------------------------------
          Year
          ---------------------------------------------------------------------
          2004                 $3,842.5
          2005                  1,372.5
          2006                    204.8
          2007                    109.1
          2008                     93.3
          Thereafter              295.6
          ---------------------------------------------------------------------
          Total                $5,917.8
          ---------------------------------------------------------------------

          Select Energy's purchase contract amounts can exceed the amount
          expected to be reported in fuel, purchased and net interchange
          power as energy trading purchases are classified net with the
          corresponding revenues.

          NU's other long-term contractual arrangements have not changed
          significantly from the amounts reported at December 31, 2003.

     D.   Deferred Contractual Obligations (NU, CL&P, PSNH, WMECO)

          The purchasers of NU's ownership shares of the Millstone, Seabrook
          and Vermont Yankee plants assumed the obligation of decommissioning
          those plants, but NU still has significant decommissioning and
          plant closure cost obligations to the companies that own the Yankee
          Atomic (YA), Connecticut Yankee (CY) and Maine Yankee (MY) nuclear
          power plants (collectively, the Yankee Companies).  Each plant has
          been shut down and is undergoing decommissioning.  The Yankee
          Companies collect decommissioning and closure costs through
          wholesale, FERC-approved rates charged under power purchase
          agreements to NU's electric utility companies CL&P, PSNH and WMECO.
          These companies in turn pass these costs on to their customers
          through state regulatory commission-approved retail rates.  YA has
          received FERC approval to collect all presently estimated
          decommissioning costs.  MY is currently negotiating a settlement
          with the FERC and others to collect its presently estimated
          decommissioning costs.

          CY's estimated decommissioning and plant closure costs for the
          period 2000 through 2023 have increased approximately $390 million
          over the April 2000 estimate of $434 million approved by the FERC
          in a rate case settlement.  The revised estimate reflects the fact
          that CY is now self-performing all work to complete the
          decommissioning of the plant due to the termination of the
          decommissioning contract with Bechtel Power Corporation in July
          2003, the increases in the projected costs of spent fuel storage,
          and increased security and liability and property insurance.  NU's
          share of CY's increased decommissioning and plant closure costs is
          approximately $191 million.  CY has not yet applied to the FERC for
          recovery of this amount.  In total, NU's estimated remaining
          decommissioning and plant closure obligation to CY is $320.7
          million.

          NU cannot at this time predict the timing or outcome of the FERC
          proceeding required for the collection of the increased
          decommissioning costs.  Management believes that these costs have
          been prudently incurred and will ultimately be recovered from the
          customers of CL&P, PSNH and WMECO.  However, there is a risk that
          some portion of these increased costs may not be recovered as a
          result of the FERC proceedings.

     E.   Consolidated Edison, Inc. Merger Litigation

          There were no material developments in the first quarter of 2004 in
          the litigation between NU and Consolidated Edison, Inc. (Con
          Edison). Certain gain and loss contingencies continue to exist with
          regard to the 1999 merger agreement between NU and Con Edison and
          the related litigation.

5.   COMPREHENSIVE INCOME (NU, CL&P, PSNH, WMECO, NU Enterprises)

     Total comprehensive income, which includes all comprehensive income
     items by category, for the three months ended March 31, 2004 and 2003 is
     as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                  Three Months Ended March 31, 2004
----------------------------------------------------------------------------------------------
                                                                             NU
(Millions of Dollars)                    NU      CL&P    PSNH    WMECO   Enterprises    Other
----------------------------------------------------------------------------------------------
<S>                                    <C>      <C>     <C>       <C>       <C>          <C>
Net income*                            $67.4    $26.2   $11.8     $3.5      $18.8        $7.1
Comprehensive income items:
  Qualified cash flow
    hedging instruments                 16.5       -       -        -        16.5          -
  Unrealized gains on securities         0.4       -       -        -          -          0.4
----------------------------------------------------------------------------------------------
Net change in comprehensive
  income items                          16.9       -       -        -        16.5         0.4
----------------------------------------------------------------------------------------------
Total comprehensive income             $84.3    $26.2   $11.8     $3.5      $35.3        $7.5
----------------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                  Three Months Ended March 31, 2003
----------------------------------------------------------------------------------------------
                                                                             NU
(Millions of Dollars)                    NU      CL&P    PSNH    WMECO   Enterprises    Other
----------------------------------------------------------------------------------------------
<S>                                    <C>      <C>     <C>       <C>       <C>         <C>
Net income*                            $60.2    $25.3   $10.8     $6.1      $5.2        $12.8
Comprehensive income items:
  Qualified cash flow
    hedging instruments                 (3.7)      -       -        -       (2.3)        (1.4)
  Unrealized (losses)/gains
    on securities                       (0.1)     0.4     0.6      0.1        -          (1.2)
----------------------------------------------------------------------------------------------
Net change in comprehensive
  (loss)/income items                   (3.8)     0.4     0.6      0.1      (2.3)        (2.6)
----------------------------------------------------------------------------------------------
Total comprehensive income             $56.4    $25.7   $11.4     $6.2      $2.9        $10.2
----------------------------------------------------------------------------------------------
</TABLE>

    *Net income after preferred dividends of subsidiaries.

     Amounts included in the Other column primarily relate to NU parent and
     Northeast Utilities Service Company (NUSCO).

     Accumulated other comprehensive income fair value adjustments in NU's
     qualified cash flow hedging instruments are as follows:

     --------------------------------------------------------------------------
                                             At March 31,     At December 31,
     (Millions of Dollars, Net of Tax)           2004               2003
     --------------------------------------------------------------------------
     Balance at beginning of period             $24.8              $15.5
     Hedged transactions recognized
       into earnings                            (18.3)              (5.3)
     Change in fair value                        30.8                5.0
     Cash flow transactions entered
       into for the period                        4.0                9.6
     --------------------------------------------------------------------------
     Net change associated with the
       current period hedging transactions       16.5                9.3
     --------------------------------------------------------------------------
     Total fair value adjustments included
       in accumulated other
       comprehensive income                     $41.3              $24.8
     --------------------------------------------------------------------------

     Accumulated other comprehensive income items unrelated to NU's qualified
     cash flow hedging instruments totaled $1.6 million and $1.2 million in
     gains at March 31, 2004 and December 31, 2003, respectively.  These
     amounts primarily relate to unrealized gains on investments in
     marketable debt and equity securities, net of related income taxes.

6.   EARNINGS PER SHARE (NU)

     EPS is computed based upon the weighted average number of common shares
     outstanding during each period.  Diluted EPS is computed on the basis of
     the weighted average number of common shares outstanding plus the
     potential dilutive effect if certain securities are converted into
     common stock.  At March 31, 2004 and 2003, 655,326 options and 3,226,913
     options, respectively, were excluded from the following table as these
     options were antidilutive.  The following table sets forth the
     components of basic and fully diluted EPS:

     --------------------------------------------------------------------------
     (Millions of Dollars,                    Three Months Ended March 31,
     Except for Share Information)               2004              2003
     --------------------------------------------------------------------------
     Income before preferred
       dividends of subsidiaries                $68.8             $61.6
     Preferred dividends
       of subsidiaries                            1.4               1.4
     --------------------------------------------------------------------------
     Net income                                 $67.4             $60.2
     --------------------------------------------------------------------------
     Basic EPS common shares
       outstanding (average)              127,879,766       127,013,678
     Dilutive effects of employee
       stock options                          181,320            97,594
     --------------------------------------------------------------------------
     Fully diluted EPS common shares
       outstanding (average)              128,061,086       127,111,272
     --------------------------------------------------------------------------
     Basic and fully diluted EPS                $0.53             $0.47
     --------------------------------------------------------------------------

7.   PENSION  BENEFITS AND POSTRETIREMENT BENEFITS OTHER THAN  PENSIONS  (All
     Companies)

     NU's subsidiaries participate in a uniform noncontributory defined
     benefit retirement plan (Pension Plan) covering substantially all
     regular NU employees and also provide certain health care benefits,
     primarily medical and dental, and life insurance benefits through a
     benefit plan to retired employees (PBOP Plan). The components of net
     periodic benefit expense/(income) for the Pension Plan and the PBOP Plan
     for the three months ended March 31, 2004 and 2003 are estimated as
     follows:

     --------------------------------------------------------------------------
                                   For the Three Months Ended March 31,
     --------------------------------------------------------------------------
                              Pension Benefits         Postretirement Benefits
     --------------------------------------------------------------------------
     (Millions of Dollars)     2004        2003            2004        2003
     --------------------------------------------------------------------------
     Service cost             $ 9.9      $  8.8           $ 1.5       $ 1.3
     Interest cost             29.5        29.3             6.3         6.7
     Expected return
       on plan assets         (43.7)      (45.6)           (3.1)       (3.7)
     Amortization of
       unrecognized net
       transition
       (asset)/obligation      (0.4)       (0.4)            3.0         3.0
     Amortization of
       prior service cost       1.8         1.8            (0.1)       (0.1)
     Amortization of
       actuarial loss/(gain)    3.6        (1.8)             -           -
     Other amortization, net     -           -              2.7         1.6
     --------------------------------------------------------------------------
     Total - net periodic
       expense/(income)       $ 0.7       $(7.9)          $10.3       $ 8.8
     --------------------------------------------------------------------------

     A portion of these expenses/(income) is capitalized related to employees
     working on capital projects.

     NU does not expect to make any contributions to the Pension Plan in
     2004.  NU continues to anticipate contributing approximately $10.3
     million quarterly totaling $41 million in 2004 to fund its PBOP Plan.

     As a result of ongoing litigation with nineteen former employees, in
     April 2004 NU was ordered by the court to modify its retirement plan to
     include special retirement benefits for fifteen of these former
     employees retroactive to the dates of their retirement.  As NU appealed
     the ruling, these amounts are not included in the pension and PBOP
     information above.

     There is no immediate impact of the court order, and if NU is ultimately
     required to provide retroactive benefits, then the amount of the
     benefits would be recorded as a pension plan amendment, which would be
     amortized as a prior service cost and would increase pension expense
     over a 13-year amortization period.

     For further information regarding this matter, See Part II - Item 1.
     "Legal Proceedings," included in this combined report on Form 10-Q.

8.   SEGMENT INFORMATION (All Companies)

     NU is organized between the Utility Group and NU Enterprises businesses
     based on a combination of factors, including the characteristics of each
     business' products and services, the sources of operating revenues and
     expenses and the regulatory environment in which they operate.  Based on
     enhanced information that is reviewed by NU's chief operating decision
     maker, separate detailed information regarding the Utility Group's
     transmission businesses and NU Enterprises' merchant energy business is
     now included in the following segment information.  Segment information
     for all periods has been restated to conform to the current presentation
     except for total asset information for the transmission business
     segment.

     The Utility Group segment, including both the regulated electric
     distribution and transmission businesses, as well as the gas
     distribution business comprised of Yankee Gas, represents approximately
     68 percent and 75 percent of NU's total revenues for the three months
     ended March 31, 2004 and 2003, respectively, and includes the operations
     of the regulated electric utilities, CL&P, PSNH and WMECO, whose
     complete financial statements are included in NU's combined report on
     Form 10-Q.  PSNH's distribution segment includes generation activities.
     Also included in this combined report on Form 10-Q is detailed
     information regarding CL&P's, PSNH's, and WMECO's transmission
     businesses.  Utility Group revenues from the sale of electricity and
     natural gas primarily are derived from residential, commercial and
     industrial customers and are not dependent on any single customer.

     The NU Enterprises merchant energy business segment includes Select
     Energy, NGC, the generation operations of HWP, and their respective
     subsidiaries, while the eliminations and other business segment includes
     SESI, NGS, Woods Network, and their respective subsidiaries and
     intercompany eliminations.  The results of NU Enterprises parent are
     also included within eliminations and other.

     Effective January 1, 2004, Select Energy began serving a portion of
     CL&P's transitional standard offer (TSO) load for 2004.  Total Select
     Energy revenues from CL&P for CL&P's standard offer load, TSO load and
     for other transactions with CL&P, represented approximately $179 million
     or 22 percent for the three months ended March 31, 2004 and
     approximately $177 million or 29 percent for the three months ended
     March 31, 2003, of total NU Enterprises' revenues.  Total CL&P purchases
     from NU Enterprises are eliminated in consolidation.

     Additionally, WMECO's purchases from Select Energy for standard offer
     and default service and for other transactions with Select Energy
     represented approximately $32 million and $39 million of total NU
     Enterprises' revenues for the three months ended March 31, 2004 and
     2003, respectively.  Total WMECO purchases from NU Enterprises are
     eliminated in consolidation.

     Select Energy revenues related to contracts with NSTAR represented $88.7
     million or 11 percent of total NU Enterprises' revenues for the three
     months ended March 31, 2004.  Select Energy also provides BGS in the New
     Jersey market.  Select Energy revenues related to these contracts
     represented $110 million or 16 percent of total NU Enterprises' revenues
     for the three months ended March 31, 2003.  No other individual
     customer, including BGS, represented in excess of 10 percent of NU
     Enterprises' revenues for the three months ended March 31, 2004 or 2003.

     Eliminations and other in the NU consolidated following tables includes
     the results for Mode 1 Communications, Inc., an investor in a fiber-
     optic communications network, the results of the nonenergy-related
     subsidiaries of Yankee Energy System, Inc., (Yankee Energy Services
     Company, RMS, Yankee Energy Financial Services, and NorConn Properties,
     Inc.) the results of NU's parent and service companies, and the
     company's investment in Acumentrics Corporation.  Interest expense
     included in eliminations and other primarily relates to the debt of NU
     parent.  Inter-segment eliminations of revenues and expenses are also
     included in eliminations and other.  Eliminations and other includes
     NU's investment in RMS, which was consolidated with NU effective July 1,
     2003.

     NU's segment information for the three months ended March 31, 2004 and
     2003 is as follows (some amounts between segment schedules may not agree
     due to rounding):

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                                            For the Three Months Ended March 31, 2004
------------------------------------------------------------------------------------------------
                               Utility Group
                     -------------------------------------
                          Distribution
(Millions of         ---------------------     Regulated       NU        Eliminations
Dollars)             Electric       Gas      Transmission  Enterprises     and Other   Totals
------------------------------------------------------------------------------------------------
<S>                  <C>          <C>          <C>          <C>            <C>        <C>
Operating revenues   $1,059.7     $  171.2     $  31.1      $  796.3       $(220.0)   $1,838.3
Depreciation and
amortization           (110.2)        (6.4)       (5.0)         (4.7)         (0.6)     (126.9)
Other
  operating
  expenses             (856.6)      (139.8)      (13.2)       (747.6)        218.6    (1,538.6)
------------------------------------------------------------------------------------------------
Operating income/
  (loss)                 92.9         25.0        12.9          44.0          (2.0)      172.8
Interest
  expense, net          (39.9)        (3.9)       (2.3)        (13.6)         (3.0)      (62.7)
Other income/
  (loss), net             3.2         (0.5)       (0.2)          1.2          (2.1)        1.6
Income tax
  (expense)/
  benefit               (20.6)        (8.7)       (3.1)        (12.8)          2.3       (42.9)
Preferred
  dividends              (1.4)          -           -             -             -         (1.4)
------------------------------------------------------------------------------------------------
Net income/(loss)    $   34.2     $   11.9     $   7.3      $   18.8       $  (4.8)   $   67.4
------------------------------------------------------------------------------------------------
Total assets (1)     $8,336.8     $1,066.2         N/A      $2,246.0       $(110.2)   $11,538.8
------------------------------------------------------------------------------------------------
Total investments
  in plant           $   97.0     $    7.8     $  24.9      $    5.7       $   2.4    $   137.8
------------------------------------------------------------------------------------------------
</TABLE>

     (1) Information for segmenting total assets between distribution and
         transmission is not available at March 31, 2004.  On a NU consolidated
         basis, these distribution and transmission assets are disclosed in the
         electric distribution column above.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                                            For the Three Months Ended March 31, 2003
------------------------------------------------------------------------------------------------
                               Utility Group
                     -------------------------------------
                          Distribution
(Millions of         ---------------------     Regulated       NU        Eliminations
Dollars)             Electric       Gas      Transmission  Enterprises     and Other   Totals
------------------------------------------------------------------------------------------------
<S>                  <C>          <C>          <C>          <C>            <C>        <C>
Operating revenues   $1,010.3     $  151.0     $   31.2     $  612.9       $(221.2)   $1,584.2
Depreciation and
amortization           (130.3)        (5.7)        (4.6)        (4.8)         (0.6)     (146.0)
Other
  operating
  expenses             (778.2)      (114.9)       (13.2)      (588.1)        220.2    (1,274.2)
------------------------------------------------------------------------------------------------
Operating income/
  (loss)                101.8         30.4         13.4         20.0          (1.6)      164.0
Interest
  expense, net          (42.4)        (3.2)        (1.3)       (11.2)         (5.5)      (63.6)
Other(loss)/
  income, net            (0.4)        (0.5)        (0.1)         0.6           1.0         0.6
Income tax
  (expense)/
  benefit               (23.4)       (10.9)        (4.0)        (4.2)          3.1       (39.4)
Preferred
  dividends              (1.4)          -            -            -             -         (1.4)
------------------------------------------------------------------------------------------------
Net income/(loss)    $   34.2     $   15.8     $    8.0     $    5.2       $  (3.0)   $   60.2
------------------------------------------------------------------------------------------------
Total investments
  in plant           $   68.5     $    8.9     $   13.7     $    5.0        $   0.7   $   96.8
------------------------------------------------------------------------------------------------
</TABLE>

     Utility Group segment information related to the regulated electric
     distribution and transmission businesses for CL&P, PSNH and WMECO for the
     three months ended March 31, 2004 and 2003 is as follows:

     ---------------------------------------------------------------------
              CL&P - For the Three Months Ended March 31, 2004
     ---------------------------------------------------------------------
     (Millions of
       Dollars)                Distribution    Transmission     Totals
     ---------------------------------------------------------------------
     Operating revenues          $  727.7        $   21.0      $  748.7
     Depreciation and
       amortization                 (53.9)           (3.6)        (57.5)
     Other
       operating
       expenses                    (618.2)           (8.7)       (626.9)
     ---------------------------------------------------------------------
     Operating income                55.6             8.7          64.3
     Interest
       expense, net                 (25.5)           (1.6)        (27.1)
     Other income/
       (loss), net                    5.2            (0.1)          5.1
     Income tax
       expense                      (12.8)           (1.9)        (14.7)
     Preferred
       dividends                     (1.4)             -           (1.4)
     ---------------------------------------------------------------------
     Net income                  $   21.1        $    5.1      $   26.2
     ---------------------------------------------------------------------
     Total investments
       in plant                  $   60.9        $   19.7      $   80.6
     ---------------------------------------------------------------------

     ---------------------------------------------------------------------
              CL&P - For the Three Months Ended March 31, 2003
     ---------------------------------------------------------------------
     (Millions of
       Dollars)                Distribution    Transmission     Totals
     ---------------------------------------------------------------------
     Operating revenues          $   686.1       $   19.8      $  705.9
     Depreciation and
       amortization                  (76.8)          (3.4)        (80.2)
     Other
       operating
       expenses                     (547.5)          (9.1)       (556.6)
     ---------------------------------------------------------------------
     Operating income                 61.8            7.3          69.1
     Interest
       expense, net                  (27.7)          (1.0)        (28.7)
     Other income/
       (loss), net                     0.9           (0.2)          0.7
     Income tax
       expense                       (12.6)          (1.8)        (14.4)
     Preferred
       dividends                      (1.4)            -           (1.4)
     ---------------------------------------------------------------------
     Net income                  $    21.0       $    4.3      $   25.3
     ---------------------------------------------------------------------
     Total investments
       in plant                  $    46.4       $   10.0      $   56.4
     ---------------------------------------------------------------------

     ---------------------------------------------------------------------
                PSNH - For the Three Months Ended March 31, 2004
     ---------------------------------------------------------------------
     (Millions of
       Dollars)                Distribution    Transmission     Totals
     ---------------------------------------------------------------------
     Operating revenues          $   237.7       $    6.5      $  244.2
     Depreciation and
       amortization                  (45.9)          (0.8)        (46.7)
     Other
       operating
       expenses                     (163.0)          (3.0)       (166.0)
     ---------------------------------------------------------------------
     Operating income                 28.8            2.7          31.5
     Interest
       expense, net                  (10.9)          (0.4)        (11.3)
     Other loss, net                  (1.7)            -           (1.7)
     Income tax
       expense                        (5.9)          (0.8)         (6.7)
     ---------------------------------------------------------------------
     Net income                  $    10.3       $    1.5      $   11.8
     ---------------------------------------------------------------------
     Total investments
       in plant                  $    28.7       $    5.1      $   33.8
     ---------------------------------------------------------------------

     ---------------------------------------------------------------------
                PSNH - For the Three Months Ended March 31, 2003
     ---------------------------------------------------------------------
     (Millions of
       Dollars)                Distribution    Transmission     Totals
     ---------------------------------------------------------------------
     Operating revenues          $  223.6        $    7.2      $  230.8
     Depreciation and
       amortization                 (36.7)           (0.7)        (37.4)
     Other
       operating
       expenses                    (159.3)           (2.7)       (162.0)
     ---------------------------------------------------------------------
     Operating income                27.6             3.8          31.4
     Interest
       expense, net                 (11.3)           (0.2)        (11.5)
     Other (loss)/
       income, net                   (1.3)            0.1          (1.2)
     Income tax
       expense                       (6.6)           (1.3)         (7.9)
     ---------------------------------------------------------------------
     Net income                  $    8.4        $    2.4      $   10.8
     ---------------------------------------------------------------------
     Total investments
       in plant                  $   17.8        $    3.6      $   21.4
     ---------------------------------------------------------------------

     ---------------------------------------------------------------------
                WMECO - For the Three Months Ended March 31, 2004
     ---------------------------------------------------------------------
     (Millions of
       Dollars)                Distribution    Transmission     Totals
     ---------------------------------------------------------------------
     Operating revenues          $   94.3        $    3.6      $   97.9
     Depreciation and
       amortization                 (10.5)           (0.4)        (10.9)
     Other
       operating
       expenses                     (75.4)           (1.6)        (77.0)
     ---------------------------------------------------------------------
     Operating income                 8.4             1.6          10.0
     Interest
       expense, net                  (3.5)           (0.3)         (3.8)
     Other loss, net                 (0.3)             -           (0.3)
     Income tax
       expense                       (1.9)           (0.5)         (2.4)
     ---------------------------------------------------------------------
     Net income                  $    2.7        $    0.8      $    3.5
     ---------------------------------------------------------------------
     Total investments
       in plant                  $    7.4        $    0.1      $    7.5
     ---------------------------------------------------------------------

     ---------------------------------------------------------------------
                WMECO - For the Three Months Ended March 31, 2003
     ---------------------------------------------------------------------
     (Millions of
       Dollars)                Distribution    Transmission     Totals
     ---------------------------------------------------------------------
     Operating revenues          $  100.6        $    4.2      $  104.8
     Depreciation and
       amortization                 (16.8)           (0.4)        (17.2)
     Other
       operating
       expenses                     (71.5)           (1.4)        (72.9)
     ---------------------------------------------------------------------
     Operating income                12.3             2.4          14.7
     Interest
       expense, net                  (3.4)           (0.1)         (3.5)
     Income tax
       expense                       (4.2)           (0.9)         (5.1)
     ---------------------------------------------------------------------
     Net income                  $    4.7        $    1.4      $    6.1
     ---------------------------------------------------------------------
     Total investments
       in plant                  $    4.3        $    0.1      $    4.4
     ---------------------------------------------------------------------

     NU Enterprises' segment information for the three months ended March 31,
     2004 and 2003 is as follows:

     --------------------------------------------------------------------------
           NU Enterprises - For the Three Months Ended March 31, 2004
     --------------------------------------------------------------------------
     (Millions of)                              Eliminations
       Dollars)             Merchant Energy      and Other          Totals
     --------------------------------------------------------------------------
     Operating revenues         $ 734.4           $   61.9         $  796.3
     Depreciation and
       amortization                (4.2)              (0.5)            (4.7)
     Other
       operating
       expenses                  (686.9)             (60.7)          (747.6)
     --------------------------------------------------------------------------
     Operating income              43.3                0.7             44.0
     Interest
       expense, net               (11.1)              (2.5)           (13.6)
     Other (loss)/
       income, net                 (0.2)               1.4              1.2
     Income tax
       (expense)/
       benefit                    (12.9)               0.1            (12.8)
     --------------------------------------------------------------------------
     Net income/(loss)          $   19.1          $   (0.3)        $   18.8
     --------------------------------------------------------------------------
     Total assets               $1,956.5          $  289.5         $2,246.0
     --------------------------------------------------------------------------
     Total investments
       in plant                 $    4.7          $    1.0         $    5.7
     --------------------------------------------------------------------------

     --------------------------------------------------------------------------
           NU Enterprises - For the Three Months Ended March 31, 2003
     --------------------------------------------------------------------------
     (Millions of)                              Eliminations
       Dollars)             Merchant Energy      and Other          Totals
     --------------------------------------------------------------------------
     Operating revenues         $  563.0          $   49.9         $  612.9
     Depreciation and
       amortization                 (4.3)             (0.5)            (4.8)
     Other
       operating
       expenses                   (538.9)            (49.2)          (588.1)
     --------------------------------------------------------------------------
     Operating income               19.8               0.2             20.0
     Interest
       expense, net                 (9.8)             (1.4)           (11.2)
     Other (loss)/
       income, net                  (1.1)              1.7              0.6
     Income tax
       expense                      (4.0)             (0.2)            (4.2)
     --------------------------------------------------------------------------
     Net income                 $    4.9          $    0.3         $    5.2
     --------------------------------------------------------------------------
     Total investments
       in plant                 $    4.5          $    0.5         $    5.0
     --------------------------------------------------------------------------




THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                             March 31,         December 31,
                                                               2004                2003
                                                         ----------------    ----------------
                                                                (Thousands of Dollars)
<S>                                                      <C>                 <C>
ASSETS
------

Current Assets:
  Cash                                                   $              1    $          5,814
  Restricted cash - LMP costs                                     123,681              93,630
  Investments in securitizable assets                             186,821             166,465
  Receivables, net                                                 54,422              60,759
  Accounts receivable from affiliated companies                    88,308              73,986
  Unbilled revenues                                                 6,491               6,961
  Materials and supplies, at average cost                          31,934              31,583
  Derivative assets                                               146,943             115,370
  Prepayments and other                                            18,567              12,521
                                                         ----------------    ----------------
                                                                  657,168             567,089
                                                         ----------------    ----------------
Property, Plant and Equipment:
  Electric utility                                              3,415,572           3,355,794
     Less: Accumulated depreciation                             1,033,195           1,018,173
                                                         ----------------    ----------------
                                                                2,382,377           2,337,621
  Construction work in progress                                   236,635             224,277
                                                         ----------------    ----------------
                                                                2,619,012           2,561,898
                                                         ----------------    ----------------

Deferred Debits and Other Assets:
  Regulatory assets                                             1,639,935           1,673,010
  Prepaid pension                                                 308,695             305,320
  Other                                                           102,817              99,577
                                                         ----------------    ----------------
                                                                2,051,447           2,077,907
                                                         ----------------    ----------------

Total Assets                                             $      5,327,627    $      5,206,894
                                                         ================    ================

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



THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                             March 31,         December 31,
                                                               2004                2003
                                                         ----------------    ----------------
                                                                (Thousands of Dollars)
<S>                                                      <C>                 <C>
LIABILITIES AND CAPITALIZATION
------------------------------

Current Liabilities:
  Notes payable to affiliated companies                  $        160,525    $         91,125
  Accounts payable                                                250,107             138,155
  Accounts payable to affiliated companies                        149,125             176,948
  Accrued taxes                                                    26,151              65,587
  Accrued interest                                                 10,845              10,361
  Derivative liabilities                                           54,960              54,566
  Other                                                            41,560              49,674
                                                         ----------------    ----------------
                                                                  693,273             586,416
                                                         ----------------    ----------------

Rate Reduction Bonds                                            1,090,277           1,124,779
                                                         ----------------    ----------------
Deferred Credits and Other Liabilities:
  Accumulated deferred income taxes                               623,971             609,068
  Accumulated deferred investment tax credits                      90,243              90,885
  Deferred contractual obligations                                309,310             318,043
  Regulatory liabilities                                          778,221             752,992
  Other                                                            77,650              79,935
                                                         ----------------    ----------------
                                                                1,879,395           1,850,923
                                                         ----------------    ----------------
Capitalization:
  Long-Term Debt                                                  830,644             830,149
                                                         ----------------    ----------------
  Preferred Stock - Non-Redeemable                                116,200             116,200
                                                         ----------------    ----------------
  Common Stockholder's Equity:
    Common stock, $10 par value - authorized
     24,500,000 shares; 6,035,205 shares outstanding
     in 2004 and 2003                                              60,352              60,352
    Capital surplus, paid in                                      331,573             326,629
    Retained earnings                                             326,248             311,793
    Accumulated other comprehensive loss                             (335)               (347)
                                                         ----------------    ----------------
  Common Stockholder's Equity                                     717,838             698,427
                                                         ----------------    ----------------
Total Capitalization                                            1,664,682           1,644,776
                                                         ----------------    ----------------

Commitments and Contingencies (Note 4)

Total Liabilities and Capitalization                     $      5,327,627    $      5,206,894
                                                         ================    ================

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


THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
                                                               Three Months Ended
                                                                    March 31,
                                                          ---------------------------
                                                               2004          2003
                                                          -------------- ------------
                                                             (Thousands of Dollars)

<S>                                                       <C>            <C>
Operating Revenues                                        $    748,690   $   705,916
                                                          ------------   -----------
Operating Expenses:
  Operation -
     Fuel, purchased and net interchange power                 469,657       420,205
     Other                                                      92,137        75,839
  Maintenance                                                   16,431        11,178
  Depreciation                                                  28,625        25,416
  Amortization of regulatory (liabilities)/assets, net            (560)       27,343
  Amortization of rate reduction bonds                          29,462        27,486
  Taxes other than income taxes                                 48,657        49,362
                                                          ------------   -----------
    Total operating expenses                                   684,409       636,829
                                                          ------------   -----------
Operating Income                                                64,281        69,087

Interest Expense:
  Interest on long-term debt                                     9,899        10,112
  Interest on rate reduction bonds                              16,590        18,144
  Other interest                                                   581           403
                                                          ------------   -----------
    Interest expense, net                                       27,070        28,659
                                                          ------------   -----------
Other Income, Net                                                5,067           744
                                                          ------------   -----------
Income Before Income Tax Expense                                42,278        41,172
Income Tax Expense                                              14,665        14,450
                                                          ------------   -----------
Net Income                                                $     27,613   $    26,722
                                                          ============   ===========

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



THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>

                                                                                   Three Months Ended
                                                                                        March 31,
                                                                            --------------------------------
                                                                                 2004                2003
                                                                            -------------       ------------
                                                                                  (Thousands of Dollars)
<S>                                                                          <C>                 <C>
Operating Activities:
  Net income                                                                 $    27,613         $   26,722
  Adjustments to reconcile to net cash flows
   provided by operating activities:
    Depreciation                                                                  28,625             25,416
    Deferred income taxes and investment tax credits, net                         10,851            (21,708)
    Amortization of regulatory (liabilities)/assets, net                            (560)            27,343
    Amortization of rate reduction bonds                                          29,462             27,486
    Amortization of recoverable energy costs                                     (17,112)            (6,116)
    Increase in prepaid pension                                                   (3,375)            (6,850)
    Regulatory overrecoveries                                                     15,336             48,973
    Other sources of cash                                                          3,906             14,042
    Other uses of cash                                                           (19,008)           (17,215)
  Changes in current assets and liabilities:
    Restricted cash - LMP costs                                                  (30,051)               -
    Receivables and unbilled revenues, net                                        (7,515)           (15,409)
    Materials and supplies                                                          (351)              (140)
    Investments in securitizable assets                                          (20,356)            23,149
    Other current assets                                                          (6,046)            (5,273)
    Accounts payable                                                              84,129              2,270
    Accrued taxes                                                                (39,436)            21,269
    Other current liabilities                                                     (7,645)            (7,571)
                                                                             -----------         ----------
Net cash flows provided by operating activities                                   48,467            136,388
                                                                             -----------         ----------

Investing Activities:
  Investments in plant                                                           (80,644)           (56,390)
  NU system Money Pool borrowing/(lending)                                        69,400            (28,300)
  Other investment activities                                                       (205)              (900)
                                                                             -----------         ----------
Net cash flows used in investing activities                                      (11,449)           (85,590)
                                                                             -----------         ----------

Financing Activities:
  Retirement of rate reduction bonds                                             (34,502)           (32,187)
  Capital contribution from Northeast Utilities                                    5,000                -
  Cash dividends on preferred stock                                               (1,390)            (1,390)
  Cash dividends on common stock                                                 (11,769)           (10,018)
  Other financing activities                                                        (170)              (148)
                                                                             -----------         ----------
Net cash flows used in financing activities                                      (42,831)           (43,743)
                                                                             -----------         ----------
Net (decrease)/increase in cash                                                   (5,813)             7,055
Cash - beginning of period                                                         5,814                159
                                                                             -----------         ----------
Cash - end of period                                                         $         1         $    7,214
                                                                             ===========         ==========

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



          THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

                   Management's Discussion and Analysis of
                Financial Condition and Results of Operations


CL&P is a wholly owned subsidiary of NU.  This discussion should be read in
conjunction with NU's management's discussion and analysis of financial
condition and results of operations, consolidated financial statements and
footnotes in this Form 10-Q, the current report on Form 8-K dated January 22,
2004, and the NU 2003 Form 10-K.

RESULTS OF OPERATIONS

The following table provides the variances in income statement line items for
the consolidated statements of income for CL&P included in this report on
Form 10-Q for the three months ended March 31, 2004:

                                           Income Statement Variances
                                             (Millions of Dollars)
                                             2004 over/(under) 2003
                                             ----------------------
                                             Amount         Percent
                                             ------         -------
Operating Revenues:                           $ 43              6%

Operating Expenses:
Fuel, purchased and net
  interchange power                             50             12
Other operation                                 16             21
Maintenance                                      5             47
Depreciation                                     3             13
Amortization of regulatory
(liabilities)/assets, net                      (28)            (a)
Amortization of rate
  reduction bonds                                2              7
Taxes other than income taxes                    -              -
                                               ---            ---
Total operating expenses                        48              7
                                               ---            ---

Operating income                                (5)            (7)
                                               ---            ---

Interest expense, net                           (2)            (6)
Other income/(loss), net                         4             (a)
                                               ---            ---
Income before income tax expense                 1              3
Income tax expense                               -              -
                                               ---            ---
Net Income                                     $ 1              4%
                                               ===            ===
(a) Percent greater than 100.

Comparison of the First Quarter of 2004 to the First Quarter of 2003

Operating Revenues
Operating revenues increased by $43 million in the first quarter of 2004,
compared with the same period in 2003, due to higher retail revenues ($80
million), partially offset by lower wholesale revenues ($35 million).

Retail revenues were higher due to an increase in the TSO rate ($50 million),
Federally Mandated Congestion Costs ($40 million), higher sales volume ($7
million), partially offset by the 2003 recovery of certain fuel costs ($12
million) and lower rates for the recovery of system benefit costs ($8
million).  Retail sales in the first quarter of 2004 were 2.0 percent higher
than the same period last year.  Wholesale revenues are lower due to a lower
number of wholesale transactions.

Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expense increased by $50 million in
the first quarter of 2004, primarily due to higher standard offer service
supply costs resulting from new contracts effective January 1, 2004 ($76
million), partially offset by the 2003 recovery of certain fuel costs ($12
million) and lower wholesale purchases ($14 million).

Other Operation
Other operation expenses increased $16 million in the first quarter of 2004,
primarily due to higher transmission expenses ($9 million) resulting from
higher reliability must run costs, higher administrative expense ($3 million)
primarily due to lower pension income, higher customer-related expenses ($2
million), which are due to an increase in uncollectible accounts expense as a
result of higher revenues and higher conservation and load management
expenses, and due to the 2003 positive resolution of the CL&P Millstone use
of proceeds docket ($2 million).

Maintenance
Maintenance expenses increased $5 million in the first quarter of 2004,
primarily due to the 2003 positive resolution of the CL&P Millstone use of
proceeds docket ($5 million).

Depreciation
Depreciation increased by $3 million in the first quarter of 2004 due to
higher utility plant balances and higher depreciation rates resulting from
the distribution rate case decision effective in January 2004.

Amortization of Regulatory Liabilities/Assets, Net
Amortization of regulatory liabilities/assets, net decreased by $28 million
in the first quarter of 2004 primarily due to lower amortization related to
the recovery of stranded costs ($21 million), and a reduction to amortization
expense ($7 million) resulting from the implementation of the distribution
rate case decision effective in January 2004.

Amortization of Rate Reduction Bonds
Amortization of rate reduction bonds increased by $2 million in the first
quarter of 2004 due to the repayment of a higher amount of principal
obligations.

Interest Expense
Interest expense, net decreased in the first quarter of 2004 by $2 million
primarily due to lower rate reduction bond interest resulting from lower
principal balances outstanding.

Other Income, Net
Other income, net increased $4 million in the first quarter of 2004,
primarily due to the recognition beginning in 2004 of a procurement fee ($3
million) approved in the TSO docket decision.

LIQUIDITY

CL&P's net cash flows provided by operating activities decreased to $48.5
million for the three months ended March 31, 2004 from $136.4 million for the
same period in 2003.  Cash flows provided by operating activities decreased
due to decreased regulatory overrecoveries and decreases in working capital
items, primarily restricted cash - LMP costs, investments in securitizable
assets and accrued taxes. These decreases were partially offset by an
accounts payable increase in the first quarter of 2004 resulting from TSO
supply purchases at higher prices and an increased percentage of TSO
purchases from unaffiliated suppliers.  The decrease in regulatory
overrecoveries is primarily due to lower stranded cost and generation service
collections in the first quarter of 2004 compared to 2003.  The lower level
of collections caused lower current taxable income and an increase in
deferred income taxes from 2003.

CL&P's net cash flows used in investing activities decreased to $11.4 million
for the first three months of 2004 from $85.6 million for the same period in
2003.  The decrease in investing activities is primarily due to the level of
NU Money Pool borrowings offset by higher capital expenditures during the
first quarter of 2004 as compared to the same period in 2003.

CL&P's capital expenditures totaled $80.6 million in the first three months
of 2004 compared to $56.4 million in the first three months of 2003 and are
projected to total $412 million in 2004.

The level of financing activities in 2004 included a capital contribution
from NU in the amount of $5 million.  CL&P also paid $11.8 million in
dividends to NU during the three months ended March 31, 2004 and $10 million
during the three months ended March 31, 2003.

At March 31, 2004, CL&P had no borrowings outstanding on the Utility Group's
$300 million revolving credit line.  This credit line is scheduled to mature
in November 2004 and will be renewed for at least one year.

In addition to its revolving credit line, CL&P has an arrangement with a
financial institution under which CL&P can sell up to $100 million of
accounts receivable and unbilled revenues.  At March 31, 2004 CL&P had sold
accounts receivable totaling $80 million to that financial institution.  For
more information regarding the sale of receivables, see Note 1H, "Summary of
Significant Accounting Policies - Sale of Customer Receivables" to the
consolidated financial statements.

CL&P has an application pending with the DPUC to issue up to $280 million of
long-term debt in 2004 and another $600 million for the period 2005 through
2007. The majority of that debt would be issued to finance CL&P's electric
transmission and distribution initiatives.  CL&P also has $59 million of
first mortgage bonds that can be called at a premium beginning June 1, 2004.
At March 31, 2004, CL&P had $160.5 million in short-term debt outstanding
from the NU Money Pool.



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                             March 31,         December 31,
                                                               2004                2003
                                                         ----------------    ----------------
                                                                (Thousands of Dollars)
<S>                                                        <C>               <C>
ASSETS
------

Current Assets:
  Cash                                                     $       6,065     $        2,737
  Special deposits                                                   -               30,104
  Receivables, net                                                71,575             67,121
  Accounts receivable from affiliated companies                   17,301             11,291
  Unbilled revenues                                               41,623             39,220
  Fuel, materials and supplies, at average cost                   56,395             54,533
  Derivative assets                                                  210              1,510
  Prepayments and other                                            1,739              9,945
                                                           -------------     --------------
                                                                 194,908            216,461
                                                           -------------     --------------

Property, Plant and Equipment:
  Electric utility                                             1,545,495          1,517,513
  Other                                                            5,707              5,707
                                                           -------------     --------------
                                                               1,551,202          1,523,220
     Less: Accumulated depreciation                              646,267            635,029
                                                           -------------     --------------
                                                                 904,935            888,191
  Construction work in progress                                   43,765             37,401
                                                           -------------     --------------
                                                                 948,700            925,592
                                                           -------------     --------------
Deferred Debits and Other Assets:
  Regulatory assets                                              966,652            969,434
  Other                                                           60,578             60,324
                                                           -------------     --------------
                                                               1,027,230          1,029,758
                                                           -------------     --------------
Total Assets                                               $   2,170,838     $    2,171,811
                                                           =============     ==============

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



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                             March 31,         December 31,
                                                               2004                2003
                                                         ----------------    ----------------
                                                                (Thousands of Dollars)
<S>                                                        <C>               <C>

LIABILITIES AND CAPITALIZATION
------------------------------

Current Liabilities:
  Notes payable to banks                                   $          -      $       10,000
  Notes payable to affiliated companies                            35,000            48,900
  Accounts payable                                                 45,533            48,408
  Accounts payable to affiliated companies                         25,623            13,911
  Accrued taxes                                                    17,198             2,543
  Accrued interest                                                 14,060            10,894
  Unremitted rate reduction bond collections                       11,193            11,051
  Derivative liabilities                                              132             1,414
  Other                                                            12,774            16,689
                                                           --------------    --------------
                                                                  161,513           163,810
                                                           --------------    --------------

Rate Reduction Bonds                                              461,974           472,222
                                                           --------------    --------------
Deferred Credits and Other Liabilities:
  Accumulated deferred income taxes                               329,642           338,930
  Accumulated deferred investment tax credits                       1,978             2,096
  Deferred contractual obligations                                 62,156            64,237
  Regulatory liabilities                                          283,809           272,081
  Accrued pension                                                  47,416            44,766
  Other                                                            29,130            26,124
                                                           --------------    --------------
                                                                  754,131           748,234
                                                           --------------    --------------
Capitalization:
  Long-Term Debt                                                  407,285           407,285
                                                           --------------    --------------

  Common Stockholder's Equity:
    Common stock, $1 par value - authorized
     100,000,000 shares; 301 shares outstanding
     in 2004 and 2003                                                 -                 -
    Capital surplus, paid in                                      156,510           156,555
    Retained earnings                                             229,520           223,822
    Accumulated other comprehensive loss                              (95)             (117)
                                                           --------------    --------------
  Common Stockholder's Equity                                     385,935           380,260
                                                           --------------    --------------
Total Capitalization                                              793,220           787,545
                                                           --------------    --------------

Commitments and Contingencies (Note 4)

Total Liabilities and Capitalization                       $    2,170,838    $    2,171,811
                                                           ==============    ==============

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


PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                                   March 31,
                                                        ------------------------------
                                                             2004            2003
                                                        --------------  --------------
                                                            (Thousands of Dollars)
<S>                                                      <C>              <C>

Operating Revenues                                       $     244,148    $    230,768
                                                         -------------    ------------
Operating Expenses:
  Operation -
     Fuel, purchased and net interchange power                 101,122         110,938
     Other                                                      39,612          28,906
  Maintenance                                                   16,208          13,445
  Depreciation                                                  11,331          10,607
  Amortization of regulatory assets, net                        24,515          17,570
  Amortization of rate reduction bonds                          10,856           9,246
  Taxes other than income taxes                                  9,020           8,673
                                                         -------------    ------------
    Total operating expenses                                   212,664         199,385
                                                         -------------    ------------
Operating Income                                                31,484          31,383

Interest Expense:
  Interest on long-term debt                                     4,007           3,847
  Interest on rate reduction bonds                               6,957           7,410
  Other interest                                                   312             247
                                                         -------------    ------------
    Interest expense, net                                       11,276          11,504
                                                         -------------    ------------
Other Loss, Net                                                 (1,773)         (1,211)
                                                         -------------    ------------
Income Before Income Tax Expense                                18,435          18,668
Income Tax Expense                                               6,675           7,841
                                                         -------------    ------------
Net Income                                               $      11,760    $     10,827
                                                         =============    ============

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



PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                       March 31,
                                                                            -------------------------------
                                                                                 2004               2003
                                                                            -------------      ------------
                                                                                 (Thousands of Dollars)
<S>                                                                         <C>                <C>
Operating activities:
  Net income                                                                $    11,760       $    10,827
  Adjustments to reconcile to net cash flows
   provided by/(used in) operating activities:
    Depreciation                                                                 11,331            10,607
    Deferred income taxes and investment tax credits, net                        (8,251)           (8,256)
    Amortization of regulatory assets, net                                       24,515            17,570
    Amortization of rate reduction bonds                                         10,856             9,246
    Amortization of recoverable energy costs                                      5,847             5,847
    Regulatory recoveries                                                        (5,691)           (3,154)
    Other sources of cash                                                         6,128             7,345
    Other uses of cash                                                           (3,956)           (6,184)
  Changes in current assets and liabilities:
    Receivables and unbilled revenues, net                                      (12,867)           (3,439)
    Fuel, materials and supplies                                                 (1,862)           (3,916)
    Other current assets                                                          8,207             5,998
    Accounts payable                                                              8,837            (3,152)
    Accrued taxes                                                                14,655           (50,172)
    Other current liabilities                                                      (597)            1,396
                                                                            -----------       -----------
Net cash flows provided by/(used in) operating activities                        68,912            (9,437)
                                                                            -----------       -----------

Investing Activities:
  Investments in plant                                                          (33,764)          (21,411)
  NU system Money Pool (lending)/borrowing                                      (13,900)           19,700
  Other investment activities                                                     8,448             3,493
                                                                            -----------       -----------
Net cash flows (used in)/provided by investing activities                       (39,216)            1,782
                                                                            -----------       -----------

Financing Activities:
  Retirement of rate reduction bonds                                            (10,248)           (8,191)
  (Decrease)/increase in short-term debt                                        (10,000)           15,000
  Cash dividends on common stock                                                 (6,062)              -
  Other financing activities                                                        (58)              (48)
                                                                            -----------       -----------
Net cash flows (used in)/provided by financing activities                       (26,368)            6,761
                                                                            -----------       -----------
Net increase/(decrease) in cash                                                   3,328              (894)
Cash - beginning of period                                                        2,737             5,319
                                                                            -----------       -----------
Cash - end of period                                                        $     6,065       $     4,425
                                                                            ===========       ===========

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



          PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE AND SUBSIDIARIES

                   Management's Discussion and Analysis of
                Financial Condition and Results of Operations


PSNH is a wholly owned subsidiary of NU.  This discussion should be read in
conjunction with NU's management's discussion and analysis of financial
condition and results of operations, consolidated financial statements and
footnotes in this Form 10-Q and the NU 2003 Form 10-K.

RESULTS OF OPERATIONS

The following table provides the variances in income statement line items for
the consolidated statements of income for PSNH included in this report on
Form 10-Q for the three months ended March 31, 2004:

                                           Income Statement Variances
                                             (Millions of Dollars)
                                             2004 over/(under) 2003
                                             ----------------------
                                             Amount         Percent
                                             ------         -------
Operating Revenues:                           $ 13              6%
Operating Expenses:
Fuel, purchased and net
  interchange power                            (10)            (9)
Other operation                                 11             37
Maintenance                                      3             21
Depreciation                                     1              7
Amortization of regulatory assets,
  net                                            7             40
Amortization of rate
  reduction bonds                                1             17
Taxes other than income taxes                    -              -
                                              ----           ----
Total operating expenses                        13              7
                                              ----           ----

Operating income                                 -              -
                                              ----           ----

Interest expense, net                            -              -
Other loss, net                                  -              -
Income before income tax expense                 -              -
                                              ----           ----
Income tax expense                              (1)           (15)
                                              ----           ----
Net Income                                    $  1              9%
                                              ====           ====

Comparison of the First Quarter of 2004 to the First Quarter of 2003

Operating Revenues
Operating revenues increased $13 million in the first quarter of 2004, as
compared to the same period in 2003, primarily due to higher retail revenue
($27 million), partially offset by lower wholesale revenue ($14 million).
Retail revenue increased primarily due to higher retail sales volumes ($8
million) and higher TS revenues ($20 million).  Retail kWh sales increased by
6.9 percent in 2004.  The regulated wholesale revenue decrease is primarily
due to a lower number of wholesale transactions.

Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power decreased $10 million primarily as
result of lower regulated wholesale purchases.

Other Operation
Other operation expenses increased $11 million primarily due to higher
transmission expenses ($3 million), higher fossil steam expense ($3 million),
higher healthcare and pension costs ($3 million), and higher power pool
related load dispatch expenses ($1 million).

Maintenance
Maintenance expense increased $3 million primarily due to higher fossil steam
expenses ($2 million) and higher tree trimming expenses ($1 million).

Amortization of Regulatory Assets, Net
Amortization of regulatory assets, net increased $7 million primarily due to
an increase in the recovery of stranded costs ($5 million) resulting from the
SCRC reconciliation of stranded cost revenues against actual stranded costs.

Amortization of Rate Reduction Bonds
Amortization of rate reduction bonds increased $1 million as a result of the
repayment of principal.

Income Tax Expense
Income tax expense decreased $1 million primarily as a result of lower
unitary taxable income which resulted in lower state income taxes.

LIQUIDITY

PSNH's net cash flows provided by operating activities totaled $68.9 million
for the three months ended March 31, 2004, compared with net cash flows used
in operating activities of $9.4 million for the same period in 2003.  Cash
flows provided by operating activities increased due to changes in working
capital items, primarily accrued taxes.  Accrued taxes decreased in 2003 due
to the payment of taxes on the gain of the sale of Seabrook.

There was a higher level of investing activities in the first quarter of 2004
primarily due to lendings to the NU Money Pool.  There was also a higher
level of financing activities during the first quarter of 2004 primarily due
to a decrease in short-term debt and the payment of $6.1 million in dividends
to NU.  PSNH did not pay dividends to NU during the first quarter of 2003.

PSNH's capital expenditures totaled $33.8 million in the first three months
of 2004 compared to $21.4 million in the first three months of 2003 and are
projected to total $150 million in 2004.

At March 31, 2004, PSNH had no borrowings outstanding on the Utility Group's
$300 million revolving credit line.  This credit line is scheduled to mature
in November 2004 and will be renewed for at least one year.

PSNH has an application pending with the NHPUC to issue up to $50 million of
debt. At March 31, 2004, PSNH had $35 million in short-term debt outstanding
from the NU Money Pool.



WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                             March 31,         December 31,
                                                               2004                2003
                                                         ----------------    ----------------
                                                                (Thousands of Dollars)
<S>                                                       <C>                 <C>
ASSETS
------

Current Assets:
  Cash                                                    $              1    $              1
  Receivables, net                                                  39,221              40,103
  Accounts receivable from affiliated companies                     11,066                  20
  Unbilled revenues                                                  9,178              10,299
  Materials and supplies, at average cost                            1,616               1,584
  Prepayments and other                                                706               1,139
                                                          ----------------    ----------------
                                                                    61,788              53,146
                                                          ----------------    ----------------
Property, Plant and Equipment:
  Electric utility                                                 615,423             612,450
     Less: Accumulated depreciation                                180,049             177,803
                                                          ----------------    ----------------
                                                                   435,374             434,647
  Construction work in progress                                     16,839              13,124
                                                          ----------------    ----------------
                                                                   452,213             447,771
                                                          ----------------    ----------------

Deferred Debits and Other Assets:
  Regulatory assets                                                265,999             268,180
  Prepaid pension                                                   76,436              75,386
  Other                                                             19,065              19,081
                                                          ----------------    ----------------
                                                                   361,500             362,647
                                                          ----------------    ----------------

Total Assets                                              $        875,501    $        863,564
                                                          ================    ================

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



WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
                                                             March 31,         December 31,
                                                               2004                2003
                                                         ----------------    ----------------
                                                                (Thousands of Dollars)
<S>                                                     <C>                <C>
LIABILITIES AND CAPITALIZATION
------------------------------

Current Liabilities:
  Notes payable to banks                                $         10,000   $         10,000
  Notes payable to affiliated companies                           22,400             31,400
  Accounts payable                                                21,643             10,173
  Accounts payable to affiliated companies                        15,293             13,789
  Accrued taxes                                                    3,774                765
  Accrued interest                                                 1,234              2,544
  Other                                                            9,277              9,785
                                                        ----------------   ----------------
                                                                  83,621             78,456
                                                        ----------------   ----------------

Rate Reduction Bonds                                             130,248            132,960
                                                        ----------------   ----------------

Deferred Credits and Other Liabilities:
  Accumulated deferred income taxes                              215,853            216,547
  Accumulated deferred investment tax credits                      3,242              3,326
  Deferred contractual obligations                                84,528             86,937
  Regulatory liabilities                                          31,969             27,776
  Other                                                            8,302              8,357
                                                        ----------------   ----------------
                                                                 343,894            342,943
                                                        ----------------   ----------------
Capitalization:
  Long-Term Debt                                                 157,326            157,202
                                                        ----------------   ----------------
  Common Stockholder's Equity:
    Common stock, $25 par value - authorized
     1,072,471 shares; 434,653 shares outstanding
     in 2004 and 2003                                             10,866             10,866
    Capital surplus, paid in                                      76,024             69,544
    Retained earnings                                             73,602             71,677
    Accumulated other comprehensive loss                             (80)               (84)
                                                        ----------------   ----------------
  Common Stockholder's Equity                                    160,412            152,003
                                                        ----------------   ----------------
Total Capitalization                                             317,738            309,205
                                                        ----------------   ----------------

Commitments and Contingencies (Note 4)

Total Liabilities and Capitalization                    $        875,501   $        863,564
                                                        ================   ================

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



WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                                     March 31,
                                                          -------------------------------
                                                              2004               2003
                                                          -------------      ------------
                                                               (Thousands of Dollars)
<S>                                                       <C>                <C>

Operating Revenues                                        $     97,922       $   104,786
                                                          ------------       -----------
Operating Expenses:
  Operation -
     Fuel, purchased and net interchange power                  56,611            53,003
     Other                                                      13,860            13,770
  Maintenance                                                    3,349             3,134
  Depreciation                                                   3,687             3,471
  Amortization of regulatory assets, net                         4,555            11,273
  Amortization of rate reduction bonds                           2,681             2,469
  Taxes other than income taxes                                  3,132             2,972
                                                          ------------       -----------
        Total operating expenses                                87,875            90,092
                                                          ------------       -----------
Operating Income                                                10,047            14,694

Interest Expense:
  Interest on long-term debt                                     1,463               792
  Interest on rate reduction bonds                               2,149             2,308
  Other interest                                                   237               376
                                                          ------------       -----------
     Interest expense, net                                       3,849             3,476
                                                          ------------       -----------
Other Loss, Net                                                   (281)               (5)
                                                          ------------       -----------
Income Before Income Tax Expense                                 5,917            11,213
Income Tax Expense                                               2,371             5,145
                                                          ------------       -----------
Net Income                                                $      3,546       $     6,068
                                                          ============       ===========

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



WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>

                                                                                   Three Months Ended
                                                                                        March 31,
                                                                            -------------------------------
                                                                                 2004               2003
                                                                            -------------      ------------
                                                                               (Thousands of Dollars)
<S>                                                                         <C>                 <C>
Operating Activities:
  Net income                                                                $     3,546         $    6,068
  Adjustments to reconcile to net cash flows
   provided by operating activities:
    Depreciation                                                                  3,687              3,471
    Deferred income taxes and investment tax credits, net                          (317)            (3,795)
    Amortization of regulatory assets, net                                        4,555             11,273
    Amortization of rate reduction bonds                                          2,681              2,469
    Amortization of recoverable energy costs                                        149                149
    Increase in prepaid pension                                                  (1,050)            (1,675)
    Regulatory (refunds)/overrecoveries                                          (1,011)               710
    Other sources of cash                                                           124                602
    Other uses of cash                                                           (3,752)            (4,921)
  Changes in current assets and liabilities:
    Receivables and unbilled revenues, net                                       (9,043)             4,258
    Materials and supplies                                                          (32)              (538)
    Other current assets                                                            433                161
    Accounts payable                                                             12,974              3,362
    Accrued taxes                                                                 3,009              2,776
    Other current liabilities                                                    (1,817)               604
                                                                            -----------         ----------
Net cash flows provided by operating activities                                  14,136             24,974
                                                                            -----------         ----------
Investing Activities:
  Investments in plant                                                           (7,539)            (4,382)
  NU system Money Pool lending                                                   (9,000)           (16,700)
  Other investment activities                                                       245               (482)
                                                                            -----------         ----------
Net cash flows used in investing activities                                     (16,294)           (21,564)
                                                                            -----------         ----------
Financing Activities:
  Retirement of rate reduction bonds                                             (2,712)            (2,522)
  Increase in short-term debt                                                       -                3,000
  Capital contribution from Northeast Utilities                                   6,500                -
  Cash dividends on common stock                                                 (1,621)            (4,003)
  Other financing activities                                                         (9)                (7)
                                                                            -----------         ----------
Net cash flows provided by/(used in) financing activities                         2,158             (3,532)
                                                                            -----------         ----------
Net decrease in cash                                                                -                 (122)
Cash - beginning of period                                                            1                123
                                                                            -----------         ----------
Cash - end of period                                                        $         1         $        1
                                                                            ===========         ==========

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


            WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY

                   Management's Discussion and Analysis of
                Financial Condition and Results of Operations


WMECO is a wholly owned subsidiary of NU.  This discussion should be read in
conjunction with NU's management's discussion and analysis of financial
condition and results of operations, consolidated financial statements and
footnotes in this Form 10-Q and the NU 2003 Form 10-K.

RESULTS OF OPERATIONS

The following table provides the variances in income statement line items for
the consolidated statements of income for WMECO included in this report on
Form 10-Q for the three months ended March 31, 2004:

                                           Income Statement Variances
                                             (Millions of Dollars)
                                             2004 over/(under) 2003
                                             ----------------------
                                             Amount         Percent
                                             ------         -------
Operating Revenues                            $ (7)            (7)%

Operating Expenses:
Fuel, purchased and net
  interchange power                              4              7
Other operation                                  -              -
Maintenance                                      -              -
Depreciation                                     -              -
Amortization of regulatory
  assets, net                                   (6)           (60)
Amortization of rate
  reduction bonds                                -              -
Taxes other than income taxes                    -              -
                                              ----           ----
Total operating expenses                        (2)            (2)
                                              ----           ----

Operating income                                (5)           (32)
                                              ----           ----

Interest expense, net                            -              -
Other loss, net                                  -              -
                                              ----           ----
Income before income tax expense                (5)           (47)
Income tax expense                              (3)           (54)
                                              ----           ----
Net Income                                    $ (2)           (42)%
                                              ====           ====
Operating Revenues
Operating revenues decreased $7 million in 2004, compared with the same
period in 2003, primarily due to lower wholesale revenues ($4 million) and
lower retail revenues ($2 million).  Wholesale revenues were lower primarily
due to a decrease in wholesale sales transactions.  Retail revenues decreased
as a result of lower retail sales.  The standard offer service rate was
increased with an offsetting decrease to the transition charge.  Retail sales
decreased 0.7 percent.

Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expense increased $4 million
primarily due to higher standard offer supply costs.

Amortization of Regulatory Assets, Net
Amortization of regulatory assets, net expense decreased $6 million primarily
due to the lower recovery of stranded costs as a result of the decrease in
the transition component of retail rates.

Income Tax Expense
Income tax expense decreased $3 million primarily due to lower book taxable
income.

LIQUIDITY

WMECO's net cash flows provided by operating activities decreased to $14.1
million for the first three months of 2004 from $25 million for the same
period of 2003.  Net cash flows provided by operating activities decreased
primarily due to decreases in accounts receivable and amortization of
regulatory assets, partially offset by an increase in accounts payable.

WMECO's net cash flows used in investing activities were $16.3 million for
the three months ended March 31, 2004, compared with $21.6 million for the
same period of 2003.  The lower level of investing activities is primarily
due to a lower level of NU Money Pool lendings offset by higher capital
expenditures during the first quarter of 2004.

WMECO's capital expenditures totaled $7.5 million in the first three months
of 2004 compared to $4.4 million in the first three months of 2003 and are
projected to total $39 million in 2004.

WMECO paid $1.6 million in dividends to NU during the three months ended
March 31, 2004 compared with $4 million during the three months ended
March 31, 2003.  Also during the first quarter of 2004, NU made a capital
contribution to WMECO totaling $6.5 million.

At March 31, 2004, WMECO had $10 million of borrowings outstanding on the
Utility Group's $300 million revolving credit line.  This credit line is
scheduled to mature in November 2004 and will be renewed for at least one
year.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Information

Select Energy utilizes the sensitivity analysis methodology to disclose
quantitative information for its commodity price risks.  Sensitivity analysis
provides a presentation of the potential loss of future earnings, fair values
or cash flows from market risk-sensitive instruments over a selected time
period due to one or more hypothetical changes in commodity prices, or other
similar price changes.  Under sensitivity analysis, the fair value of the
portfolio is a function of the underlying commodity, contract prices and
market prices represented by each derivative commodity contract.  For swaps,
forward contracts and options, fair value reflects management's best
estimates considering over-the-counter quotations, time value and volatility
factors of the underlying commitments.  Exchange-traded futures and options
are recorded at fair value based on closing exchange prices.

NU Enterprises - Wholesale and Retail Marketing Portfolio:  When conducting
sensitivity analyses of the change in the fair value of Select Energy's
electricity, natural gas and oil on the wholesale and retail marketing
portfolio, which would result from a hypothetical change in the future market
price of electricity, natural gas and oil, the fair values of the contracts
are determined from models that take into consideration estimated future
market prices of electricity, natural gas and oil, the volatility of the
market prices in each period, as well as the time value factors of the
underlying commitments.  In most instances, market prices and volatility are
determined from quoted prices on the futures exchange.

Select Energy has determined a hypothetical change in the fair value for its
wholesale and retail marketing portfolio, which includes cash flow hedges and
electricity, natural gas and oil contracts, assuming a 10 percent change in
forward market prices.  At March 31, 2004, a 10 percent change in market
price would have resulted in an increase or decrease in fair value of between
$14.3 million and $16.6 million.

The impact of a change in electricity, natural gas and oil prices on Select
Energy's wholesale and retail marketing portfolio at  March 31, 2004, is not
necessarily representative of the results that will be realized when these
contracts are physically delivered.

NU Enterprises - Trading Contracts:  At March 31, 2004, Select Energy has
calculated the market price resulting from a 10 percent change in forward
market prices.  That 10 percent change would result in a $0.8 million
increase or decrease in the fair value of the Select Energy trading
portfolio.  In the normal course of business, Select Energy also faces risks
that are either non-financial or non-quantifiable.  These risks principally
include credit risk, which is not reflected in this sensitivity analysis.

Other Risk Management Activities

Interest Rate Risk Management:  NU manages its interest rate risk exposure in
accordance with written policies and procedures by maintaining a mix of fixed
and variable rate debt.  At March 31, 2004, approximately 83 percent (73
percent including the debt subject to the fixed-to-floating interest rate
swap in variable rate debt) of NU's long-term debt, including fees and
interest due for spent nuclear fuel disposal costs, is at a fixed interest
rate.  The remaining long-term debt is variable-rate and is subject to
interest rate risk that could result in earnings volatility.  Assuming a one
percentage point increase in NU's variable interest rates, including the rate
on debt subject to the fixed-to-floating interest rate swap, annual interest
expense would have increased by $4.4 million.  At March 31, 2004, NU parent
maintained a fixed-to-floating interest rate swap to manage the interest rate
risk associated with its $263 million of fixed-rate debt.

Credit Risk Management:  Credit risk relates to the risk of loss that NU would
incur as a result of non-performance by counterparties pursuant to the terms
of their contractual obligations.  NU serves a wide variety of customers and
suppliers that include IPPs, industrial companies, gas and electric
utilities, oil and gas producers, financial institutions, and other energy
marketers.  Margin accounts exist within this diverse group, and NU realizes
interest receipts and payments related to balances outstanding in these
margin accounts.  This wide customer and supplier mix generates a need for a
variety of contractual structures, products and terms which, in turn,
requires NU to manage the portfolio of market risk inherent in those
transactions in a manner consistent with the parameters established by NU's
risk management process.

The Utility Group has a lower level of credit risk related to providing
regulated electric and gas distribution service than NU Enterprises.
However, Utility Group companies are subject to credit risk from certain long-
term or high-volume supply contracts with energy marketing companies.

Credit risks and market risks at NU Enterprises are monitored regularly by a
Risk Oversight Council operating outside of the business lines that create or
actively manage these risk exposures to ensure compliance with NU's stated
risk management policies.

NU tracks and re-balances the risk in its portfolio in accordance with fair
value and other risk management methodologies that utilize forward price
curves in the energy markets to estimate the size and probability of future
potential exposure.

NYMEX traded futures and option contracts cleared off the NYMEX exchange are
ultimately guaranteed by NYMEX to Select Energy.  Select Energy has
established written credit policies with regard to its counterparties to
minimize overall credit risk on all types of transactions.  These policies
require an evaluation of potential counterparties' financial condition
(including credit ratings), collateral requirements under certain
circumstances (including cash in advance, LOCs, and parent guarantees), and
the use of standardized agreements, which allow for the netting of positive
and negative exposures associated with a single counterparty.  This
evaluation results in establishing credit limits prior to Select Energy
entering into energy contracts. The appropriateness of these limits is
subject to continuing review.  Concentrations among these counterparties may
impact Select Energy's overall exposure to credit risk, either positively or
negatively, in that the counterparties may be similarly affected by changes
to economic, regulatory or other conditions.

At March 31, 2004 and December 31, 2003, Select Energy maintained collateral
balances from counterparties of $70.9 million and $46.5 million,
respectively.  These amounts are included in both unrestricted cash from
counterparties and other current liabilities on the accompanying consolidated
balance sheets.

Additional quantitative and qualitative disclosures about market risk are set
forth in "Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations," to the consolidated financial statements herein.

ITEM 4.   CONTROLS AND PROCEDURES

NU, CL&P, PSNH and WMECO (collectively, the companies) evaluated the design
and operation of their disclosure controls and procedures to determine
whether they are effective in ensuring that the disclosure of required
information is timely made in accordance with the Exchange Act and the rules
and forms of the SEC.  These evaluations were made under the supervision and
with the participation of management, including the companies' principal
executive officer and principal financial officer, as of the end of the
period covered by this Quarterly Report on Form 10-Q.  The principal
executive officer and principal financial officer have concluded, based on
their review, that the companies' disclosure controls and procedures are
effective to ensure that information required to be disclosed by the
companies in reports that it files under the Exchange Act i) is recorded,
processed, summarized, and reported within the time periods specified in SEC
rules and forms and ii) is accumulated and communicated to management,
including our principal executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required disclosure.  No
significant changes were made to the companies' internal controls or other
factors that could significantly affect these controls subsequent to the date
of their evaluation.


                         PART II.  OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

1.   Retirement Plan Litigation

This matter involved four separate but related federal court lawsuits brought
by nineteen former employees of NUSCO, WMECO and CL&P who retired between
1991 and 1994.  The complaints generally allege that the companies breached
their fiduciary duties to the plaintiffs by making affirmative
misrepresentations to them in response to specific inquiries that caused them
to retire prematurely.

The cases were tried together in a summary bench trial in the United States
District Court in Hartford, Connecticut in April - May 2002.  In a ruling
issued on April 1, 2004, the judge found in favor of fifteen of the nineteen
plaintiffs and ordered NU to modify its retirement plan so as to include the
successful plaintiffs in the special retirement plans at issue, retroactive
to the dates of their retirement.  NU appealed the court's decision to the
United States Court of Appeals for the Second Circuit on a number of legal
and factual grounds.

For further information on retirement-related matters, see Part I, Item 2,
Note 7, of the "Notes to Consolidated Financial Statements."

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

On December 12, 2002, Hawkins, a New York law firm sued by the Connecticut
Resources Recovery Authority (CRRA) as a result of the Enron bankruptcy,
brought an apportionment complaint against a number of former Enron officers,
directors and outside accountants.  In addition to the Enron defendants,
Hawkins also named as defendants in its complaint NU, NUSCO and CL&P. Hawkins
asserts in its complaint that in the event it is found liable to CRRA, then
the apportionment defendants, including NU, NUSCO and CL&P, are responsible
for some or all of the $220 million claimed as damages.  The case was
subsequently removed to federal court where it has been stayed pending a
final transfer order.

3.   Enron Bankruptcy Claim

CL&P is asserting damages of in excess of approximately $15 million in
Enron's bankruptcy proceeding arising out of the rejection in March 2003 of
CL&P's power purchase agreement with Enron Power Marketing, Inc. for power
from CRRA's South Meadow project.  The Connecticut Attorney General (AG), on
behalf of CRRA, has objected to this claim being heard on the grounds that it
might interfere with the AG's attempt to obtain rescission of the original
CRRA-Enron transaction.

4.   CRRA Lawsuit

On March 31, 2004, CL&P was served with two state court complaints from CRRA
(one suit is on behalf of CRRA, the other on behalf of the directors of CRRA)
claiming that CL&P either negligently or fraudulently allowed CRRA and its
directors to become involved with Enron.  Damages in excess of $200 million
are claimed.  CL&P intends to vigorously defend the matter.

ITEM 2.   CHANGES  IN  SECURITIES, USE OF PROCEEDS AND  ISSUER  PURCHASES  OF
          EQUITY SECURITIES

The table below sets forth the information with respect to purchases made by
or on behalf of NU or any "affiliated purchaser" (as defined in Rule 10b-
18(a)(3) under the Securities Exchange Act of 1934), of common stock during
the quarter ended March 31, 2004.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                          Total Number of    Maximum Number
                                                         Shares Purchased    of Shares That
                                                            as Part of         May Yet Be
                       Total Number                          Publicly       Purchased Under
                        of Shares      Average Price      Announced Plans     the Plans or
Period                Purchased (1)    Paid Per Share       or Programs         Programs
--------------------------------------------------------------------------------------------
<S>                       <C>              <C>                    <C>              <C>
Month #1
(January 1, 2004 to
January 31, 2004)         332              $20.16                 -                N/A
--------------------------------------------------------------------------------------------
Month #2
(February 1, 2004
to February 29, 2004)       -                 N/A                 -                N/A
--------------------------------------------------------------------------------------------
Month #3
(March 1, 2004 to
March 31, 2004)             -                 N/A                 -                N/A
--------------------------------------------------------------------------------------------
Total                     332              $20.16                 -                N/A
--------------------------------------------------------------------------------------------
</TABLE>

(1) Purchases were made in open market transactions related to a compensation
    plan for certain management employees.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)  Listing of Exhibits (NU)

     Exhibit No.    Description
     -----------    -----------

     15             Deloitte & Touche LLP Letter Regarding Unaudited Financial
                    Information

     31             Certification of Charles W. Shivery, Chairman, President
                    and Chief Executive Officer of Northeast Utilities, as
                    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
                    of 2002, dated May 7, 2004

     31.1           Certification of John H. Forsgren, Vice Chairman,
                    Executive Vice President and Chief Financial Officer of
                    Northeast Utilities, as adopted pursuant to Section 302
                    of the Sarbanes-Oxley Act of 2002, dated May 7, 2004

     32             Certification of Charles W. Shivery, Chairman, President
                    and Chief Executive Officer of Northeast Utilities and
                    John H. Forsgren, Vice Chairman, Executive Vice President
                    and Chief Financial Officer of Northeast Utilities,
                    pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002, dated
                    May 7, 2004

(a)  Listing of Exhibits (CL&P)

     4.14.1         Amendment to Credit Agreement dated as of March 31, 2004
                    to Credit Agreement dated as of November 10, 2003, among
                    WMECO, CL&P, PSNH, Yankee Gas, the Banks Named Therein
                    and Citibank, N.A. as Administrative Agent, (Exhibit B-7
                    to NU 35-CERT filed April 27, 2004, File No. 70-9755)

     31             Certification of Cheryl W. Grise, Chief Executive Officer
                    of The Connecticut Light and Power Company, as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002, dated May 7, 2004

     31.1           Certification of John H. Forsgren, Executive Vice
                    President and Chief Financial Officer of The Connecticut
                    Light and Power Company, as adopted pursuant to Section
                    302 of the Sarbanes-Oxley Act of 2002, dated May 7, 2004

     32             Certification of Cheryl W. Grise, Chief Executive Officer
                    of The Connecticut Light and Power Company and John H.
                    Forsgren, Executive Vice President and Chief Financial
                    Officer of The Connecticut Light and Power Company,
                    pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002, dated
                    May 7, 2004

(a)  Listing of Exhibits (PSNH)

     4.7.1          Amendment to Credit Agreement dated as of March 31, 2004
                    to Credit Agreement dated as of November 10, 2003, among
                    WMECO, CL&P, PSNH, Yankee Gas, the Banks Named Therein
                    and Citibank, N.A. as Administrative Agent, (Exhibit B-7
                    to NU 35-CERT filed April 27, 2004, File No. 70-9755)

     31             Certification of Cheryl W. Grise, Chief Executive Officer
                    of Public Service Company of New Hampshire, as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002, dated May 7, 2004

     31.1           Certification of John H. Forsgren, Executive Vice
                    President and Chief Financial Officer of Public Service
                    Company of New Hampshire, as adopted pursuant to Section
                    302 of the Sarbanes-Oxley Act of 2002, dated May 7, 2004

     32             Certification of Cheryl W. Grise, Chief Executive
                    Officer of Public Service Company of New Hampshire and
                    John H. Forsgren, Executive Vice President and Chief
                    Financial Officer of Public Service Company of New
                    Hampshire, pursuant to 18 U.S.C. Section 1350 as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002, dated May 7, 2004

(a)  Listing of Exhibits (WMECO)

     4.4.1          Amendment to Credit Agreement dated as of March 31, 2004
                    to Credit Agreement dated as of November 10, 2003, among
                    WMECO, CL&P, PSNH, Yankee Gas, the Banks Named Therein
                    and Citibank, N.A. as Administrative Agent, (Exhibit B-7
                    to NU 35-CERT filed April 27, 2004, File No. 70-9755)

     31             Certification of Cheryl W. Grise, Chief Executive Officer
                    of Western Massachusetts Electric Company, as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
                    dated May 7, 2004

     31.1           Certification of John H. Forsgren, Executive Vice
                    President and Chief Financial Officer of Western
                    Massachusetts Electric Company, as adopted pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002, dated
                    May 7, 2004

     32             Certification of Cheryl W. Grise, Chief Executive Officer
                    of Western Massachusetts Electric Company and John H.
                    Forsgren, Executive Vice President and Chief Financial
                    Officer of Western Massachusetts Electric Company,
                    pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
                    Section 906 of the Sarbanes-Oxley Act of 2002, dated
                    May 7, 2004

(a)                 Listing of Exhibits (NU, CL&P, PSNH and WMECO)

     10.30.1        Arrangement with Charles W. Shivery with respect to
                    interim compensation, effective as of January 1, 2004

     10.32          Northeast Utilities Deferred Compensation Plan for
                    Trustees, amended and restated effective January 1, 2004

     10.33          Northeast Utilities Deferred Compensation Plan for
                    Executives, amended and restated effective January 1,
                    2004

(b)  Reports on Form 8-K:

NU and CL&P filed current reports on Form 8-K dated January 22, 2004
disclosing:

o    The delay in filing the agreement reached in principle to settle the SMD
     dispute with the FERC.

NU filed a current report on Form 8-K dated March 30, 2004 disclosing:

o    The announcement by the NU Board of Trustees that Charles W. Shivery has
     been named chairman, president and chief executive officer of NU, effective
     immediately.



                                  SIGNATURE


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


                                        NORTHEAST UTILITIES
                                        -------------------
                                            Registrant



Date:  May 7, 2004             By  /s/ John H. Forsgren
       -----------                 -----------------------------------
                                       John H. Forsgren
                                       Vice Chairman,
                                       Executive Vice President
                                       and Chief Financial Officer
                                       (for the Registrant and as
                                       Principal Financial Officer)



                                  SIGNATURE


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


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



Date:  May 7, 2004             By  /s/ John H. Forsgren
       -----------                 -----------------------------------
                                       John H. Forsgren
                                       Executive Vice President
                                       and Chief Financial Officer
                                       (for the Registrant and as
                                       Principal Financial Officer)



                                  SIGNATURE


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


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



Date:  May 7, 2004             By  /s/ John H. Forsgren
       -----------                 -----------------------------------
                                       John H. Forsgren
                                       Executive Vice President
                                       and Chief Financial Officer
                                       (for the Registrant and as
                                       Principal Financial Officer)



                                  SIGNATURE


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


                                WESTERN MASSACHUSETTS ELECTRIC COMPANY
                                --------------------------------------
                                              Registrant



Date:  May 7, 2004             By  /s/ John H. Forsgren
       -----------                 -----------------------------------
                                       John H. Forsgren
                                       Executive Vice President
                                       and Chief Financial Officer
                                       (for the Registrant and as
                                       Principal Financial Officer)