1999 Annual Report

              The Connecticut Light and Power Company and Subsidiaries

                                        Index


Contents                                                                Page
--------                                                                ----

Management's Discussion and Analysis of Financial
  Condition and Results of Operations...............................      1

Report of Independent Public Accountants............................     12

Consolidated Statements of Income...................................     13

Consolidated Statements of Comprehensive Income.....................     13

Consolidated Balance Sheets.........................................    14-15

Consolidated Statements of Common Stockholder's Equity..............     16

Consolidated Statements of Cash Flows...............................     17

Notes to Consolidated Financial Statements..........................     18

Selected Consolidated Financial Data................................     44

Consolidated Quarterly Financial Data (Unaudited)...................     44

Consolidated Statistics (Unaudited).................................     45

Preferred Stockholder and Bondholder Information....................  Back Cover



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Financial Condition

Overview
The financial improvement that began in 1998 continued throughout 1999 at The
Connecticut Light and Power Company (CL&P or the company), an operating
subsidiary of Northeast Utilities (NU) and part of the Northeast Utilities
system (NU system), despite a rate reduction in Connecticut.  CL&P's results
benefited from the successful restart of the Millstone 2 nuclear unit, the
strong operating performance delivered by the Millstone 3 and Seabrook Station
(Seabrook) nuclear units, retail sales growth, and continued control over
operation and maintenance (O&M) expenses.  A rate reduction reduced the
positive financial impacts of these items.

During 1999, CL&P resolved key industry restructuring issues by establishing
initial stranded cost recovery levels and standard offer service tariffs and
agreements.  The auction of substantially all of the fossil and hydroelectric
generation assets owned by CL&P and the auction of its respective interest in
the output of the Millstone units, moved CL&P along in its transition into a
purely electric transmission and distribution company, as contemplated by
restructuring legislation in Connecticut.

CL&P lost $13.6 million in 1999, compared with a loss of $195.7 million in 1998
and a loss of $139.6 million in 1997.  The 1999 results included after-tax
write-offs associated with the settlement of nuclear related issues and
industry restructuring totaling $28.8 million.  During 1998, CL&P's results
included write-offs associated with a rate decision in Connecticut and the
retirement of Millstone 1 totaling $133.4 million.

In 1999, CL&P's revenues increased to $2.45 billion, up 2.5 percent from
revenues of $2.39 billion in 1998.  The growth was primarily due to a 2.9
percent increase in retail sales.  That growth was due to weather related
factors that included a hotter than normal summer.  The balance of that
increase was due to economic expansion in CL&P's service territory.  A retail
rate reduction offset some of the growth in revenues.  CL&P's rates were
reduced 5 percent in early 1999.  CL&P's rates were further reduced in January
2000 by 5 percent.  The additional 5 percent rate reduction will offset some of
the growth in future revenues.

Aside from increased revenues, the primary reason for better operating
performance in 1999 was the return to service from extended outages of
Millstone 3 in July 1998 and Millstone 2 in May 1999.

CL&P's ability to continue improving financial performance in 2000 will depend
largely on continued sales growth and on successful control of O&M expenses.
CL&P also hopes to complete in 2000 the majority of restructuring work
remaining, primarily the issuance of rate reduction bonds (securitization) to
lower stranded costs, and the auction of CL&P's ownership interests in the
Millstone units.

Mergers

In 1998 and 1999, NU management concluded that the pace of deregulation was
accelerating throughout the northeastern United States and that shareholders
would benefit from NU not only remaining a major provider of electric
transmission and distribution service, but also an unregulated marketer of both
electricity and natural gas.  NU management also concluded that as a result of
the changes occurring in the highly competitive electric utility industry,
increased size would be crucial to achieve its objective of being a leading
provider of energy products and services in the Northeast.

On October 13, 1999, NU announced an agreement to merge with Consolidated
Edison, Inc. (Con Edison), a financially stronger utility based in New York.
The merger will create the nation's largest electric distribution system with
more than 5 million customers and one of the 15 largest natural gas
distribution systems with 1.4 million customers.

NU and Con Edison filed with various state and federal regulatory bodies in
January 2000 to secure approval of the merger.  The two companies expect these
regulatory proceedings can be completed by the end of July 2000.

Also in 1999, NU management concluded that the NU system would be stronger and
customers could be better served if NU reentered the natural gas distribution
business that it had exited in 1989 and examined several potential businesses
in New England.  By adding gas to NU's energy mix, NU will be able to broaden
its services to its existing customers and will have additional opportunities
for long-term growth.  In June 1999, NU announced an agreement to merge with
Yankee Energy System, Inc. (Yankee).  The merger will return to NU
Connecticut's largest natural gas distribution system, as well as several
unregulated businesses involved in energy services, collections and other
areas.  The Yankee merger received Yankee shareholder approval in October 1999,
final Connecticut Department of Public Utility Control (DPUC) approval in
December 1999 and Securities and Exchange Commission (SEC) approval in January
2000.  The merger closed on March 1, 2000.

Liquidity

During 1999, strong sales growth, improved nuclear performance and continued
control of O&M expenses resulted in net cash flows provided by operations of
$299.4 million in 1999, compared to $364.1 million in 1998 and $37.2 million
in 1997.  The decrease in cash flows from operations is primarily related to
increased tax payments in 1999.

On December 15, 1999, CL&P sold 2,235 megawatts (MW) of fossil generation
assets to an unaffiliated company.  Proceeds from the sale totaled $516.9
million, including payments for fuel and inventory.  CL&P used the proceeds
primarily to par call $406 million of first mortgage bonds in December 1999.
CL&P also used $57.5 million to buy out its lease of four 40 MW turbines.

Proceeds from the generation asset sale are included in net cash flows
provided by investing activities.  Including construction expenditures and
investments in nuclear decommissioning trusts, net cash flows provided by
investing activities were $261.4 million in 1999, compared with net cash
flows used in investing activities of $183 million in 1998 and $108.1 million
in 1997.

Positive operating cash flows and the proceeds from the generation asset sale
enabled CL&P to substantially reduce its outstanding debt.  As of December 31,
1999, CL&P's total debt level, including capital lease obligations, was $1.6
billion, compared with $2.2 billion as of December 31, 1998, and $2.3 billion
as of December 31, 1997.

The net cash flows used in financing activities were $560.9 million in 1999,
compared to $181.2 million in 1998 and net cash flows provided by financing
activities of $71 million in 1997.  This included $639.8 million paid in 1999
to retire long-term debt and preferred stock, compared to $80.7 million in 1998
and $204.1 million in 1997.  There were no cash dividends on common shares
paid in 1999 and 1998 and $6 million in 1997.  Payments made for preferred
stock dividends were $12.8 million, $14.1 million and $15.2 million for 1999,
1998 and 1997, respectively.

CL&P's access to capital also benefited from the strong operating performance
at Millstone 2 and 3 and the announced merger with Con Edison.  During 1999,
CL&P's securities received several upgrades from three credit rating agencies.
CL&P's senior secured bonds achieved investment grade ratings for the first
time since early 1997.  At year end, all securities were under review for
possible upgrades, or on "credit watch" with positive implications by Standard
& Poor's, Moody's Investors Service and Fitch IBCA.

The rating agency upgrades benefited CL&P's efforts to broaden its credit
lines.  On November 19, 1999, CL&P and Western Massachusetts Electric Company
(WMECO) entered into a new 364-day revolving credit facility for $500 million,
replacing the previous $313.75 million facility which was to expire on
November 21, 1999.  The revolving credit facility, which is secured by second
mortgages on Millstone 2 and 3, will be used to bridge gaps in working capital
and provide short-term liquidity.  CL&P may draw up to $300 million under the
facility. Once CL&P receives the proceeds from securitization, the $500 million
facility will be reduced to $300 million, with a $200 million limit for CL&P.
As of December 31, 1999, CL&P had $90 million outstanding under this facility.

For further information regarding the CL&P and WMECO revolving credit facility,
see Note 3, "Short-Term Debt," to the consolidated financial statements.

CL&P also has arranged financing through the sale of its accounts receivable.
CL&P can finance up to $200 million through this facility.  As of December 31,
1999, CL&P had $170 million outstanding under this facility.

During 2000, CL&P hopes to receive regulatory approval to begin the process of
securitizing its approved stranded costs.  Securitization involves issuing rate
reduction bonds with interest rates lower than the company's weighted average
cost of capital.  Proceeds from securitization will be used to significantly
reduce the capitalization of CL&P and buyout or buydown certain purchased-power
contracts with a number of nonutility generators.

Restructuring

During 1999, Connecticut made significant progress in resolving industry
restructuring issues.  Restructuring orders issued in Connecticut allowed CL&P
to determine the impacts of discontinuing Statement of Financial Accounting
Standards (SFAS) No. 71, "Accounting for the Effects of Certain Types of
Regulation," for the generation portion of CL&P's business.  The transmission
and distribution portion of that business will continue to be cost-of-service
regulated.  In addition, the restructuring orders provided for a transition
charge which allows for the recovery of CL&P's generation-related regulatory
assets and prudently incurred stranded costs.

During April 1999, CL&P filed its standard offer service plan with the DPUC and
received a decision on October 1, 1999, as amended on December 15, 1999.  In
that decision, the DPUC approved the recovery of CL&P's regulatory assets and
certain stranded costs associated with CL&P's nuclear generation assets and
established the methodology for setting CL&P's standard offer rates, including
the transition charge and transmission and distribution rates.  The DPUC ruled
on CL&P's stranded cost filing in July 1999 approving $3.5 billion of stranded
cost recovery, which is utilized, in part, in the determination of the
transition charge.

As provided for in the electric utility restructuring legislation enacted in
April 1998, 35 percent of CL&P's customers were able to choose their electric
generation supplier on January 1, 2000, with the remaining 65 percent having
choice on July 1, 2000.  The major components of rates are a transmission and
distribution charge, a generation charge and a transition charge.  For those
customers who do not or are unable to choose another competitive electric
generation supplier, CL&P will supply standard offer or generation service
at an average rate of $0.04813 per kilowatt-hour (kWh) through December 31,
2003.  The revenues attributable to standard offer (generation) service are
expected to exceed the actual cost of providing generation and the difference
will be applied against stranded costs.  In accordance with a plan approved by
the DPUC, one-half of the CL&P standard offer load was procured through a
competitive bidding process, with the remaining one-half of the power being
supplied by an affiliated company.  The contracts are in place through the end
of 2003.  For further information regarding commitments and contingencies
related to the Connecticut restructuring order, see Note 11A, "Commitments
and Contingencies - Restructuring," to the consolidated financial statements.

Generation Asset Divestitures
The Connecticut restructuring laws required CL&P to divest of its generation
assets and utilize substantially all of the net gains from any sales to offset
stranded costs.  During 1999, CL&P sold its fossil generation assets resulting
in a net gain of $286.5 million.  A corresponding amount of regulatory assets
was amortized.  Also during 1999, CL&P signed agreements to transfer certain
hydroelectric generation assets to Northeast Generation Company, an unregulated
affiliate of NU.  This transaction closed on March 14, 2000.  In September
1999, NU announced that the Millstone nuclear generation assets of its
subsidiaries, CL&P and WMECO, will be put up for auction as soon as practical.
For further information regarding commitments and contingencies related to the
generation asset divestitures, see Note 11A, "Commitments and Contingencies -
Restructuring," to the consolidated financial statements.

Nuclear Generation

Millstone Nuclear Units
Millstone 3 received the appropriate Nuclear Regulatory Commission (NRC)
approvals and resumed operation in July 1998.  Millstone 2 received similar NRC
approvals, resumed operation and was returned to CL&P's rate base in May 1999.
Millstone 3 and 2 achieved annual capacity factors of 81.7 percent and 57.9
percent in 1999, respectively.  After a 60-day refueling and maintenance
outage, Millstone 3 returned to service on June 29, 1999, and has achieved a
98.1 percent capacity factor through December 31, 1999.  Since returning to
service in May 1999, Millstone 2 has achieved a 90.3 percent capacity factor
through December 31, 1999.  NU's total share of O&M expenses associated with
Millstone 3 and 2 totaled $261.8 million in 1999, as compared to $323.2 million
in 1998 and $406 million in 1997.  Millstone 1 is currently in decommissioning
status.

An auction of CL&P's ownership interests in the Millstone units is expected in
2000 with a closing in 2001.  Based on regulatory decisions received in 1999,
management expects to recover all of its remaining nuclear stranded costs from
retail customers.

Seabrook
Seabrook achieved an annual capacity factor of 86.4 percent in 1999. However,
since returning to service on May 13, 1999, after a 48-day refueling and
maintenance outage, Seabrook has achieved a 99 percent capacity factor through
December 31, 1999.

CL&P anticipates auctioning its 4.06 percent share of Seabrook, with the 35.98
percent share owned by its affiliate North Atlantic Energy Corporation.

Yankee Companies
On June 1, 1999, the Federal Energy Regulatory Commission accepted the offer of
settlement which was filed on January 15, 1999, by the Maine Yankee Atomic
Power Company (MYAPC).  The significant aspects of the settlement allowed MYAPC
to collect $33.1 million annually to pay for decommissioning and spent fuel,
approved its return on equity of 6.5 percent, permitted full recovery of
MYAPC's unamortized investment, including fuel, and set an incentive budget for
decommissioning at $436.3 million.

On October 15, 1999, the Vermont Yankee Nuclear Power Corporation (VYNPC)
agreed to sell its unit for $22 million to an unaffiliated company.  Among
other commitments, the acquiring company agreed to assume the decommissioning
cost of the unit after it is taken out of service, and the VYNPC owners have
agreed to fund the uncollected decommissioning cost to a negotiated amount at
the time of the closing of the sale.  VYNPC's owners have also agreed either
to enter into a new purchased-power agreement with the acquiring company or to
buy out such future power payment obligations by making a fixed payment to
them.  CL&P has elected the buyout option.  The VYNPC owners' obligations to
close and pay such amounts are conditioned upon their receipt of satisfactory
regulatory approval of the transaction, including provision for adequate
recovery of these payments.

Nuclear Decommissioning
The staff of the SEC has questioned certain of the current accounting practices
of the electric utility industry regarding the recognition, measurement and
classification of decommissioning costs for nuclear units in their financial
statements.

Currently, the Financial Accounting Standards Board plans to review the
accounting for obligations associated with the retirement of long-lived assets,
including the decommissioning of nuclear units.  If current accounting
practices for nuclear decommissioning change, the annual provision for
decommissioning could increase relative to 1999, and the estimated cost for
decommissioning could be recorded as a liability with recognition of an
increase in the cost of the related nuclear unit.  However, management does
not believe that such a change will have a material impact on CL&P's financial
statements due to its current and future ability to recover decommissioning
costs through rates.

Spent Nuclear Fuel Disposal Costs
The United States Department of Energy (DOE) originally was scheduled to begin
accepting delivery of spent fuel in 1998.  However, delays in confirming the
suitability of a permanent storage site continually have postponed plans for
the DOE's long-term storage and disposal site.  Extended delays or a default
by the DOE could lead to consideration of costly alternatives.  CL&P has the
primary responsibility for the interim storage of its share of spent nuclear
fuel.  Adequate storage capacity exists to accommodate all spent nuclear fuel
at Millstone 1.  The facilities for Millstone 2 are expected to provide
adequate storage to accommodate a full-core discharge from the reactor until
2005 with the implementation of currently planned modifications.  Fuel
consolidation, which has been licensed for Millstone 2, could provide adequate
storage capacity for its projected life.  The facilities for Millstone 3 are
expected to provide adequate storage for its projected life with the addition
of new storage racks.  Seabrook is expected to have spent fuel storage capacity
until at least 2010.  Meeting spent fuel storage requirements beyond these
periods could require new and separate storage facilities.  For further
information regarding spent nuclear fuel disposal costs, see Note 11D,
"Commitments and Contingencies - Spent Nuclear Fuel Disposal Costs," to the
consolidated financial statements.

Market Risk and Risk Management Instruments

CL&P uses energy price risk management instruments to manage the market risk
exposures associated with changes in energy prices.  CL&P uses these
instruments to reduce risk by essentially creating offsetting market exposures.
Based on the derivative instruments that were being utilized by CL&P to hedge
some of their energy price risks, there may be an impact on earnings upon
adoption of SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which management has not estimated at this time.

Energy Price Risk Management Instruments
In the generation of electricity, the most significant segment of the variable
cost component is the cost of fuel.  Typically, most of CL&P's fuel purchases
were protected by a regulatory fuel price adjustment clause.  However, for a
specific, well-defined volume of fuel that was excluded from the energy price
adjustment clause, CL&P employed energy price risk management instruments to
protect itself against the risk of rising fuel prices, thereby limiting fuel
costs and protecting its profit margins.  These risks were created by the sale
of long-term fixed-price electricity sales contracts to wholesale customers.

In 1999, CL&P divested substantially all of its fossil and hydroelectric
generation assets and also transferred the rights and obligations of its long-
term fixed-price contracts to an unregulated affiliate.  As a result, the fuel
swap positions were marked-to-market and CL&P recognized a loss of $5.2
million.  In January 2000, the fuel swap positions were liquidated.

Other Matters

Environmental Matters
CL&P is subject to environmental laws and regulations structured to mitigate or
remove the effect of past operations and to improve or maintain the quality of
the environment.  For further information regarding environmental matters, see
Note 11C, "Commitments and Contingencies - Environmental Matters," to the
consolidated financial statements.

Other Commitments and Contingencies
CL&P is subject to other commitments and contingencies primarily
relating to nuclear litigation, nuclear insurance contingencies, its
construction program, long-term contractual arrangements, and the New
England Power Pool generation pricing.  For further information
regarding these commitments and contingencies, see Note 11,
"Commitments and Contingencies," to the consolidated financial
statements.

Year 2000 Issues
The transition into the year 2000 was a success for the NU system and
CL&P.  Its mission to provide safe, reliable energy to its customers
and to ensure continued operability of critical business functions was
not affected by any year 2000 related issues.

The projected total cost of the year 2000 program is estimated at $21
million for the NU system.  The total cost to date was funded through
operating cash flows.  The NU system has incurred and expensed $20
million related to year 2000 readiness efforts.

Forward Looking Statements
This discussion and analysis includes forward looking statements, which are
statements of future expectations and not facts.  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
historical weather patterns, changes in laws, developments in legal or public
policy doctrines, technological developments, and other presently unknown or
unforeseen factors.

RESULTS OF OPERATIONS

The components of significant income statement variances for the past two years
are provided in the table below.

                                         Income Statement Variances
                                           (Millions of Dollars)

                              1999 over/(under) 1998   1998 over/(under) 1997
                              ---------------------    ----------------------
                                Amount     Percent       Amount     Percent
                                ------     -------       ------     -------

Operating Revenues              $ 66          3%          $(79)       (3)%

Operating Expenses:
Fuel, purchased and
  net interchange power         (143)       (13)           (60)       (5)
Other operation and
  maintenance                    (94)       (12)          (136)      (15)
Depreciation                     (23)       (10)           (22)       (9)
Amortization of regulatory
  assets, net                    327         (a)            59        96
Federal and state income taxes   164          -            (12)      (18)
Taxes other than income taxes      5          3             (2)       (1)
Gain on sale of utility plant   (286)         -              -         -

Operating income                 146         (a)            36        (a)

Equity in earnings of
  regional nuclear
  generating companies            (5)       (76)             1        10
Nuclear unrecoverable costs       90         63            (143)       -
Other, net                       (20)        (a)             (4)      (a)
Minority interest in
  loss of subsidiary               -          -               -        -
Interest charges, net              -          -               5        3

Net Income/(Loss)                182         93             (56)     (40)

(a) Percentage greater than 100.


Operating Revenues
Operating revenues increased by $66 million or 3 percent in 1999, due to higher
wholesale revenues ($72 million).  The wholesale revenue increase is primarily
due to higher energy sales and related capacity and transmission revenues.
Retail revenues decreased primarily due to a retail rate reduction ($55
million) and lower fuel clause revenues ($33 million), partially offset by the
impact of Millstone 2 and 3 being returned to CL&P's rate base ($13 million)
and higher retail sales ($62 million).  Retail kilowatt-hour sales increased by
2.9 percent.

The removal of Millstone 2 and 3 from CL&P's rate base reduced revenues by $68
million in 1998.  Wholesale revenues decreased by $33 million, primarily as a
result of terminating the contract with the Connecticut Municipal Electric
Energy Cooperative (CMEEC).  These decreases were partially offset by higher
retail sales volumes.  Retail kilowatt-hour sales were 2.2 percent higher and
contributed $36 million to nonfuel revenues in 1998 primarily as a result of
economic growth.

Fuel, Purchased and Net Interchange Power
Fuel, purchased and net interchange power expense decreased in 1999, primarily
due to lower replacement power costs due to the return to service of Millstone
2 and 3, partially offset by higher purchased-power costs as a result of a
high sales demand.

The change in fuel, purchased and net interchange power expense in 1998, is
primarily due to lower replacement power costs due to the return to service of
Millstone 3 and lower costs at the Yankee nuclear units ($21 million).  This
change was partially offset by higher capacity charges ($51 million).

Other Operation and Maintenance
Other O&M expenses decreased in 1999, primarily due to lower costs at the
Millstone units ($107 million), lower conservation and load management
amortization ($14 million), and lower fossil O&M expenses ($7 million),
partially offset by the recognition of environmental insurance proceeds in 1998
($9 million), higher transmission expenses ($12 million), and higher storm
costs ($12 million).

Other O&M expenses decreased in 1998, primarily due to lower costs at the
Millstone units ($125 million), lower administrative and general expenses
($12 million), the recognition of environmental insurance proceeds ($9
million), lower distribution costs ($8 million), a decrease in sales and
marketing expenses ($8 million), and lower costs from ISO-New England for
interchange services ($7 million).  These decreases were partially offset
by higher recognition of nuclear refueling outage costs primarily as a
result of the 1996 rate settlement ($34 million).

Depreciation
Depreciation decreased in 1999 and 1998, primarily due to the retirement of
Millstone 1.

Amortization of Regulatory Assets, Net
Amortization of regulatory assets, net increased in 1999, primarily due to the
increased amortization associated with the gain on the sale of fossil
generation assets ($286 million), the amortization of CL&P's Millstone 1
remaining investment ($51 million) and the reclassification of the depreciation
on the nuclear plants transferred to regulatory assets ($19 million).  These
increases were partially offset by the completion of the amortization of the
cogeneration deferral in the first quarter of 1999 ($23 million).

Amortization of regulatory assets, net increased in 1998, primarily due to
accelerated amortizations in accordance with regulatory decisions ($52 million)
and the beginning of the amortization of the Millstone 1 investment ($20
million).

Federal and State Income Taxes
Federal and state income taxes increased in 1999, primarily due to higher book
taxable income.

Federal and state income taxes decreased in 1998, primarily due to lower book
taxable income and the increase in income tax credits primarily due to the
Millstone 1 write-off of unrecoverable costs as a result of the February 1999
rate decision.

Gain on Sale of Utility Plant
CL&P recorded a gain on the sale of its fossil generation assets in 1999.
A corresponding amount of amortization expense was recorded.

Equity Earnings of Regional Nuclear Generating Companies
Equity earnings of regional nuclear generating companies decreased in 1999,
primarily due to lower earnings from the Connecticut Yankee Atomic Power
Company.

The change in equity earnings of regional nuclear generating companies in 1998
was not significant.

Nuclear Unrecoverable Costs
Nuclear unrecoverable costs in 1999 are comprised of one-time charges related
to the write-off of capital projects as a result of the Connecticut standard
offer decision ($11 million), the settlement of Millstone 3 joint owner
litigation, net of insurance proceeds ($22 million) and the write-off of CMEEC
nuclear costs ($20 million).  In comparison, 1998 is comprised of the write-off
of the Millstone 1 entitlement formerly held by CMEEC ($27.8 million) and the
write-off of unrecoverable costs as a result of the February 1999 rate decision
($115.3 million).

Other, Net
Other, net, decreased in 1999, primarily due to the loss on the CL&P assignment
of market-based contracts to Select Energy, Inc.

The change in other, net in 1998 was not significant.



REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors
   of The Connecticut Light and Power Company:

We have audited the accompanying consolidated balance sheets of The Connecticut
Light and Power Company (a Connecticut corporation and a wholly owned
subsidiary of Northeast Utilities) and subsidiaries as of December 31, 1999
and 1998, and the related consolidated statements of income, comprehensive
income, common stockholder's equity and cash flows for each of the three years
in the period ended December 31, 1999.  These financial statements are the
responsibility of the company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Connecticut Light and
Power Company and subsidiaries as of December 31, 1999 and 1998, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1999, in conformity with generally accepted
accounting principles.



                                       /s/ ARTHUR ANDERSEN LLP
                                           ARTHUR ANDERSEN LLP



Hartford, Connecticut
January 25, 2000





THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,                        1999        1998        1997
---------------------------------------------------------------------------------------
                                                           (Thousands of Dollars)

<S>                                                 <C>         <C>         <C>
Operating Revenues................................. $2,452,855  $2,386,864  $2,465,587
                                                    ----------- ----------- -----------
Operating Expenses:
  Operation -
     Fuel, purchased and net interchange power.....    927,989   1,070,677   1,131,063
     Other.........................................    480,138     520,518     572,900
  Maintenance......................................    217,961     271,317     355,772
  Depreciation.....................................    193,776     216,509     238,667
  Amortization of regulatory assets, net...........    447,776     120,884      61,648
  Federal and state income taxes...................    122,059     (11,642)    (59,436)
  Taxes other than income taxes....................    174,884     170,347     172,592
  Gain on sale of utility plant....................   (286,477)       -           -
                                                    ----------- ----------- -----------
        Total operating expenses...................  2,278,106   2,358,610   2,473,206
                                                    ----------- ----------- -----------
Operating Income/(Loss)............................    174,749      28,254      (7,619)
                                                    ----------- ----------- -----------
  Other (Loss)/Income:
  Equity in earnings of regional nuclear
    generating companies...........................      1,506       6,241       5,672
  Nuclear unrecoverable costs......................    (53,031)   (143,239)       -
  Other, net.......................................    (25,962)     (6,075)     (1,856)
  Minority interest in loss of subsidiary..........     (9,300)     (9,300)     (9,300)
  Income taxes.....................................     36,921      67,127       7,573
                                                    ----------- ----------- -----------
        Other (loss)/income, net...................    (49,866)    (85,246)      2,089
                                                    ----------- ----------- -----------
        Income/(Loss) before interest charges......    124,883     (56,992)     (5,530)
                                                    ----------- ----------- -----------

Interest Charges:
  Interest on long-term debt.......................    127,533     133,192     132,127
  Other interest...................................     10,918       5,541       1,940
                                                    ----------- ----------- -----------
        Interest charges, net......................    138,451     138,733     134,067
                                                    ----------- ----------- -----------

Net Loss........................................... $  (13,568) $ (195,725) $ (139,597)
                                                    =========== =========== ===========

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net Loss........................................... $  (13,568) $ (195,725) $ (139,597)
                                                    ----------- ----------- -----------
Other comprehensive income, net of tax:
Unrealized gains on securities.....................         38         638        -
Minimum pension liability adjustments..............       -           (260)       -
                                                    ----------- ----------- -----------
  Other comprehensive income, net of tax...........         38         378        -
                                                    ----------- ----------- -----------
Comprehensive Loss                                  $  (13,530) $ (195,347) $ (139,597)
                                                    =========== =========== ===========

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



THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
AT DECEMBER 31,                                                  1999           1998
----------------------------------------------------------------------------------------
                                                               (Thousands of Dollars)
<S>                                                         <C>            <C>
ASSETS
------
Utility Plant, at original cost:
  Electric................................................  $  5,811,126   $  6,173,871

     Less: Accumulated provision for depreciation.........     4,234,771      2,758,012
                                                            -------------  -------------
                                                               1,576,355      3,415,859
  Construction work in progress...........................       115,529         83,477
  Nuclear fuel, net.......................................        80,766         87,867
                                                            -------------  -------------
      Total net utility plant.............................     1,772,650      3,587,203
                                                            -------------  -------------

Other Property and Investments:
  Nuclear decommissioning trusts, at market...............       516,796        452,755
  Investments in regional nuclear generating
   companies, at equity...................................        54,472         56,999
  Other, at cost..........................................        36,696         93,864
                                                            -------------  -------------
                                                                 607,964        603,618
                                                            -------------  -------------
Current Assets:
  Cash....................................................           364            434
  Investments in securitizable assets.....................       107,620        160,253
  Notes receivable from affiliated companies..............          -             6,600
  Receivables, less accumulated provision for
   uncollectible accounts of $300 in 1999 and 1998........        19,680         22,186
  Accounts receivable from affiliated companies...........         3,390          1,721
  Taxes receivable........................................          -            26,478
  Fuel, materials, and supplies, at average cost..........        37,603         71,982
  Prepayments and other...................................       148,628        121,514
                                                            -------------  -------------
                                                                 317,285        411,168
                                                            -------------  -------------

Deferred Charges:
  Regulatory assets.......................................     2,564,095      1,415,838
  Unamortized debt expense................................        16,323         19,603
  Other...................................................        19,967         12,768
                                                            -------------  -------------
                                                               2,600,385      1,448,209
                                                            -------------  -------------


      Total Assets........................................  $  5,298,284   $  6,050,198
                                                            =============  =============
</TABLE>
The accompanying notes are an integral part of these financial statements.




THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
AT DECEMBER 31,                                                    1999           1998
------------------------------------------------------------------------------------------
                                                                 (Thousands of Dollars)
<S>                                                           <C>            <C>
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
  Common stock, $10 par value - authorized
   24,500,000 shares; 12,222,930 shares outstanding
   in 1999 and 1998.........................................  $    122,229   $    122,229
  Capital surplus, paid in..................................       665,598        664,156
  Retained earnings.........................................       153,254        210,108
  Accumulated other comprehensive income....................           416            378
                                                              -------------  -------------
           Total common stockholder's equity................       941,497        996,871
  Preferred stock not subject to mandatory redemption.......       116,200        116,200
  Preferred stock subject to mandatory redemption...........        79,789         99,539
  Long-term debt............................................     1,241,051      1,793,952
                                                              -------------  -------------
           Total capitalization.............................     2,378,537      3,006,562
                                                              -------------  -------------
Minority Interest in Consolidated Subsidiary................       100,000        100,000
                                                              -------------  -------------
Obligations Under Capital Leases............................        50,969         68,444
                                                              -------------  -------------

Current Liabilities:
  Notes payable to banks....................................        90,000         10,000
  Notes payable to affiliated company.......................        11,700           -
  Long-term debt and preferred stock - current portion......       178,755        233,755
  Obligations under capital leases - current portion........        93,431         94,440
  Accounts payable..........................................       101,106        121,040
  Accounts payable to affiliated companies..................         3,215         32,758
  Accrued taxes.............................................       169,214         19,396
  Accrued interest..........................................        18,640         31,409
  Other.....................................................        26,347         34,872
                                                              -------------  -------------
                                                                   692,408        577,670
                                                              -------------  -------------

Deferred Credits and Other Long-term Liabilities:
  Accumulated deferred income taxes.........................       999,473      1,194,722
  Accumulated deferred investment tax credits...............       107,064        114,457
  Decommissioning obligation - Millstone 1..................       580,320        560,500
  Deferred contractual obligations..........................       238,142        277,826
  Other.....................................................       151,371        150,017
                                                              -------------  -------------
                                                                 2,076,370      2,297,522
                                                              -------------  -------------

           Total Capitalization and Liabilities.............  $  5,298,284   $  6,050,198
                                                              =============  =============
</TABLE>
The accompanying notes are an integral part of these financial statements.



THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                                                             Accumulated
                                                     Capital    Retained        Other
                                           Common    Surplus,   Earnings    Comprehensive
                                           Stock     Paid In       (a)         Income         Total
------------------------------------------------------------------------------------------------------
                                                         (Thousands of Dollars)
<S>                                      <C>        <C>        <C>         <C>             <C>
Balance at January 1, 1997............   $122,229   $639,657   $ 580,779   $        -      $1,342,665

    Net loss for 1997.................                          (139,597)                    (139,597)
    Cash dividends on preferred
      stock...........................                           (15,221)                     (15,221)
    Cash dividends on common stock....                            (5,989)                      (5,989)
    Capital stock expenses, net.......                 1,676                                    1,676
                                         ---------  ---------  ----------  --------------  -----------
Balance at December 31, 1997..........    122,229    641,333     419,972            -       1,183,534

    Net loss for 1998.................                          (195,725)                    (195,725)
    Cash dividends on preferred stock.                           (14,139)                     (14,139)
    Capital stock expenses, net.......                 2,764                                    2,764
    Capital contribution from
      Northeast Utilities.............                20,000                                   20,000
    Gain on repurchase of preferred
      stock...........................                    59                                       59
    Other comprehensive income........                                               378          378
                                         ---------  ---------  ----------  --------------  -----------
Balance at December 31, 1998..........    122,229    664,156     210,108             378      996,871

    Net loss for 1999.................                           (13,568)                     (13,568)
    Cash dividends on preferred stock.                           (12,832)                     (12,832)
    Capital stock expenses, net.......                 1,442                                    1,442
    Allocation of benefits - ESOP.....                           (30,454)                     (30,454)
    Other comprehensive income........                                                38           38
                                         ---------  ---------  ----------  --------------  -----------
Balance at December 31, 1999..........   $122,229   $665,598   $ 153,254   $         416   $  941,497
                                         =========  =========  ==========  ==============  ===========


</TABLE>
(a) The company has dividend restrictions imposed by its long-term debt
    agreements.  At December 31, 1999, these restrictions totaled
    approximately $512 million.

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



THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                                               For the Years Ended December 31,
-----------------------------------------------------------------------------------------------
(Thousands of Dollars)                                             1999       1998       1997
-----------------------------------------------------------------------------------------------
<S>                                                            <C>        <C>        <C>
Operating Activities:
  Net loss.................................................... $ (13,568) $(195,725) $(139,597)
  Adjustments to reconcile to net cash
   provided by operating activities:
    Depreciation..............................................   193,776    216,509    238,667
    Deferred income taxes and investment tax credits, net.....  (140,459)   (65,689)   (10,401)
    Amortization of regulatory assets, net ...................   447,776    120,884     61,648
    Amortization of demand-side-management costs, net ........    10,014     42,085     38,029
    Amortization/(deferral) of recoverable energy costs.......    12,702     30,745     (9,533)
    Deferred nuclear refueling outage, net of amortization ...       -          -      (45,333)
    Nuclear unrecoverable costs...............................    53,031    143,239        -
    Allocation of ESOP benefits...............................   (30,454)       -          -
    Gain on sale of utility plant.............................  (286,477)       -          -
    Net other (uses)/sources of cash..........................  (113,174)    34,016    (50,953)
  Changes in working capital:
    Receivables...............................................       837     29,914    254,223
    Fuel, materials and supplies..............................    34,379      9,896     (1,941)
    Accounts payable..........................................   (49,477)   (63,592)   (22,036)
    Accrued taxes.............................................   149,818    (13,621)     4,310
    Investments in securitizable assets.......................    52,633     45,372   (205,625)
    Other working capital (excludes cash).....................   (21,930)    30,097    (74,266)
                                                               ---------- ---------- ----------
Net cash flows provided by operating activities...............   299,427    364,130     37,192
                                                               ---------- ---------- ----------
Financing Activities:
  Issuance of long-term debt..................................       -          -      200,000
  Net increase/(decrease) in short-term debt..................    91,700    (86,300)    96,300
  Reacquisitions and retirements of long-term debt............  (620,010)   (45,006)  (204,116)
  Reacquisitions and retirements of preferred stock...........   (19,750)   (35,711)       -
  Cash dividends on preferred stock...........................   (12,832)   (14,139)   (15,221)
  Cash dividends on common stock..............................       -          -       (5,989)
                                                               ---------- ---------- ----------
Net cash flows (used in)/provided by financing activities.....  (560,892)  (181,156)    70,974
                                                               ---------- ---------- ----------
Investing Activities:
  Investment in plant:
    Electric utility plant....................................  (180,982)  (132,194)  (155,550)
    Nuclear fuel..............................................   (26,198)    (8,444)      (702)
                                                               ---------- ---------- ----------
    Net cash flows used for investments in plant..............  (207,180)  (140,638)  (156,252)

  Investment in NU system Money Pool..........................     6,600     (6,600)   109,050
  Investment in nuclear decommissioning trusts................   (54,582)   (54,106)   (45,314)
  Other investment activities, net............................      (355)    (1,655)   (15,595)
  Net proceeds from the sale of utility plant.................   516,912        -          -
  Capital contributions from Northeast Utilities..............       -       20,000        -
                                                               ---------- ---------- ----------
Net cash flows provided by/(used in) investing activities.....   261,395   (182,999)  (108,111)
                                                               ---------- ---------- ----------
Net (decrease)/increase in cash for the period................       (70)       (25)        55
Cash - beginning of period....................................       434        459        404
                                                               ---------- ---------- ----------
Cash - end of period.......................................... $     364  $     434  $     459
                                                               ========== ========== ==========
Supplemental Cash Flow Information:
Cash paid/(refunded) during the year for:
  Interest, net of amounts capitalized........................ $ 142,398  $ 110,119  $ 145,962
                                                               ========== ========== ==========
  Income taxes................................................ $  19,754  $ (46,747) $ (22,338)
                                                               ========== ========== ==========
Increase in obligations:
  Niantic Bay Fuel Trust...................................... $   4,752  $  10,208  $   2,815
                                                               ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    A. About The Connecticut Light and Power Company
       The Connecticut Light and Power Company (CL&P or the company) along
       with the Public Service Company of New Hampshire (PSNH), Western
       Massachusetts Electric Company (WMECO), North Atlantic Energy
       Corporation (NAEC), and Holyoke Water Power Company (HWP) are the
       operating companies comprising the Northeast Utilities system (NU
       system) and are wholly owned by Northeast Utilities (NU).  The NU system
       serves in excess of 30 percent of New England's electric needs and is
       one of the 20 largest electric utility systems in the country as
       measured by revenues.  The NU system furnishes franchised retail
       electric service in Connecticut, New Hampshire and western Massachusetts
       through CL&P, PSNH and WMECO.  NAEC sells all of its entitlement to the
       capacity and output of the Seabrook Station (Seabrook) nuclear unit to
       PSNH under the terms of two life-of-unit, full cost recovery contracts.
       HWP, also is engaged in the production and distribution of electric
       power.

       NU is registered with the Securities and Exchange Commission (SEC) as
       a holding company under the Public Utility Holding Company Act of 1935
       (1935 Act) and the NU system, including CL&P, is subject to provisions
       of the 1935 Act.  Arrangements among the NU system companies, outside
       agencies and other utilities covering interconnections, interchange of
       electric power and sales of utility property are subject to regulation
       by the Federal Energy Regulatory Commission (FERC) and/or the SEC.
       CL&P is subject to further regulation for rates, accounting and other
       matters by the FERC and/or applicable state regulatory commissions.

       Several wholly owned subsidiaries of NU provide support services for the
       NU system companies, including CL&P, and, in some cases, for other New
       England utilities.  Northeast Utilities Service Company (NUSCO) provides
       centralized accounting, administrative, information resources,
       engineering, financial, legal, operational, planning, purchasing, and
       other services to the NU system companies, including CL&P.  Northeast
       Nuclear Energy Company acts as agent for the NU system companies and
       other New England utilities in operating the Millstone nuclear units.
       North Atlantic Energy Service Corporation has operational responsibility
       for Seabrook.  In addition, CL&P has established a special purpose
       subsidiary whose business consists of the purchase and resale of
       receivables.

       On October 13, 1999, NU and Consolidated Edison, Inc. (Con Edison)
       announced that they have agreed to a merger to combine the two
       companies.  For further information, see Note 17, "Merger Agreement
       with Con Edison."

    B. Presentation
       The consolidated financial statements of CL&P include the accounts of
       all subsidiaries.  Intercompany transactions have been eliminated in
       consolidation.

       The preparation of financial statements in conformity with generally
       accepted accounting principles requires management to make estimates
       and assumptions that affect the reported amounts of assets and
       liabilities and disclosure of contingent 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 years' data have been made to conform
       with the current year's presentation.

       All transactions among affiliated companies are on a recovery of cost
       basis which may include amounts representing a return on equity and are
       subject to approval by various federal and state regulatory agencies.

    C. New Accounting Standards
       The Financial Accounting Standards Board (FASB) has issued Statement of
       Financial Accounting Standards (SFAS) No. 133, "Accounting for
       Derivative Instruments and Hedging Activities."  SFAS No. 133
       establishes accounting and reporting standards for derivative
       instruments and hedging activities.  This statement will require
       derivative instruments utilized by CL&P to be recognized as assets or
       liabilities at fair value.

       In June 1999, the FASB delayed the adoption date of SFAS No. 133 to
       January 1, 2001.

       Based on the derivative instruments utilized by CL&P, there may be an
       impact on earnings upon adoption of SFAS No. 133 which management has
       not estimated at this time.

    D. Investments and Jointly Owned Electric Utility Plant
       Regional Nuclear Generating Companies: CL&P owns common stock in four
       regional nuclear companies (Yankee Companies).  CL&P's ownership
       interests in the Yankee Companies at December 31, 1999 and 1998, which
       are accounted for on the equity basis due to CL&P's ability to exercise
       significant influence over their operating and financial policies are
       34.5 percent of the Connecticut Yankee Atomic Power Company (CYAPC),
       24.5 percent of the Yankee Atomic Electric Company (YAEC), 12 percent
       of the Maine Yankee Atomic Power Company (MYAPC), and 9.5 percent of
       the Vermont Yankee Nuclear Power Corporation (VYNPC).  CL&P's total
       equity investment in the Yankee Companies at December 31, 1999 and 1998,
       is $54.5 million and $57.0 million, respectively.  Each Yankee Company
       owns a single nuclear generating unit.  However, VYNPC is the only unit
       still in operation at December 31, 1999.

       Millstone: CL&P has an 81 percent joint ownership interest in both
       Millstone 1, a 660 megawatt (MW) nuclear unit and Millstone 2, an 870 MW
       nuclear generating unit.  CL&P has a 52.93 percent joint ownership
       interest in Millstone 3, a 1,154 MW nuclear generating unit.  NU expects
       to auction all three units as a single package in 2000, with a closing
       in 2001.  Appropriate regulatory approvals will be required to complete
       the auction.

       Seabrook: CL&P has a 4.06 percent joint ownership interest in Seabrook,
       a 1,148 MW nuclear generating unit.  CL&P expects to auction its
       investment in Seabrook, jointly with NAEC, upon the resolution of the
       restructuring issues in the state of New Hampshire.

       Plant-in-service and the accumulated provision for depreciation for
       CL&P's share of Millstone 2 and 3 and Seabrook are as follows:

       ------------------------------------------------------------------------
       At December 31,                                 1999         1998
       ------------------------------------------------------------------------
                                                     (Millions of Dollars)
       Plant-in-service
       Millstone 2...............................    $  771.7    $  759.3
       Millstone 3...............................     1,915.1     1,909.4
       Seabrook..................................       173.9       174.3
       Accumulated provision for depreciation
       Millstone 2...............................    $  743.3    $  309.2
       Millstone 3...............................     1,822.8       609.3
       Seabrook..................................       165.7        39.3
       ------------------------------------------------------------------------

    E. Depreciation
       The provision for depreciation is calculated using the straight-line
       method based on estimated remaining useful lives of depreciable utility
       plant-in-service, adjusted for salvage value and removal costs, as
       approved by the appropriate regulatory agency, where applicable.  Except
       for major facilities, depreciation rates are applied to the average
       plant-in-service during the period.  Major facilities are depreciated
       from the time they are placed in service.  When plant is retired from
       service, the original cost of the plant, including costs of removal less
       salvage, is charged to the accumulated provision for depreciation.  The
       costs of closure and removal of nonnuclear facilities are accrued over
       the life of the plant as a component of depreciation.  The depreciation
       rates for the several classes of electric plant-in-service are
       equivalent to a composite rate of 3.3 percent in 1999, 3.2 percent in
       1998 and 3.8 percent in 1997.

       At December 31, 1999 and 1998, the accumulated provision for
       depreciation included $47.9 million accrued for the cost of removal, net
       of salvage, for nonnuclear generation property.

       As a result of discontinuing the application of SFAS No. 71 "Accounting
       for the Effects of Certain Types of Regulation," for CL&P's generation
       business, including CL&P's ownership interest in Seabrook, the company
       recorded a charge to accumulated depreciation for the nuclear plant in
       excess of fair market value in the amount of $1.7 billion, and a
       corresponding regulatory asset was created.

    F. Revenues
       Revenues are based on authorized rates applied to each customer's use of
       electricity.  In general, rates can be changed only through a formal
       proceeding before the appropriate regulatory commission.  Regulatory
       commissions also have authority over the terms and conditions of
       nontraditional rate-making arrangements.  At the end of each accounting
       period, CL&P accrues a revenue estimate for the amount of energy
       delivered but unbilled.

    G. Regulatory Accounting and Assets
       The accounting policies of CL&P and the accompanying consolidated
       financial statements conform to generally accepted accounting principles
       applicable to rate-regulated enterprises and historically reflect the
       effects of the rate-making process in accordance with SFAS No. 71.
       As a result of final restructuring orders issued in 1999, CL&P
       discontinued the application of SFAS No. 71 for the generation portion
       of its business.

       Based on a current evaluation of the various factors and conditions that
       are expected to impact future cost recovery, management continues to
       believe it is probable that CL&P will recover its investments in long-
       lived assets, including regulatory assets.  In addition, all material
       regulatory assets are earning a return.  The components of CL&P's
       regulatory assets are as follows:

       ------------------------------------------------------------------------
       At December 31,                                 1999         1998
       ------------------------------------------------------------------------
                                                     (Millions of Dollars)

       Recoverable nuclear costs................     $1,781.9    $  442.7
       Income taxes, net........................        399.5       538.5
       Unrecovered contractual obligations......        228.9       267.0
       Recoverable energy costs, net............         89.4       102.1
       Other....................................         64.4        65.5
                                                     --------    --------
                                                     $2,564.1    $1,415.8
                                                     ========    ========
       ------------------------------------------------------------------------

       The restructuring orders in Connecticut provide for the transmission and
       distribution business to continue to be cost-of-service based and also
       provide for a transition charge which recovers stranded costs, including
       the nuclear regulatory assets established below.

       As a result of discontinuing the application of SFAS No. 71 for CL&P's
       generation business, the company reclassified nuclear plant in excess
       of its estimated fair market value from plant to regulatory assets.
       As of December 31, 1999, the unamortized balance of $1.38 billion is
       classified as recoverable nuclear costs.  Also included in that
       regulatory asset component for 1999 is $401.9 million, which includes
       Millstone 1 recoverable nuclear costs relating to the recoverable
       portion of the undepreciated plant and related assets ($101.9 million)
       and the decommissioning and closure obligation ($300 million).

    H. Income Taxes
       The tax effect of temporary differences (differences between the periods
       in which transactions affect income in the financial statements and the
       periods in which they affect the determination of taxable income) is
       accounted for in accordance with the rate-making treatment of the
       applicable regulatory commissions.

       The tax effect of temporary differences, including timing differences
       accrued under previously approved accounting standards, that give rise
       to the accumulated deferred tax obligation is as follows:

       ------------------------------------------------------------------------
       At December 31,                                 1999         1998
       ------------------------------------------------------------------------
                                                     (Millions of Dollars)
       Accelerated depreciation and
         other plant-related differences.........     $845.6      $1,002.7

       Net operating loss carryforwards..........         -           (7.8)

       Regulatory assets - income tax gross up...      153.7         279.8

       Other                                             0.2         (80.0)
                                                      ------      --------
                                                      $999.5      $1,194.7
                                                      ======      ========
       ------------------------------------------------------------------------

    I. Recoverable Energy Costs
       Under the Energy Policy Act of 1992 (Energy Act), CL&P is assessed for
       its proportionate share of the costs of decontaminating and
       decommissioning uranium enrichment plants owned by the United States
       Department of Energy (DOE) (D&D Assessment).  The Energy Act requires
       that regulators treat D&D Assessments as a reasonable and necessary
       current cost of fuel, to be fully recovered in rates like any other fuel
       cost.  CL&P is currently recovering these costs through rates.  As of
       December 31, 1999 and 1998, CL&P's total D&D Assessment deferrals were
       $26.9 million and $44.9 million, respectively.

       Through December 31, 1999, CL&P had an energy adjustment clause under
       which fuel prices above or below base-rate levels were charged to or
       credited to customers.  At December 31, 1999 and 1998, recoverable
       energy costs included $62.6 million and $78.1 million, respectively,
       of costs previously deferred.  Coincident with the start of
       restructuring, the fuel clause was terminated.  The balance at
       December 31, 1999, has been recorded as a generation-related stranded
       cost and will be recovered through a transition charge mechanism.

    J. Unrecovered Contractual Obligations
       Under the terms of contracts with the Yankee Companies, the shareholder-
       sponsored companies, including CL&P, are responsible for their
       proportionate share of the remaining costs of the units, including
       decommissioning.  As management expects that CL&P will be allowed to
       recover these costs from its customers, CL&P has recorded a regulatory
       asset, with a corresponding obligation, on its balance sheet.

2.  NUCLEAR DECOMMISSIONING AND PLANT CLOSURE COSTS
    Millstone and Seabrook: CL&P's operating nuclear power plants, Millstone 2
    and 3 and Seabrook, have service lives that are expected to end during the
    years 2015 through 2026 and upon retirement, must be decommissioned.
    Millstone 1's expected service life was to end in 2010, however, in July
    1998, restart activities were discontinued and preparations for
    decommissioning the unit began.  Current decommissioning studies conclude
    that complete and immediate dismantlement as soon as practical after
    retirement continues to be the most viable and economic method of
    decommissioning a unit.  These studies are reviewed and updated
    periodically to reflect changes in decommissioning requirements, costs,
    technology, and inflation.  Changes in requirements or technology, the
    timing of funding or dismantling or adoption of a decommissioning method
    other than immediate dismantlement would change decommissioning cost
    estimates and the amounts required to be recovered.  CL&P attempts to
    recover sufficient amounts through its allowed rates to cover its expected
    decommissioning costs.

    CL&P's ownership share of the estimated cost of decommissioning Millstone 2
    and 3 and Seabrook, in year end 1999 dollars, is $334.9 million, $327.9
    million and $22.9 million, respectively.  Nuclear decommissioning costs are
    accrued over the expected service lives of the units and are included in
    depreciation expense.  Nuclear decommissioning expenses for these units
    amounted to $19.6 million in 1999, $19.1 million in 1998 and $20 million
    in 1997.  Nuclear decommissioning, as a cost of removal, is included in
    the accumulated provision for depreciation.

    A Post-Shutdown Decommissioning Activities Report for Millstone 1 was filed
    with the Nuclear Regulatory Commission in June 1999 which outlines
    decommissioning activities, and costs, and supports the obligation recorded
    by the company.  Nuclear decommissioning expenses for Millstone 1 were
    $22.8 million in 1999, $17.3 million in 1998 and $17.7 million in 1997.

    External decommissioning trusts have been established for the costs of
    decommissioning the Millstone units.  Payments for CL&P's ownership share
    of the cost of decommissioning Seabrook is paid to an independent
    decommissioning financing fund managed by the state of New Hampshire.
    Funding of the estimated decommissioning costs assumes levelized
    collections for the Millstone units and escalated collections for Seabrook
    and after-tax earnings on the Millstone and Seabrook decommissioning funds
    of 5.5 percent and 6.5 percent, respectively.

    As of December 31, 1999 and 1998, CL&P collected a total of $185.1 million
    and $165.6 million, respectively, through rates toward the future
    decommissioning costs of their shares of Millstone 2 and 3 and Seabrook,
    of which $164.2 million in 1999 and $145.8 million in 1998 have been
    transferred to external decommissioning trusts.  Earnings on the
    decommissioning trusts increase the decommissioning trust balances and the
    accumulated reserves for depreciation.  Unrealized gains and losses
    associated with the decommissioning trusts and financing funds also impact
    the balance of the trusts and the accumulated reserve for depreciation.
    The fair values of the amounts in the external decommissioning trusts
    were $282.2 million and $242.2 million at December 31, 1999 and 1998,
    respectively.

    Yankee Companies: VYNPC owns and operates a nuclear generating unit with
    a service life that is expected to end in 2012.  CL&P's ownership share of
    estimated costs, in year end 1999 dollars, of decommissioning this unit is
    $40.7 million.  On October 15, 1999, VYNPC agreed to sell the unit for
    $22 million to an unaffiliated company.  Among other commitments, the
    acquiring company agreed to assume the decommissioning cost of the unit
    after it is taken out of service, and the VYNPC owners have agreed to fund
    the uncollected decommissioning cost to a negotiated amount at the
    time of the closing of the sale.

    As of December 31, 1999 and 1998, CL&P's remaining estimated obligation,
    including decommissioning for the units owned by CYAPC, YAEC and MYAPC,
    which have been shut down was $238.1 million and $277.8 million,
    respectively.

3.  SHORT-TERM DEBT
    Limits: The amount of short-term borrowings that may be incurred by CL&P
    is subject to periodic approval by either the SEC under the 1935 Act or
    by the respective state regulators.  SEC authorization allowed CL&P, as
    of January 1, 1999, to incur total short-term borrowings up to a maximum
    of $375 million.  In addition, the charter of CL&P contains preferred stock
    provisions restricting the amount of unsecured debt the company may incur.
    As of December 31, 1999, CL&P's charter permits CL&P to incur $322
    million of unsecured debt.

    Credit Agreement:  On November 19, 1999, CL&P and WMECO entered into
    a new 364-day revolving credit facility for $500 million, replacing the
    previous $313.75 million facility which was to expire on November 21, 1999.
    The revolving credit facility, will be used to bridge gaps in working
    capital and provide short-term liquidity.  CL&P may draw up to $300
    million under the facility, which is secured by second mortgages on
    Millstone 2 and 3.  Unless extended, the new credit facility will expire
    on November 17, 2000.  At December 31, 1999 and 1998, there were $90
    million and $10 million, respectively, in borrowings under these
    facilities.

    Under the credit agreement discussed above, CL&P may borrow at fixed or
    variable rates plus an applicable margin based upon the company's most
    senior secured debt as rated by the lower of Standard & Poor's or Moody's
    Investors Service.  The weighted average interest rate on CL&P's notes
    payable to banks outstanding on December 31, 1999 and 1998, was 7.69
    percent and 6.53 percent, respectively.

    This credit agreement provides that CL&P must comply with certain financial
    and nonfinancial covenants as are customarily included in such agreements,
    including, but not limited to, common equity ratios and interest coverage
    ratios.

    Money Pool: Certain subsidiaries of NU, including CL&P, are members of the
    Northeast Utilities System Money Pool (Pool).  The Pool provides a more
    efficient use of the cash resources of the NU system and reduces outside
    short-term borrowings.  NUSCO administers the Pool as agent for the member
    companies.  Short-term borrowing needs of the member companies are first
    met with available funds of other member companies, including funds
    borrowed by NU parent.  NU parent may lend to the Pool but may not borrow.
    Funds may be withdrawn from or repaid to the Pool at any time without prior
    notice.  Investing and borrowing subsidiaries receive or pay interest based
    on the average daily federal funds rate.  Borrowings based on loans from NU
    parent, however, bear interest at NU parent's cost and must be repaid based
    upon the terms of NU parent's original borrowing.  At December 31, 1999 and
    1998, CL&P had $11.7 million and no borrowings, respectively, from the
    Pool.  The interest rate on borrowings from the Pool at December 31, 1999
    and 1998, was 4.9 percent and 5.8 percent, respectively.  Maturities of
    short-term debt obligations were for periods of three months or less.

4.  LEASES
    CL&P finances its respective shares of nuclear fuel for Millstone 2 and 3
    under the Niantic Bay Fuel Trust (NBFT) capital lease agreement.  This
    capital lease agreement has an expiration date of June 1, 2040.  At
    December 31, 1999 and 1998, the present value of CL&P's capital lease
    obligation to the NBFT was $127.2 million and $144.8 million, respectively.
    In connection with the planned nuclear divestiture, CL&P anticipates that
    its portion of the NBFT capital lease will be terminated and CL&P's portion
    of the NBFT's obligation under the $180 million Series G Intermediate
    Term Note agreement will be assigned to CL&P.

    CL&P makes quarterly lease payments for the cost of nuclear fuel consumed
    in the reactors based on a units-of-production method at rates which
    reflect estimated kilowatt-hours of energy provided plus financing costs
    associated with the fuel in the reactors.  Upon permanent discharge from
    the reactors, CL&P's interest in the nuclear fuel transfers to CL&P.

    CL&P also has entered into lease agreements, some of which are capital
    leases, for the use of data processing and office equipment, vehicles,
    nuclear control room simulators, and office space.  The provisions of
    these lease agreements generally provide for renewal options.

    Capital lease rental payments charged to operating expense were $10
    million in 1999, $20.5 million in 1998 and $10.5 million in 1997.
    Interest included in capital lease rental payments was $9.4 million
    in 1999, $14.1 million in 1998 and $9.9 million in 1997.  Operating lease
    rental payments charged to expense were $14.3 million in 1999, $17.9
    million in 1998 and $19.7 million in 1997.

    Future minimum rental payments, excluding annual nuclear fuel lease
    payments and executory costs such as property taxes, state use taxes,
    insurance, and maintenance, under long-term noncancelable leases, as
    of December 31, 1999, are:

    ---------------------------------------------------------------------------
    Year                                Capital Leases       Operating Leases
    ---------------------------------------------------------------------------
                                               (Millions of Dollars)
    2000...............................     $  2.4                $16.1
    2001...............................        2.4                 13.0
    2002...............................        2.4                 11.3
    2003...............................        2.4                  9.7
    2004...............................        2.3                  8.6
    After 2004.........................       29.4                 16.9
                                            ------                -----
    Future minimum lease payments......       41.3                $75.6
                                                                  =====
    Less amount representing interest..       24.1
                                            ------
    Present value of future minimum
      lease payments for other than
      nuclear fuel.....................       17.2

    Present value of future nuclear
      fuel lease payments..............      127.2
                                            ------
    Present value of future minimum
      lease payments...................     $144.4
                                            ======
    ---------------------------------------------------------------------------

5.  PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION
    Details of preferred stock not subject to mandatory redemption are:

    ---------------------------------------------------------------------------
                             December 31,      Shares
                                1999        Outstanding       December 31,
                             Redemption     December 31,   ------------------
    Description                 Price           1999       1999          1998
    ---------------------------------------------------------------------------
                                                          (Millions of Dollars)

    $1.90  Series of 1947      $52.50         163,912     $  8.2        $  8.2
    $2.00  Series of 1947       54.00         336,088       16.8          16.8
    $2.04  Series of 1949       52.00         100,000        5.0           5.0
    $2.20  Series of 1949       52.50         200,000       10.0          10.0
     3.90% Series of 1949       50.50         160,000        8.0           8.0
    $2.06  Series E of 1954     51.00         200,000       10.0          10.0
    $2.09  Series F of 1955     51.00         100,000        5.0           5.0
     4.50% Series of 1956       50.75         104,000        5.2           5.2
     4.96% Series of 1958       50.50         100,000        5.0           5.0
     4.50% Series of 1963       50.50         160,000        8.0           8.0
     5.28% Series of 1967       51.43         200,000       10.0          10.0
    $3.24  Series G of 1968     51.84         300,000       15.0          15.0
     6.56% Series of 1968       51.44         200,000       10.0          10.0
                                                          ------        ------
                                                          $116.2        $116.2
                                                          ======        ======
    ---------------------------------------------------------------------------

6.  PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION
    Details of preferred stock subject to mandatory redemption are:

    ---------------------------------------------------------------------------
                             December 31,      Shares
                                1999        Outstanding       December 31,
                             Redemption     December 31,   ------------------
    Description                 Price           1999       1999          1998
    ---------------------------------------------------------------------------
                                                          (Millions of Dollars)

    7.23% Series of 1992       $51.93         981,434      $49.1        $ 52.8
    5.30% Series of 1993        50.67       1,009,340       50.5          66.5
                                                           -----        ------
                                                            99.6         119.3
    Less preferred stock to
      be redeemed within one year             395,000       19.8          19.8
                                                           -----        ------
                                                           $79.8        $ 99.5
                                                           =====        ======
    ---------------------------------------------------------------------------

    Each of these series is subject to certain refunding limitations for the
    first five years after issuance.  Redemption prices reduce in future years.

    The following table details redemption and sinking fund activity for
    preferred stock subject to mandatory redemption:

    ---------------------------------------------------------------------------
                                   Minimum
                                    Annual
                                 Sinking Fund           Shares Reacquired
    Series                       Requirement             1999        1998
    ---------------------------------------------------------------------------
                             (Millions of Dollars)

    7.23% Series of 1992 (1)        $ 3.8               75,000     443,566
    5.30% Series of 1993 (2)         16.0              320,000     270,660

    (1) Sinking fund requirements commenced September 1, 1998.
    (2) Sinking fund requirements commenced October 1, 1999.

    The minimum sinking fund requirements of the series subject each year to
    mandatory redemption aggregate $19.8 million each year for 2000 through
    2002, $6.2 million in 2003, and $3.8 million in 2004.  In case of default
    on sinking fund payments, no payments may be made on any junior stock by
    way of dividends or otherwise (other than in shares of junior stock) so
    long as the default continues.  If CL&P is in arrears in the payment of
    dividends on any outstanding shares of preferred stock, CL&P would be
    prohibited from redeeming or purchasing less than all of the outstanding
    preferred stock.

7.  LONG-TERM DEBT
    Details of long-term debt outstanding are:

    ---------------------------------------------------------------------------
    At December 31,                                 1999         1998
    ---------------------------------------------------------------------------
                                                   (Millions of Dollars)

    First Mortgage Bonds:
    7 1/4% Series VV  due 1999...................  $   -        $   74.0
    5 1/2% Series A   due 1999...................      -           140.0
    5 3/4% Series XX  due 2000...................   159.0          200.0
    7 7/8% Series A   due 2001...................   160.0          160.0
    7 3/4% Series C   due 2002...................   200.0          200.0
    6 1/8% Series B   due 2004...................      -           140.0
    7 3/8% Series TT  due 2019...................    20.0           20.0
    7 1/2% Series YY  due 2023...................      -           100.0
    8 1/2% Series C   due 2024...................   115.0          115.0
    7 7/8% Series D   due 2024...................   140.0          140.0
    7 3/8% Series ZZ  due 2025...................      -           125.0
                                                  -------       --------
                                                    794.0        1,414.0
    Pollution Control Notes:
      Variable rate, due 2016-2022...............    46.4           46.4
      Variable tax exempt, due 2028-2031.........   377.5          377.5
    Fees and interest due for spent nuclear
      fuel disposal costs........................   183.4          175.0
    Other........................................     0.2            0.1
    Less amounts due within one year.............   159.0          214.0
    Unamortized premium and discount, net........    (1.4)          (5.0)
                                                  --------      --------
    Long-term debt, net.......................... $1,241.1      $1,794.0
                                                  ========      ========
    ---------------------------------------------------------------------------

    Long-term debt maturities and cash sinking fund requirements, excluding
    fees and interest due for spent nuclear fuel disposal costs, on debt
    outstanding at December 31, 1999, for the years 2000 through 2004 are
    $159 million, $160 million, $200 million, and minimal requirements for
    2003 and 2004, respectively.

    Essentially all utility plant of CL&P is subject to the liens of the
    company's first mortgage bond indenture.

    CL&P has secured $315.5 million of pollution control notes with second
    mortgage liens on Millstone 1, junior to the liens of its first mortgage
    bond indenture.

    CL&P has $62 million of tax-exempt Pollution Control Revenue Bonds with
    bond insurance secured by first mortgage bonds and a liquidity facility.

    The average effective interest rate on the variable-rate pollution control
    notes ranged from 2.2 percent to 3.9 percent for 1999 and from 3.6 percent
    to 3.7 percent for 1998.

8.  INCOME TAX EXPENSE
    The components of the federal and state income tax provisions were charged/
    (credited) to operations as follows:

    ---------------------------------------------------------------------------
    For the Years Ended December 31,             1999       1998       1997
    ---------------------------------------------------------------------------
                                                   (Millions of Dollars)
    Current income taxes:
      Federal...............................    $197.7    $ (9.2)     $(53.3)
      State.................................      27.9      (3.9)       (3.3)
                                                ------    ------      ------
        Total current.......................     225.6     (13.1)      (56.6)
                                                ------    ------      ------
    Deferred income taxes, net:
      Federal...............................    (113.0)    (34.9)        8.4
      State.................................     (20.1)    (17.5)      (11.4)
                                                ------    ------      ------
      Total deferred......................      (133.1)    (52.4)       (3.0)
                                                ------    ------      ------

    Investment tax credits, net.............      (7.3)    (13.3)       (7.4)
                                                ------    ------      ------
    Total income tax expense/(credit).......    $ 85.2    $(78.8)     $(67.0)
                                                ======    ======      ======
    ---------------------------------------------------------------------------

    The components of total income tax expense/(credit) are classified
    as follows:

    ---------------------------------------------------------------------------
    For the Years Ended December 31,             1999       1998       1997
    ---------------------------------------------------------------------------
                                                   (Millions of Dollars)
    Income taxes charged to
      operating expenses...................    $122.1      $(11.7)   $(59.4)
    Other income taxes.....................     (36.9)      (67.1)     (7.6)
                                               ------      ------    ------
    Total income tax expense/(credit)......    $ 85.2      $(78.8)   $(67.0)
                                               ======      ======    ======
    ---------------------------------------------------------------------------

    Deferred income taxes are comprised of the tax effects of temporary
    differences as follows:

    ---------------------------------------------------------------------------
    For the Years Ended December 31,             1999       1998       1997
    ---------------------------------------------------------------------------
                                                   (Millions of Dollars)
    Depreciation, leased nuclear fuel,
      settlement credits and
      disposal costs.......................    $  (9.9)   $ (5.6)     $ 12.0
    Regulatory deferral....................        6.2     (36.7)      (12.4)
    State net operating loss carryforward..        7.8       1.1        (7.7)
    Regulatory disallowance................      (24.2)    (18.1)         -
    Sale of fossil generation assets.......     (126.1)       -           -
    Pension accruals.......................        9.8       8.9         6.5
    Contractual settlements................        0.6       1.3         1.8
    Other..................................        2.7      (3.3)       (3.2)
                                               -------    ------      ------
    Deferred income taxes, net.............    $(133.1)   $(52.4)     $ (3.0)
                                               =======    ======      ======
    ---------------------------------------------------------------------------

    A reconciliation between income tax expense/(credit) and the expected tax
    expense/(credit) at 35 percent of pretax income is as follows:

    ---------------------------------------------------------------------------
    For the Years Ended December 31,             1999       1998       1997
    ---------------------------------------------------------------------------
                                                   (Millions of Dollars)

    Expected federal income tax............     $25.0      $(96.1)   $(72.3)
    Tax effect of differences:
      Depreciation.........................      36.5        20.9      19.5
      Amortization of regulatory assets....      22.5        22.7       3.9
      Investment tax credit amortization...      (7.3)      (13.3)     (7.4)
      State income taxes, net of federal
        benefit............................       5.1       (13.9)     (9.6)
      Other, net...........................       3.4         0.9      (1.1)
                                                -----      ------    ------
    Total income tax expense/(credit)......     $85.2      $(78.8)   $(67.0)
                                                =====      ======    ======
    ---------------------------------------------------------------------------

9.  EMPLOYEE BENEFITS

    A. Pension Benefits and Postretirement Benefits Other Than Pensions
       The NU system companies, including CL&P, participate in a uniform
       noncontributory defined benefit retirement plan covering substantially
       all regular NU system employees.  Benefits are based on years of
       service and the employees' highest eligible compensation during 60
       consecutive months of employment.  CL&P's portion of the NU system's
       total pension credit, part of which was credited to utility plant, was
       $40.3 million in 1999, $32.6 million in 1998 and $22.5 million in 1997.

       Currently, CL&P annually funds an amount at least equal to that which
       will satisfy the requirements of the Employee Retirement Income Security
       Act and Internal Revenue Code (the Code).

       The NU system companies, including CL&P, also provide certain health
       care benefits, primarily medical and dental, and life insurance benefits
       through a benefit plan to retired employees.  These benefits are
       available for employees retiring from CL&P who have met specified
       service requirements.  For current employees and certain retirees, the
       total benefit is limited to two times the 1993 per retiree health care
       cost.  These costs are charged to expense over the future estimated work
       life of the employee.  CL&P annually funds postretirement costs through
       external trusts with amounts that have been rate-recovered and which
       also are tax deductible under the Code.

       Pension and trust assets are invested primarily in domestic and
       international equity securities and bonds.

       The following table represents information on the plans' benefit
       obligation, fair value of plan assets, and the respective plans' funded
       status:


-------------------------------------------------------------------------------
                                                At December 31,
-------------------------------------------------------------------------------
                                 Pension Benefits     Postretirement Benefits
(Millions of Dollars)            1999        1998        1999          1998
-------------------------------------------------------------------------------
Change in benefit obligation
Benefit obligation
  at beginning of year......... $ (562.7)  $(531.6)     $(133.8)      $(126.6)
Service cost...................    (11.0)     (9.8)        (2.3)         (2.0)
Interest cost..................    (40.0)    (37.5)        (9.3)         (9.2)
Plan amendment.................    (32.5)       -            -             -
Transfers......................      1.8      (6.3)          -             -
Actuarial gain/(loss)..........     58.8     (12.4)        (0.6)         (7.7)
Benefits paid..................     35.5      34.9         14.1          11.7
Settlements....................     (1.8)       -            -             -
-------------------------------------------------------------------------------
Benefit obligation
  at end of year............... $ (551.9)  $(562.7)     $(131.9)      $(133.8)
-------------------------------------------------------------------------------
Change in plan assets
Fair value of plan assets
  at beginning of year......... $  935.7   $ 846.4      $  53.8       $  46.1
Actual return on plan assets...    135.8     117.9          6.6           6.1
Employer contribution..........       -         -          13.4          13.3
Benefits paid..................    (35.5)    (34.9)       (14.1)        (11.7)
Transfers......................      1.8       6.3           -             -
-------------------------------------------------------------------------------
Fair value of plan assets
  at end of year............... $1,037.8   $ 935.7      $  59.7       $  53.8
-------------------------------------------------------------------------------
Funded status at December 31... $  485.9   $ 373.0      $ (72.2)      $ (80.0)
Unrecognized transition
  (asset)/obligation...........     (4.6)     (5.5)        95.5         102.8
Unrecognized prior
  service cost.................     33.1       3.2           -             -
Unrecognized net gain..........   (400.9)   (295.8)       (23.3)        (22.8)
-------------------------------------------------------------------------------
Prepaid benefit cost........... $  113.5   $  74.9      $    -        $    -
-------------------------------------------------------------------------------

       The following actuarial assumptions were used in calculating the plans'
       year end funded status:

-------------------------------------------------------------------------------
                                                At December 31,
-------------------------------------------------------------------------------
                                 Pension Benefits     Postretirement Benefits
                                 1999        1998        1999          1998
-------------------------------------------------------------------------------
Discount rate.................   7.75%       7.00%       7.75%         7.00%
Compensation/progression rate.   4.75        4.25        4.75          4.25
Health care cost
  trend rate(a)...............    N/A         N/A        5.57          5.22
-------------------------------------------------------------------------------

      (a) The annual per capita cost of covered health care benefits was
          assumed to decrease to 4.90 percent by 2001.

       The components of net periodic benefit (credit)/cost are:

-------------------------------------------------------------------------------
                                       For the Years Ended December 31,
-------------------------------------------------------------------------------
                                 Pension Benefits      Postretirement Benefits
(Millions of Dollars)         1999     1998    1997    1999    1998    1997
-------------------------------------------------------------------------------
Service cost............... $ 11.0   $  9.8  $  8.8   $ 2.3   $ 2.0   $ 1.7
Interest cost..............   40.0     37.5    37.9     9.3     9.2     9.2
Expected return
  on plan assets...........  (78.1)   (68.4)  (59.6)   (4.2)   (3.6)   (3.1)
Amortization of
  unrecognized net
  transition (asset)/
  obligation...............   (0.9)    (0.9)   (0.9)    7.3     7.4     7.3
Amortization of prior
  service cost.............    2.7      0.3     0.3      -       -       -
Amortization of
  actuarial gain...........  (15.0)   (10.9)   (8.1)     -       -       -
Other amortization, net....     -        -       -     (1.3)   (1.7)   (2.3)
Settlements................     -        -     (0.9)     -       -       -
-------------------------------------------------------------------------------
Net periodic benefit
  (credit)/cost............ $(40.3)  $(32.6) $(22.5)  $13.4   $13.3   $12.8
-------------------------------------------------------------------------------

       For calculating pension and postretirement benefit costs, the following
       assumptions were used:

-------------------------------------------------------------------------------
                                       For the Years Ended December 31,
-------------------------------------------------------------------------------
                                 Pension Benefits      Postretirement Benefits
                              1999     1998    1997    1999    1998    1997
-------------------------------------------------------------------------------
Discount rate..............   7.00%    7.25%   7.75%   7.00%   7.25%   7.75%
Expected long-term
  rate of return...........   9.50     9.50    9.25     N/A     N/A     N/A
Compensation/
  progression rate.........   4.25     4.25    4.75    4.25    4.25    4.75
Long-term rate of return -
  Health assets,
  net of tax...............    N/A      N/A     N/A    7.50    7.75    7.50
 Life assets...............    N/A      N/A     N/A    9.50    9.50    9.25
-------------------------------------------------------------------------------

       Assumed health care cost trend rates have a significant effect on the
       amounts reported for the health care plans.  The effect of changing the
       assumed health care cost trend rate by one percentage point in each year
       would have the following effects:

-------------------------------------------------------------------------------
                                         One Percentage       One Percentage
(Millions of Dollars)                    Point Increase       Point Decrease
-------------------------------------------------------------------------------
Effect on total service and
 interest cost components............         $0.6                $(0.6)
Effect on postretirement
 benefit obligation..................         $7.3                $(7.2)
-------------------------------------------------------------------------------

       The trust holding the health plan assets is subject to federal
       income taxes.

    B. Employee Stock Ownership Plan
       In June 1999, CL&P paid NU parent $30.5 million for NU shares issued
       from 1992 through 1998 on behalf of its employees in accordance with
       NU's 401(k) plan.  CL&P charged retained earnings for this payment,
       as compensation expense had already been recorded in the respective
       years at the fair market value of the shares allocated.

10. SALE OF CUSTOMER RECEIVABLES
    As of December 31, 1999 and 1998, CL&P had sold accounts receivable of
    $170 million and $105 million, respectively, to a third-party purchaser
    with limited recourse through the CL&P Receivables Corporation (CRC),
    a wholly owned subsidiary of CL&P.  In addition, at December 31, 1999
    and 1998, $22.5 million and $11.6 million, respectively, of assets was
    designated as collateral under the agreement with CRC.

    Concentrations of credit risk to the purchaser under the company's
    agreement with respect to the receivables are limited due to CL&P's
    diverse customer base within its service territory.

11. COMMITMENTS AND CONTINGENCIES

    A. Restructuring
       During 1999, restructuring orders were issued by the Connecticut
       Department of Public Utility Control (DPUC), which required CL&P to
       discontinue the application of SFAS No. 71 to the generation portion
       of its business and allowed for the recovery of the majority of its
       stranded costs.  Stranded costs including regulatory assets will be
       collected through a transition charge through 2026.  The restructuring
       orders also allowed for securitization of CL&P's nonnuclear regulatory
       assets and the costs to buyout or buydown the various purchased-power
       contracts.  Securitization is the process of monetizing stranded costs
       through the sale of nonrecourse debt securities by a special purpose
       entity, collateralized by CL&P's interests in its stranded cost
       recoveries.

       On December 15, 1999, the DPUC issued a supplemental decision approving
       the components of CL&P's rates for standard offer service commencing on
       January 1, 2000.  The DPUC also approved an interim nuclear capital
       recovery mechanism for the period from January 1, 2000, until the
       nuclear units are sold at auction.  In approving the rates, the DPUC
       denied recovery of most of the capital additions made to Millstone 2
       and 3 subsequent to June 30, 1997, which CL&P has or will expend to
       maintain those plants in a safe and efficient condition or to maintain
       their auction value.  If implemented as approved, CL&P would not recover
       a significant portion of the capital additions which have been or are
       expected to be incurred subsequent to July 1, 1997, until the plants are
       sold in 2001.  On December 29, 1999, CL&P filed with the DPUC a petition
       for reconsideration of this portion of the order.  The DPUC has agreed
       to reopen the docket to consider CL&P's petition.  Management believes
       the restructuring legislation provides  for the recovery of these
       prudently incurred expenditures.  If CL&P is unsuccessful in favorably
       resolving this contingency, an impairment loss of $50 million would be
       recorded.

       In September 1999, NU announced that the Millstone nuclear generation
       assets of CL&P will be put up for auction as soon as practical.  On
       November 8, 1999, CL&P filed its divestiture plan for the Millstone
       units with the DPUC.  The auction is expected to begin in early 2000,
       provided all regulatory approvals have been met, with a successful
       bidder chosen by mid 2000 and a closing in 2001.  No NU system company
       will participate as a bidder in the auction process.  Management expects
       to recover all of CL&P's nuclear stranded costs through the net proceeds
       of generation asset sales and billing through a transition charge to
       retail customers.

    B. Nuclear Litigation
       The non-NU joint owners of Millstone 3 have filed demands for
       arbitration with CL&P and WMECO as well as lawsuits in Massachusetts
       Superior Court against NU and its current and former trustees related
       to the companies' operation of Millstone 3.  During 1999, NU and these
       subsidiaries agreed in principle to settle with certain of the joint
       owners, who own 58 percent of the non-NU ownership of Millstone 3.  The
       settlements provide for the payment to the claimants of $36.4 million
       and certain contingent payments.

       Arbitration and litigation claims remain outstanding for the remaining
       joint owners who have not agreed to settle.  Management cannot estimate
       the potential outcome of the arbitration and litigation for the
       nonsettled joint owners, therefore, no liability has been established
       at December 31, 1999.

    C. Environmental Matters
       The NU system, including CL&P, is subject to environmental laws and
       regulations intended to mitigate or remove the effect of past operations
       and improve or maintain the quality of our environment.  As such, the NU
       system and CL&P have active environmental auditing and training programs
       and believe they are in compliance with the current laws and
       regulations.

       However, the normal course of operations may necessarily involve
       activities and substances that expose CL&P to potential liabilities of
       which management cannot determine the outcome.  Additionally, management
       cannot determine the outcome for liabilities that may be imposed for
       past acts, even though such past acts may have been lawful at the time
       they occurred.  Management does not believe, however, that this will
       have a material impact on CL&P's financial statements.

       Based upon currently available information for the estimated remediation
       costs at December 31, 1999 and 1998, the liability recorded by CL&P for
       its estimated environmental remediation costs amounted to $6.9 million
       and $8 million, respectively.

    D. Spent Nuclear Fuel Disposal Costs
       Under the Nuclear Waste Policy Act of 1982, CL&P must pay the DOE for
       the disposal of spent nuclear fuel and high-level radioactive waste.
       The DOE is responsible for the selection and development of repositories
       for, and the disposal of, spent nuclear fuel and high-level radioactive
       waste.  Fees for nuclear fuel burned on or after April 7, 1983, are
       billed currently to customers and paid to the DOE on a quarterly basis.
       For nuclear fuel used to generate electricity prior to April 7, 1983
       (Prior Period Fuel), an accrual has been recorded for the full liability
       and payment must be made prior to the first delivery of spent fuel to
       the DOE.  Until such payment is made, the outstanding balance will
       continue to accrue interest at the 3-month treasury bill yield rate.
       As of December 31, 1999 and 1998, fees due to the DOE for the disposal
       of CL&P's Prior Period Fuel were $183.4 million and $175 million,
       respectively, including interest costs of $116.9 million and $108.5
       million, respectively.

    E. Nuclear Insurance Contingencies
       Insurance policies covering CL&P's ownership share of the NU system's
       nuclear facilities have been purchased for the primary cost of repair,
       replacement or decontamination of utility property, certain extra costs
       incurred in obtaining replacement power during prolonged accidental
       outages and the excess cost of repair, replacement or decontamination
       or premature decommissioning of utility property.

       CL&P is subject to retroactive assessments if losses under those
       policies exceed the accumulated funds available to the insurer.
       The maximum potential assessments with respect to losses arising during
       the current policy year for the primary property insurance program, the
       replacement power policies and the excess property damage policies are
       $7.1 million, $4.1 million and $8.9 million, respectively.  In addition,
       insurance has been purchased by the NU system in the aggregate of $200
       million on an industry basis for coverage of worker claims.

       Under certain circumstances, in the event of a nuclear incident at one
       of the nuclear facilities covered by the federal government's third-
       party liability indemnification program, the NU system, including CL&P,
       could be assessed liabilities in proportion to its ownership interest in
       each of its nuclear units up to $83.9 million.  The NU system's payment
       of this assessment would be limited to, in proportion to its ownership
       interest in each of its nuclear units, $10 million in any one year per
       nuclear unit.  In addition, if the sum of all claims and costs from any
       one nuclear incident exceeds the maximum amount of financial protection,
       the NU system would be subject to an additional 5 percent or $4.2
       million liability, in proportion to its ownership interests in each of
       its nuclear units.  Based upon its ownership interests in the Millstone
       units and in Seabrook, CL&P's maximum liability, including any
       additional assessments, would be $192.9 million per incident, of which
       payments would be limited to $21.9 million per year.  In addition,
       through purchased-power contracts with VYNPC, CL&P would be responsible
       for up to an additional assessment of $8.4 million per incident, of
       which payments would be limited to $1 million per year.

    F. Construction Program
       CL&P currently forecasts construction expenditures of $1.3 billion for
       the years 2000-2004, including $205.8 million for 2000.  CL&P estimates
       that nuclear fuel requirements, including nuclear fuel financed through
       the NBFT, will be $137.5 million for the years 2000-2003, including
       $47.5 million for 2000.

    G. Long-Term Contractual Arrangements
       Yankee Companies: The NU system companies relied on VYNPC for 1.5
       percent of their capacity under long-term contracts.  Under the terms
       of its agreement, CL&P paid its ownership (or entitlement) shares of
       costs, which included depreciation, operation and maintenance (O&M)
       expenses, taxes, the estimated cost of decommissioning, and a return
       on invested capital.  These costs were recorded as purchased-power
       expenses and recovered through CL&P's rates.  CL&P's cost of purchases
       under contracts with VYNPC amounted to $17 million in 1999, $15.9
       million in 1998 and $14.1 million in 1997.  VYNPC has agreed to sell
       its nuclear unit.  Upon completion of the sale, this long-term contract
       will be terminated.

       Nonutility Generators (NUGs): CL&P has entered into various arrangements
       for the purchase of capacity and energy from NUGs.  For the years ended
       December 31, 1999 and 1998, 13 percent and for the year ended December
       31, 1997, 14 percent, of NU's system electricity requirements were met
       by NUGs.  CL&P's total cost of purchases under these arrangements
       amounted to $293.8 million in 1999, $290.7 million in 1998 and $283.2
       million in 1997.  The company is in the process of renegotiating the
       terms of these contracts through either a contract buydown or buyout.
       The company expects any payments to the NUGs as a result of these
       renegotiations to be recovered from the company's customers.

       Hydro-Quebec: Along with other New England utilities, CL&P has entered
       into an agreement to support transmission and terminal facilities to
       import electricity from the Hydro-Quebec system in Canada.  CL&P is
       obligated to pay, over a 30-year period ending in 2020, its
       proportionate share of the annual O&M expenses and capital costs of
       those facilities.

       Estimated Annual Costs:  The estimated annual costs of CL&P's
       significant long-term contractual arrangements, absent the effects of
       any contract terminations or buydowns, are as follows:

       ------------------------------------------------------------------------
                                 2000     2001      2002      2003      2004
       ------------------------------------------------------------------------
                                           (Millions of Dollars)

       VYNPC.................  $ 15.9    $ 16.5    $ 16.6    $ 16.2    $ 15.9
       NUGs..................   291.0     292.5     296.2     301.7     283.3
       Hydro-Quebec..........    17.8      17.3      16.8      16.3      15.8
       ------------------------------------------------------------------------

    H. New England Power Pool (NEPOOL) Generation Pricing
       Disputes with respect to interpretation and implementation of the NEPOOL
       market rules have arisen with respect to various competitive product
       markets.  In certain cases, CL&P stands to gain as a result of resolution
       of such disputes.  In other cases, CL&P could incur additional costs as
       the result of resolution of the disputes.  The various disputes are in
       various stages of resolution through alternative dispute resolution and
       regulatory review.  It is too early to tell the level of potential gain
       or loss that may result upon resolution of these issues.

12. MARKET RISK AND RISK MANAGEMENT INSTRUMENTS
    Energy Price Risk Management: Beginning in 1997 through 1999, CL&P used
    swap instruments with financial institutions to hedge the energy price risk
    created by long-term negotiated energy contracts.  These agreements were
    intended to minimize exposure associated with rising fuel prices by
    managing a portion of CL&P's cost of producing power for these negotiated
    energy contracts.

    In 1999, CL&P divested substantially all of its fossil and hydroelectric
    generation assets and agreed to transfer the rights and obligations related
    to the long-term negotiated energy contracts to an unregulated affiliate.
    Accordingly, the fuel swap positions were marked-to-market and CL&P
    recognized a loss of $5.2 million.  In January 2000, the fuel swap
    positions were liquidated.

13. MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY
    CL&P Capital LP (CL&P LP), a subsidiary of CL&P, previously had issued
    $100 million of cumulative 9.3 percent Monthly Income Preferred Securities
    (MIPS), Series A.  CL&P has the sole ownership interest in CL&P LP, as a
    general partner, and is the guarantor of the MIPS securities.  Subsequent
    to the MIPS issuance, CL&P LP loaned the proceeds of the MIPS issuance,
    along with CL&P's $3.1 million capital contribution, back to CL&P in the
    form of an unsecured debenture.  CL&P consolidates CL&P LP for financial
    reporting purposes.  Upon consolidation, the unsecured debenture is
    eliminated, and the MIPS securities are accounted for as a minority
    interest.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS
    The following methods and assumptions were used to estimate the fair
    value of each of the following financial instruments:

    Supplemental Executive Retirement Plan (SERP) Investments: CL&P's portion
    of the investments held for the benefit of the SERP are recorded at fair
    market value.  These investments having a cost basis of $0.2 million held
    for benefit of the SERP were recorded at their fair market values at
    December 31, 1999 and 1998, of $1.3 million.

    Nuclear decommissioning trusts: CL&P's portion of the investments held
    in the NU system companies' nuclear decommissioning trusts were marked-
    to-market by $88.2 million as of December 31, 1999, and $78.7 million as
    of December 31, 1998, with corresponding offsets to the accumulated
    provision for depreciation.  The amounts adjusted in 1999 and 1998
    represent cumulative net unrealized gains.  The cumulative gross unrealized
    holding losses were immaterial for both 1999 and 1998.

    Preferred stock and long-term debt: The fair value of CL&P's fixed-rate
    securities is based upon the quoted market price for those issues or
    similar issues.  Adjustable rate securities are assumed to have a fair
    value equal to their carrying value.  The carrying amounts of CL&P's
    financial instruments and the estimated fair values are as follows:

    --------------------------------------------------------------------------
                                                 At December 31, 1999
    --------------------------------------------------------------------------
                                                Carrying          Fair
    (Millions of Dollars)                       Amount            Value
    --------------------------------------------------------------------------
    Preferred stock not subject
       to mandatory redemption.................  $116.2          $144.9

     Preferred stock subject to
       mandatory redemption....................    99.6            96.8

     Long-term debt -
       First mortgage bonds....................   794.0           805.4

       Other long-term debt....................   607.3           564.5

     MIPS......................................   100.0            97.3
     -------------------------------------------------------------------------

    --------------------------------------------------------------------------
                                                 At December 31, 1998
    --------------------------------------------------------------------------
                                                Carrying          Fair
    (Millions of Dollars)                       Amount            Value
    --------------------------------------------------------------------------
    Preferred stock not subject
      to mandatory redemption................. $  116.2          $ 77.2

    Preferred stock subject to
      mandatory redemption....................    119.3           108.1

    Long-term debt -
      First mortgage bonds....................  1,414.0         1,421.9

      Other long-term debt....................    598.9           601.2

    MIPS......................................    100.0           102.0
    -------------------------------------------------------------------------

15. OTHER COMPREHENSIVE INCOME
    The accumulated balance for each other comprehensive income item
    is as follows:


    ---------------------------------------------------------------------------
                                                      Current
                                       December 31,   Period     December 31,
                                          1998        Change         1999
    ---------------------------------------------------------------------------
    (Thousands of Dollars)
    ---------------------------------------------------------------------------
    Unrealized gains on securities....    $ 638         $38          $ 676
    Minimum pension liability
     adjustments......................     (260)          -           (260)
    ---------------------------------------------------------------------------
    Accumulated other
      comprehensive income............    $ 378         $38          $ 416
    ---------------------------------------------------------------------------

    ---------------------------------------------------------------------------
                                                      Current
                                       December 31,   Period     December 31,
                                          1997        Change         1998
    ---------------------------------------------------------------------------
    (Thousands of Dollars)
    ---------------------------------------------------------------------------
    Unrealized gains on securities....    $ -          $ 638         $ 638
    Minimum pension liability
     adjustments......................      -           (260)         (260)
    ---------------------------------------------------------------------------
    Accumulated other
      comprehensive income............    $ -          $ 378         $ 378
    ---------------------------------------------------------------------------

    The changes in the components of other comprehensive income are reported
    net of the following income tax effects:

    ---------------------------------------------------------------------------
    (Thousands of Dollars)                    1999         1998         1997
    ---------------------------------------------------------------------------
    Unrealized gains on securities.......    $(26)        $(446)        $ -
    Minimum pension liability
      adjustments........................      -            182           -
    ---------------------------------------------------------------------------
    Other comprehensive income...........    $(26)        $(264)        $ -
    ---------------------------------------------------------------------------

16. SEGMENT INFORMATION
    Effective January 1, 1999, the NU system companies, including CL&P, adopted
    SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
    Information."  The NU system is organized between regulated utilities
    and unregulated energy services.  CL&P is included in the regulated
    utilities segment of the NU system and has no other reportable segments.

17. MERGER AGREEMENT WITH CON EDISON
    On October 13, 1999, NU and Con Edison announced that they have agreed
    to a merger to combine the two companies.  The shareholders of NU will
    receive $25 per share in a combination of cash and Con Edison common stock.

    NU shareholders also have the right to receive an additional $1 per share
    if a definitive agreement to sell its interests (other than that now held
    by PSNH) in Millstone 2 and 3 is entered into and recommended by the
    Utility Operations and Management Unit of the DPUC on or prior to the later
    of December 31, 2000, or the closing of the merger.  Further, the value of
    the amount of cash or common stock to be received by NU shareholders is
    subject to increase by an amount of $0.0034 per share per day for each day
    that the transaction does not close after August 5, 2000.

    Upon completion of the merger, NU will become a wholly owned subsidiary of
    Con Edison.  The purchase is subject to the approval of the shareholders
    of both companies and several regulatory agencies.  The companies
    anticipate that these regulatory procedures can be completed by July 2000.

<TABLE>

The Connecticut Light and Power Company and Subsidiaries
-----------------------------------------------------------------------------------------------------------
SELECTED CONSOLIDATED FINANCIAL DATA          1999         1998        1997         1996          1995
-----------------------------------------------------------------------------------------------------------
                                                               (Thousands of Dollars)
<S>                                      <C>          <C>          <C>           <C>           <C>
Operating Revenues.....................  $2,452,855   $2,386,864   $2,465,587    $2,397,460    $2,387,069
Operating Income/(Loss)................     174,749       28,254       (7,619)       59,142       324,026
Net (Loss)/Income......................     (13,568)    (195,725)    (139,597)      (50,868)      205,216
Cash Dividends on Common Stock.........        -            -           5,989       138,608       164,154
Total Assets...........................   5,298,284    6,050,198    6,081,223     6,244,036     6,045,631
Long-Term Debt(a)......................   1,400,056    2,007,957    2,043,327     2,038,521     1,822,018

Preferred Stock Not Subject to
  Mandatory Redemption.................     116,200      116,200      116,200       116,200       116,200

Preferred Stock Subject to
  Mandatory Redemption (a).............      99,539      119,289      155,000       155,000       155,000

Obligations Under Capital Leases (a)...     144,400      162,884      158,118       155,708       172,264

-----------------------------------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited)
-----------------------------------------------------------------------------------------------------------
                                                                 Quarter Ended
-----------------------------------------------------------------------------------------------------------
1999                                        March 31     June 30             September 30     December 31
-----------------------------------------------------------------------------------------------------------
                                                             (Thousands of Dollars)

Operating Revenues.....................     $606,997     $565,069              $667,349        $613,440
                                            ========     ========              ========        ========
Operating Income.......................     $ 20,412     $ 24,370              $ 51,969        $ 77,998
                                            ========     ========              ========        ========
Net (Loss)/Income......................     $(13,705)    $(6,814)              $  9,873        $( 2,922)
                                            ========     ========              ========        ========
-----------------------------------------------------------------------------------------------------------
1998
-----------------------------------------------------------------------------------------------------------

Operating Revenues.....................     $608,961     $561,224              $628,148       $ 588,531
                                            ========     ========              ========       =========
Operating Income/(Loss)................     $  6,261     $ 11,066              $ 29,945       $ (19,018)
                                            ========     ========              ========       =========
Net Loss...............................     $(30,979)    $(26,361)             $(20,405)      $(117,980)
                                            ========     ========              ========       =========
(a) Includes portion due within one year.
</TABLE>


The Connecticut Light and Power Company and Subsidiaries

-------------------------------------------------------------------------------
CONSOLIDATED STATISTICS (Unaudited)
-------------------------------------------------------------------------------
                                        Average
         Gross Electric                 Annual
         Utility Plant                  Use Per
         December 31,       kWh       Residential    Electric
        (Thousands of      Sales       Customer      Customers     Employees
           Dollars)      (Millions)     (kWh)       (Average)     December 31,
-------------------------------------------------------------------------------
1999     $6,007,421        29,317        8,969      1,120,846        2,377
1998      6,345,215        27,356        8,476      1,111,370        2,379
1997      6,639,786        25,766        8,526      1,103,309        2,163
1996      6,512,659        26,043        8,639      1,099,340        2,194
1995      6,389,190        26,366        8,506 (a)  1,094,527        2,285

(a) Effective January 1, 1996, the amounts shown reflect billed and unbilled
    sales.  The 1995 amounts have been restated to reflect this change.