FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549-1004

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

                  For the fiscal year ended DECEMBER 31, 1997


                                       OR

         [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

              For the transition period from          to

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


1-5324         NORTHEAST UTILITIES                               04-2147929
               (a Massachusetts voluntary association)
               174 BRUSH HILL AVENUE
               WEST SPRINGFIELD, MASSACHUSETTS    01090-2010
               Telephone:  (413) 785-5871

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

1-6392         PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE           02-0181050
               (a New Hampshire corporation)
               1000 ELM STREET
               MANCHESTER, NEW HAMPSHIRE          03105-0330
               Telephone:  (603) 669-4000

0-7624         WESTERN MASSACHUSETTS ELECTRIC COMPANY            04-1961130
               (a Massachusetts corporation)
               174 BRUSH HILL AVENUE
               WEST SPRINGFIELD, MASSACHUSETTS    01090-2010
               Telephone:  (413) 785-5871

33-43508       NORTH ATLANTIC ENERGY CORPORATION                06-1339460

               (a New Hampshire corporation)
               1000 ELM STREET
               MANCHESTER, NEW HAMPSHIRE          03105-0330
               Telephone:  (603) 669-4000


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

                                                           Name of Each Exchange
    Registrant               Title of Each Class            on Which Registered


NORTHEAST UTILITIES       Common Shares, $5.00 par value    New York Stock 
                                                             Exchange, Inc.

THE CONNECTICUT LIGHT     9.3% Cumulative Monthly Income    New York Stock
  AND POWER COMPANY      Preferred Securities Series A(1)    Exchange, Inc.
  

(1)Issued  by CL&P Capital, L.P., a wholly owned subsidiary of The Connecticut
   Light and Power Company ("CL&P"), and guaranteed by CL&P.

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


    Registrant                        Title of Each Class


THE CONNECTICUT LIGHT   Preferred Stock, par value $50.00 per share, issuable in
  AMD POWER COMPANY     series, of which the following series are outstanding:

                           $1.90   Series    of 1947     4.96% Series   of  1958
                           $2.00   Series    of 1947     4.50% Series   of  1963
                           $2.04   Series    of 1949     5.28% Series   of  1967
                           $2.20   Series    of 1949     6.56% Series   of  1968
                            3.90%  Series    of 1949     $3.24 Series G of  1968
                           $2.06   Series E  of 1954     7.23% Series   of  1992
                           $2.09   Series F  of 1955     5.30% Series   of  1993
                           4.50%   Series    of 1956

PUBLIC SERVICE COMPANY   Preferred Stock, par value $25.00 per share,issuable in
  OF NEW HAMPSHIRE       series, of which the following series are outstanding:

                           10.60%  Series A  of 1991

WESTERN MASSACHUSETTS    Preferred Stock, par value $100.00 per share,issuable 
  ELECTRIC COMPANY       in series, of which the following series is 
                         outstanding:

                           7.72%   Series B  of 1971

                         Class A Preferred Stock, par value $25.00 per share,
                         issuable in series, of which the following series
                         are outstanding:

                           7.60%   Series    of 1987




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

                             YES  X             NO


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

The aggregate market value of NORTHEAST UTILITIES' Common Shares, $5.00 Par
Value, held by nonaffiliates, was $1,702,506,591 based on a closing sales price
of $12.44 per share for the 136,857,443 common shares outstanding on February
27, 1998.  NORTHEAST UTILITIES holds all of the 12,222,930 shares, 1,000 shares,
1,072,471 shares and 1,000 shares of the outstanding common stock of THE
CONNECTICUT LIGHT AND POWER COMPANY, PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
WESTERN MASSACHUSETTS ELECTRIC COMPANY, and NORTH ATLANTIC ENERGY CORPORATION,
respectively.

Documents Incorporated by Reference:

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


Portions of Annual Reports to Shareholders of the following
companies for the year ended December 31, 1997:

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

Portions of the Northeast Utilities Proxy Statement dated 
      March 31, 1998.                                               Part III



                               GLOSSARY OF TERMS


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



COMPANIES

NU..............................Northeast Utilities
CL&P............................The Connecticut Light and Power Company
Charter Oak or COE..............Charter Oak Energy, Inc.
WMECO...........................Western Massachusetts Electric Company
HWP.............................Holyoke Water Power Company
NUSCO of the Service Company....Northeast Utilities Service Company
NNECO...........................Northeast Nuclear Energy Company
NAEC............................North Atlantic Energy Corporation
NAESCO or North Atlantic........North Atlantic Energy Service Corporation
PSNH............................Public Service Company of New Hampshire
RRR.............................The Rocky River Realty Company
Select Energy...................Select Energy, Inc., formerly NUSCO
                                 Energy Partners, Inc.
Mode 1..........................Mode 1 Communications, Inc.
HEC.............................HEC Inc.
Quinnehtuk......................The Quinnehtuk Company
the System......................The Northeast Utilities System
CYAPC...........................Connecticut Yankee Atomic Power Company
MYAPC...........................Maine Yankee Atomic Power Company
VYNPC...........................Vermont Yankee Nuclear Power Corporation
YAEC............................Yankee Atomic Electric Company
the Yankee Companies............CYAPC, MYAPC, VYNPC, and YAEC

                                        
GENERATING UNITS

Millstone 1.....................Millstone Unit No. 1, a 660-MW nuclear
                                generating unit completed in 1970
Millstone 2.....................Millstone Unit No. 2, an 870-MW nuclear electric
                                generating unit completed in 1975
Millstone 3.....................Millstone Unit No. 3, a 1,154-MW nuclear
                                electric generating unit completed in 1986
Seabrook or Seabrook 1..........Seabrook Unit No. 1, a 1,148-MW nuclear electric
                                generating unit completed in 1986. Seabrook 1
                                went into service in 1990.

REGULATORS
DOE.............................U.S. Department of Energy
DTE.............................Massachusetts Department of Telecommunications
                                and Energy, formerly the Massachusetts
                                Department of Public Utilities (DPU)
DPUC............................Connecticut Department of Public Utility
                                Control
MDEP............................Massachusetts Department of Environmental
                                Protection

                             GLOSSARY OF TERMS

REGULATORS (Continued)

CDEP.......................... Connecticut Department of Environmental
                               Protection
EPA........................... U.S. Environmental Protection Agency
FERC.......................... Federal Energy Regulatory Commission
NHDES......................... New Hampshire Department of
                               Environmental Services
NHPUC......................... New Hampshire Public Utilities Commission
NRC........................... Nuclear Regulatory Commission
SEC........................... Securities and Exchange Commission

OTHER

1935 Act...................... Public Utility Holding Company Act of 1935
CAAA.......................... Clean Air Act Amendments of 1990
DSM........................... Demand-Side Management
Energy Act.................... Energy Policy Act of 1992
EWG........................... Exempt wholesale generator
EAC........................... Energy Adjustment Clause (CL&P)
FAC........................... Fuel Adjustment Clause (WMECO)
FPPAC......................... Fuel and purchased power adjustment clause
                               (PSNH)
FUCO.......................... Foreign utility company

kWh........................... Kilowatt-hour
MW............................ Megawatt
NBFT.......................... Niantic Bay Fuel Trust, lessor of nuclear fuel
                               used by CL&P and WMECO
ISO........................... Independent System Operator, successor to the 
                               New England Power Pool(NEPOOL)
NUGs.......................... Nonutility generators
NUG&T......................... Northeast Utilities Generation and
                               Transmission Agreement


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

                          1997 Form 10-K Annual Report
                               Table of Contents

                                     PART I
                                                                       Page

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

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

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

     Nuclear Plant Outages and Liquidity.........................        3

     Electric Industry Restructuring.............................        4

          General................................................        4
          Massachusetts Restructuring............................        5
          New Hampshire Restructuring............................        7
          Connecticut Restructuring..............................        8

     Rates.......................................................        8

          Connecticut Retail Rates...............................        8
          New Hampshire Retail Rates.............................       11
          Massachusetts Retail Rates.............................       14

     Financing Program...........................................       15

          1997 Financings........................................       15
          1998 Financing Requirements............................       17
          1998 Financing Plans...................................       17
          Financing Limitations..................................       19

     Electric Operations.........................................       23

          Distribution and Load..................................       23
          Regional and System Coordination.......................       25
          Transmission Access and FERC Regulatory Changes........       26
          Fossil Fuels...........................................       27
          Nuclear Generation.....................................       28
          Nuclear Plant Performance and Regulatory Oversight.....       29

     Resource Plans..............................................       38

          Construction...........................................       38
          Future Needs...........................................       39

     Energy-Related Businesses...................................       39

          Energy Products and Services...........................       39
          Private Power Development..............................       39
          Energy Management Services.............................       40

     Other Regulatory and Environmental Matters..................       40

          Environmental Regulation...............................       40
          Electric and Magnetic Fields...........................       44

     FERC Hydro Project Licensing................................       44
     Employees...................................................       45

Item 2.   Properties.............................................       47

Item 3.   Legal Proceedings......................................       52

Item 4.   Submission of Matters to a Vote of Security Holders....       59

                                    PART II

Item 5.   Market for Registrants' Common Equity and Related
          Shareholder Matters....................................       59

Item 6.   Selected Financial Data................................       60

Item 7.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations....................       60

Item 7A.  Quantitative and Qualitative Disclosures About
          Market Risk............................................       60

Item 8.   Financial Statements and Supplementary Data............       61

Item 9.   Changes in Disagreements with Accountants on
          Accounting and Financial Disclosure....................       61

                                    PART III

Item 10.  Directors and Executive Officers of the Registrants....       62

Item 11.  Executive Compensation.................................       67

Item 12.  Security Ownership of Certain Beneficial Owners and
          Management.............................................       80

Item 13.  Certain Relationships and Related Transactions.........       83

                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules, and
          Reports on Form 8-K....................................       84




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


                                     PART I

ITEM 1.    BUSINESS
                         THE NORTHEAST UTILITIES SYSTEM

     Northeast Utilities (NU) is the parent of a number of companies comprising
the Northeast Utilities system (the System) and is not itself an operating
company.  The System has traditionally furnished franchised retail electric
service in Connecticut, New Hampshire and western Massachusetts through four of
NU's wholly owned subsidiaries (The Connecticut Light and Power Company [CL&P],
Public Service Company of New Hampshire [PSNH], Western Massachusetts Electric
Company [WMECO] and Holyoke Water Power Company [HWP]).  In addition to their
franchised retail electric service, CL&P, PSNH, WMECO and HWP (including its
wholly owned subsidiary, Holyoke Power and Electric Company) (the System
companies) together furnish wholesale electric service to various municipalities
and other utilities and participate in limited retail access programs, providing
off-system retail service. The System serves about 30 percent of New England's
electric needs and is one of the 25 largest electric utility systems in the
country as measured by revenues.

     North Atlantic Energy Corporation (NAEC) is a special-purpose operating
subsidiary of NU that owns a 35.98 percent interest in the Seabrook nuclear
generating facility (Seabrook) in Seabrook, New Hampshire, and sells its share
of the capacity and output from Seabrook to PSNH under two life-of-unit, full-
cost recovery contracts.

     Several wholly owned subsidiaries of NU provide support services for the
System companies 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 System companies.
North Atlantic Energy Service Corporation (NAESCO) has operational
responsibility for Seabrook.  Northeast Nuclear Energy Company (NNECO) acts as
agent for the System companies and other New England utilities in operating the
Millstone nuclear generating facilities (Millstone) in Waterford, Connecticut.
Three other subsidiaries construct, acquire or lease some of the property and
facilities used by the System companies.

     NU has three subsidiaries, Charter Oak Energy, Inc. (Charter Oak), HEC Inc.
(HEC) and Select Energy, Inc. (Select Energy), which engage, either directly or
indirectly through subsidiaries, in a variety of energy-related activities. For
information regarding the energy-related activities of these subsidiaries and
the ongoing sale of Charter Oak's assets, see "Energy-Related Businesses."

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

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

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

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

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

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

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

                      NUCLEAR PLANT OUTAGES AND LIQUIDITY

     The length of the ongoing outages at Millstone and the high costs of the
recovery efforts weakened the System companies' 1997 earnings, balance sheets
and cash flows and will continue to have an adverse impact on the System
companies' financial conditions until the units are returned to service.  The
System companies also continue to face numerous civil lawsuits, criminal
investigations and regulatory proceedings related to the outages, and they
expect to incur significantly increased expenditures for replacement power and
operation and maintenance (O&M) expensed at Millstone. CL&P, PSNH and WMECO have
been expensing and will continue to expense all of these costs until the
Millstone units return to service. For more information regarding the costs
associated with the ongoing outages at Millstone, see "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations."

     Millstone 1, 2 and 3 have been out of service since November 4, 1995,
February 21, 1996 and March 30, 1996, respectively. Millstone 1, a 660-MW
boiling water reactor, and Millstone 2, an 870-MW pressurized water reactor,
are each owned 81 percent by CL&P and 19 percent by WMECO. Millstone 3, a
1154-MW pressurized water reactor, is jointly owned by CL&P (52.93 percent),
WMECO (12.24 percent), PSNH (2.85 percent) and other New England utilities.
Subject to various requirements discussed more fully under "Electric
Operations--Nuclear Generation" in this report, management hopes to return
Millstone 3 to service in early Spring of 1998 and Millstone 2 three to four
months after Millstone 3. As part of the System's efforts to reduce spending
in 1998, Millstone 1 has been placed in extended maintenance status in which
all restart-related projects have been suspended and activities at Millstone 1
are limited to those necessary to maintain the plant in a safe condition.
Management will review its options with respect to Millstone 1 in 1998,
including restart, early retirement and other options.

      The System has arranged a variety of financing facilities to fund its cash
requirements, including the nuclear recovery efforts.  The System companies'
ability to borrow under their financing arrangements is dependent on their
satisfaction of contractual borrowing conditions, which under certain agreements
became more restrictive in 1998. Spending levels in 1998, particularly for the
first half of 1998 while Millstone 3 and 2 are expected to be out of service,
have been, and will be, constrained to levels intended to assure that all
financial covenants are satisfied. However, there is no assurance that these
financial covenants will be met as the System companies may encounter additional
unexpected costs from storms, reduced revenues from regulatory actions or the
effect of weather on sales levels. See "Financing Program--Financing
Limitations," for more information regarding specific financial covenants under
the System companies' financing agreements.

     If the return to service of Millstone 3 or Millstone 2 is delayed
substantially beyond the present restart estimates, if some financing facilities
become unavailable because of difficulties in meeting borrowing conditions or
renegotiating extensions, if CL&P and WMECO encounter additional significant
costs or if any other significant deviations from management's assumptions
occur, including materially adverse regulatory decisions, NU, CL&P and WMECO
could be unable to meet their cash requirements. In those circumstances,
management would take even more stringent actions to reduce costs and cash
outflows and attempt to obtain additional sources of funds.  The availability of
these funds would be dependent upon general market conditions and NU's, CL&P's
and WMECO's credit and financial conditions at the time.

     For more information, see "Rates," "Financing Program--Financing
Limitations," "Electric Operations--Nuclear Generation--Nuclear Plant
Performance and Regulatory Oversight," "Item 3. Legal Proceedings" and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations."

                        ELECTRIC INDUSTRY RESTRUCTURING

     GENERAL

     Competition in the energy industry continues to grow as a result of
legislative and regulatory action, technological advances, relatively high
electric rates in certain regions of the country, including New England, surplus
generating capacity and the increased availability of natural gas. These
competitive pressures are particularly strong in the System's service
territories, where legislators and regulatory agencies have been at the
forefront of restructuring. Changes in the industry are expected to place
downward pressure on prices and to increase customer choice through competition.

     Restructuring initiatives in the System companies' service territories have
created uncertainty with respect to future rates and the recovery of "strandable
costs."  Strandable costs are expenditures incurred, or commitments for future
expenditures made, on behalf of customers with the expectation such expenditures
would continue to be recoverable in the future through rates. However, under
certain circumstances these costs might not be recoverable from customers in a
fully competitive electric utility industry (i.e., the costs may result in
above-market energy prices).  The System is particularly vulnerable to
strandable costs because of (i) the System's relatively high investment in
nuclear generating capacity, which has a high cost to build and maintain, (ii)
state and federal government mandated purchased power contracts priced above
market, and (iii) significant regulatory assets, which are those costs that have
been deferred by state regulators for future collection from customers. As of
December 31, 1997, the System companies' net investment in nuclear generating
capacity, excluding its investment in certain regional nuclear companies, was
approximately $3.5 billion and its regulatory assets were approximately $2.2
billion. In addition, based on current market prices, the System companies have
above-market purchase power obligations, the combined net present value of which
is in excess of $1 billion.

     The System's exposure to strandable costs and above-market purchased power
obligations exceeds its shareholders' equity. The System's financial strength
and resulting ability to compete in a restructured environment will be
negatively affected if the System companies were unable to recover their past
investments and commitments. Even if the System companies are given the
opportunity to recover a large portion of their strandable costs, earnings
prospects in a restructured environment will be affected in ways that cannot now
be estimated.

     Massachusetts and New Hampshire have been at the forefront of restructuring
in New England as discussed more fully below. Connecticut has not implemented
restructuring legislation to date, but legislators have proposed broad
restructuring legislation, which will be considered in the Spring of 1998.

     Both PSNH and WMECO have proposed auctioning off their nonnuclear
generating assets, which have a net book value of approximately $190 million and
$60 million, respectively.  If CL&P takes the same approach, it has nonnuclear
generating assets, which have a net book value of approximately $200 million,
that could be sold.  These auctions must be approved by state and federal
regulators.  The System intends to participate in the auctions.

     Additionally, the System companies are actively seeking and/or supporting
legislation permitting securitization of strandable costs recoveries after
mitigation through various required measures. Securitization is the refinancing
of strandable costs through the sale of debt securities by an independent
entity, collateralized by the System companies' interests in their strandable
cost recoveries.

     Management expects that the proceeds from securitization and nonnuclear
generating plant auctions could be used to pay off significant amounts of
subsidiary debt and preferred securities, as well as reducing much of the common
equity investment NU has made in CL&P, PSNH, WMECO and NAEC.  If approved by
regulators, this would have the effect of reducing retail rates and
significantly shrinking the capitalization of each of these companies.
Management currently expects CL&P, PSNH and WMECO would continue to operate
electric distribution and transmission systems, and that CL&P, WMECO, PSNH and
NAEC would continue to hold their current ownership interests in the region's
nuclear generating facilities.

     MASSACHUSETTS RESTRUCTURING

     On November 25, 1997, Massachusetts enacted comprehensive electric utility
industry restructuring legislation. The bill provides that each Massachusetts
electric company, including WMECO, will decrease its rates by 10 percent and
allow all its customers to choose a retail supplier on March 1, 1998. The
statute requires a further five percent rate reduction, adjusted for inflation,
by September 1, 1999.

    In addition, the legislation provides, among other things, for: (i)
recovery of strandable costs through a "transition charge" to customers, subject
to review by the DTE, (ii) a possible limitation on WMECO's return on equity 
should its strandable cost charge go above a certain level, (iii) securitization
of allowed strandable costs; and (iv) divestiture of nonnuclear generation.

    The statute also provides that an electric company must transfer or
separate ownership of generation, transmission and distribution facilities into
independent affiliates or "functionally separate such facilities within 30
business days of federal approval."  Additionally, marketing companies formed by
an electric company are to be separate from the electric company and separate
from generation, transmission or distribution affiliates.

    On December 31, 1997, WMECO filed its restructuring plan with the DTE
consistent with the Massachusetts restructuring legislation.  The plan sets out
the process by which WMECO initiated a 10 percent rate reduction for all
customer rate classes and allowed customers to choose their energy supplier as
of March 1, 1998. WMECO intends to mitigate its stranded costs through several
steps, including divesting WMECO's nonnuclear generating plants at an auction
and securitization of approximately $500 million of strandable costs. WMECO
hopes that it will be able to complete securitization in late 1998. NU expects
that a new generation subsidiary will participate in the competitive bid process
for WMECO's generation resources. As required by the legislation, WMECO will
continue to operate and maintain WMECO's transmission and local distribution
network and deliver electricity to all customers. On February 20, 1998, the DTE
issued an order approving in all material respects WMECO's restructuring plan on
an interim basis, including a 10 percent rate reduction and customer choice of
supplier effective March 1, 1998. WMECO's plan will be subject to extensive
additional review, with evidentiary hearings likely to begin in March or April
1998. A final decision on the plan is expected in 1998.

    Because WMECO reduced rates on March 1, 1998 before the means of financing
restructuring were completed, WMECO's cash flows and financial condition will be
negatively affected.  These impacts would become significant if there are
material delays in the schedule for, or lower than estimated proceeds from, the
divestiture of nonnuclear generation and securitization, or if there are further
delays or cost increases in returning the Millstone units to service. Under the
legislation, if a distribution company claims that it is unable to meet a price
reduction of 10 percent initially and 15 percent by September 1, 1999, the
distribution company may so state to the DTE and the DTE has the authority to
explore other options to achieve the mandated rate reductions.

     Since the restructuring legislation was passed in November 1997, a
citizens group has been organized that is expected to challenge the legislation
by placing a repeal petition on the ballot for voter approval in November 1998.
If Massachusetts' voters should approve the petition, the legislation would be
immediately repealed.


     NEW HAMPSHIRE RESTRUCTURING

      On February 28, 1997, in accordance with earlier legislation, the NHPUC
issued orders related to restructuring the state's electric utility industry and
setting interim strandable cost charges for PSNH. In the orders, the NHPUC
announced a departure from cost-based ratemaking and instead adopted a market-
priced approach to strandable cost recovery.  If PSNH had not received a stay of
these orders, as discussed below, PSNH would have been required to discontinue
accounting under Statement of Financial Accounting Standard No. 71 (SFAS 71),
"Accounting for the Effects of Certain Types of Regulation" and would have had
to remove over $400 million (after taxes) of its regulatory assets from its
balance sheet as early as the quarter ending March 31, 1997.

     In March 1997, PSNH, NU, NAEC and NUSCO filed for a temporary restraining
order, preliminary and permanent injunctive relief and for a declaratory
judgment in the United States District Court for New Hampshire. The case was
subsequently transferred to the United States District Court for Rhode Island
(District Court). Also, in March 1997, the District Court issued a temporary
restraining order, staying the enforcement of the NHPUC's restructuring orders
as they affected PSNH. The District Court had suspended the procedural schedule
associated with this court proceeding pending the resolution of appeals of
certain preliminary rulings by the U.S. Circuit Court of Appeals for the First
Circuit (Appeals Court).  On February 3, 1998, the Appeals Court upheld the
District Court's earlier ruling excluding certain intervenors from the case,
which effectively resolved the other matters on appeal. The case has been
remanded to the District Court for further proceedings. On February 17, 1998,
the commissioners of the NHPUC filed a petition for rehearing with the Appeals
Court. The March 1997 temporary restraining order will remain in effect until
further order of either court.

     If the District Court's stay or another appropriate court action does not
remain in effect or a settlement is not reached by the parties, the write-off
triggered by the NHPUC's orders would result in defaults which, if not waived or
renegotiated, would give investors and lenders the right to accelerate the
repayment of approximately $686 million of PSNH indebtedness and $495 million of
NAEC indebtedness.  These circumstances could force PSNH and NAEC to seek
protection under Chapter 11 of the bankruptcy laws.

     In May 1997, the NHPUC reopened its proceeding to reconsider various
matters in its restructuring orders. In testimony filed with the NHPUC on
November 7, 1997, PSNH proposed a new methodology to quantify its strandable
costs.  Under this proposal, PSNH would divest all owned generation and
purchased-power obligations through an auction.  To the extent that the auction
fails to produce sufficient revenues to cover the net book value of owned
generation and contractual purchased-power payment obligations, the difference
would be recovered from customers through a non-bypassable transition charge.
The proposal also relies upon securitization to reduce rates.

     On December 15, 1997, the NHPUC officially announced that industry 
restructuring would not take place on January 1, 1998. On December 24, 1997, the
Governor's office filed a motion with the NHPUC formally requesting that certain
issues concerning the rate agreement (Rate Agreement) between NU, PSNH and the 
state of New Hampshire, entered into in 1989 in connection with NU's 
reorganization plan to resolve PSNH's bankruptcy, be transferred to the New 
Hampshire Supreme Court for decision. The motion recommends that the NHPUC not 
issue any new rulings concerning the Rate Agreement pending such Supreme Court 
decision. On February 20, 1998, the NHPUC petitioned the New Hampshire Supreme 
Court to review two issues regarding the Rate Agreement: (i) whether the Rate 
Agreement creates private rights which would allow PSNH to seek damages under a 
contract theory if PSNH receives less than the full amount it claims as 
strandable costs under the Rate Agreement, and (ii) if yes, against whom and 
under what conditions would such rights be enforceable. The Supreme Court first
must determine whether to accept the NHPUC's petition.

     On November 12, 1997, PSNH received an unsolicited offer from New Hampshire
Electric Cooperative (NHEC) to purchase PSNH's transmission and distribution
facilities, as well as PSNH's claims for recovery of strandable costs, for $1.4
billion. After a meeting between representatives of PSNH and NHEC and further
review of the proposal, PSNH responded on November 25, 1997 to NHEC that the
lack of certain information in the proposal made it impossible for PSNH to
respond in a definitive manner at this time. No response has been received from
NHEC.

     On February 20, 1998, PSNH forwarded a settlement offer to representatives
from the State of New Hampshire that was consistent with PSNH's proposal in the
restructuring rehearing proceedings discussed above, including among other
things, a 20-percent rate reduction at the beginning of 1999, an auction of
PSNH's nonnuclear generating units and securitization of approximately $1.15
billion of PSNH's strandable costs.

     CONNECTICUT RESTRUCTURING

     Proposed restructuring legislation is currently being considered by the
Connecticut General Assembly, which provides, among other things, for retail
choice to be phased in over a period of time, mandatory rate reductions,
auctioning of generation assets, including nuclear units, and securitization of
a portion of strandable costs.

     For more information regarding restructuring in the wholesale electric
market, see "Electric Operations-Transmission Access and FERC Regulatory
Changes."

                                     RATES
CONNECTICUT RETAIL RATES

     GENERAL

     Approximately 64% of System revenues is derived from CL&P, and 58% of the
book value of the System's electric utility assets is owned by CL&P.

     CL&P's retail rates are subject to the jurisdiction of the DPUC. In July
1996, the DPUC approved a rate settlement agreement with CL&P (the Settlement).
Under the Settlement, CL&P froze base rates until at least December 31, 1997 and
agreed to accelerate the amortization of regulatory assets during the period
that the rate freeze remains in effect.  The Settlement provided that CL&P's
target return on equity (ROE) would be 10.7 percent but did not alter CL&P's
allowed ROE of 11.7 percent.  If CL&P's actual ROE for a calendar year exceeds
the 10.7 percent target after the target regulatory asset amortization ($68
million in 1997) and after adjustment for any incremental NRC billings and any
rate disallowances for nuclear operations, then CL&P shall retain two-thirds of
any surplus and use the remaining one-third to provide a reduction in bills.
CL&P's actual ROE, as adjusted, fell below the target ROE for 1996 and 1997 and,
therefore, the accelerated amortization of regulatory assets was reduced to the
minimum amounts allowed under the Settlement ($73 million in 1996 and $54
million in 1997).  For each full year that the rate freeze remains in effect,
CL&P agreed to amortize an additional $44 million of regulatory assets. As of
December 31, 1997, CL&P's regulatory assets totaled approximately $1.3 billion.

     The DPUC is required to review a utility's rates every four years if there
has not been a rate proceeding during such period.  The DPUC conducted such a
review of CL&P's rates in 1997, including an analysis of the possibility of
removing one or more of the Millstone nuclear units from CL&P's rate base.  On
December 31, 1997, the DPUC issued its ruling in this matter. The decision did
not change CL&P's rates, but set forth findings and conclusions that could be
used to do so in additional proceedings.  The most significant conclusion was
that Millstone 1 should be removed from CL&P's rate base, which could cause an
annual revenue reduction of approximately $30.5 million.  The decision stated
that the DPUC would open an interim rate case immediately to remove Millstone 1
from CL&P's rates and simultaneously to remove an additional $110.5 million of
other expenses from rates related to perceived overearnings. The decision also
provided that the DPUC will schedule hearings for April 1, 1998 and June 1, 1998
to determine the status of Millstone 3 and Millstone 2, respectively.  If the
units are not operating by those dates, the DPUC will consider their removal
from rates. Finally, CL&P was directed to file a full rate case on April 1,
1998, later extended to June 1, 1998, to address potential overearnings
amounting to an additional $150 million in 1998. The effective date of any rate
order will be September 28, 1998.

     On February 25 1998, the DPUC issued a decision in CL&P's interim rate
case, which was consistent with the December 31, 1997 four year rate decision.
The decision required a $30.5 million credit to customer bills (1.39 percent
rate decrease) to reflect the removal of Millstone 1 from rates.  The reduction
reflects the removal from rates of O&M, depreciation and investment return
related to Millstone 1, but allows CL&P to recover the replacement power costs
associated with Millstone 1. In addition, the decision requires CL&P to
accelerate the amortization of regulatory assets by approximately $110.5
million, which includes the $44 million from the 1996 Settlement. These rates
were effective as of March 1, 1998.

     On July 1, 1997, CL&P submitted continued unit operation studies to the
DPUC showing that, under base case assumptions, Millstone 1 had a net present
value to System customers (as compared to the cost of shutting down the unit and
incurring replacement power costs) of approximately $70 million during the
remaining thirteen years of its operating license and Millstone 2 had a net
present value to System customers (on assumptions consistent with those used
with Millstone 1) of approximately $500 million during the remaining eighteen
years of its operating license. Two other cases submitted to the DPUC based on
higher assumed O&M costs, which CL&P considered less likely, indicated that
Millstone 1 would be uneconomic in varying degrees. The DPUC has stated it will
consider these analyses in the context of CL&P's next integrated resource
planning proceeding which begins in April 1998.

     However, in light of the delay in restarting Millstone 1, management will
continue to review its options with respect to this unit, including restart,
early retirement and other options.  Among the various matters that management
must consider with respect to Millstone 1 are certain Connecticut state law
issues. In the four-year rate review proceeding, the DPUC noted that CL&P may
not be able to recover its remaining investment in Millstone 1 if it were to
determine that the unit had been prematurely shut down due to management
imprudence.  Additionally, there is a Connecticut statute that may limit CL&P's
ability to collect decommissioning charges if Millstone 1 were to be retired
before the end of its expected life. The net unrecovered Millstone 1 plant cost
and unrecovered decommissioning cost at December 31, 1997 were approximately
$216 million and $212 million, respectively. For more information regarding
decommissioning matters, see "Electric Operations--Nuclear Generation---
Decommissioning."

     PRUDENCE AND ENERGY ADJUSTMENT CLAUSE

     On July 30, 1997, the DPUC issued a decision disallowing CL&P's recovery of
all of the replacement power costs associated with the ongoing outages at
Millstone.  CL&P has expensed, and will continue to expense, the these costs as
they are incurred.

     In October 1996, the DPUC issued its final order establishing an Energy
Adjustment Clause (EAC), which became effective on January 1, 1997.  The EAC is
designed to reconcile and adjust every six months the difference between actual
fuel costs and the fuel revenue collected through base rates. The Connecticut
Office of Consumer Counsel (OCC) appealed the DPUC's EAC order, and the trial
court upheld the DPUC's final order.  The OCC subsequently appealed the trial
court's decision, and the matter is pending before the Connecticut Supreme
Court.

     CL&P agreed to a zero EAC rate for the period January 1, 1997 through June
30, 1997.  On December 31, 1997, the DPUC approved an EAC rate of $.00112 for
the period July 1, 1997 to December 31, 1997, which recovered approximately
$11.5 million of additional fuel costs over this period. The decision upheld an
earlier procedural order that excluded replacement power costs following the
early retirement of the Connecticut Yankee nuclear unit (CY) (approximately $18
million for the July - December 1997 period, and approximately $4 million per
month in the upcoming period January - June 1998)  until a final decision in the
pending CY FERC proceeding. CL&P has appealed the DPUC's ruling related to CY
replacement power costs. For more information regarding the early retirement of
CY and the FERC proceeding related thereto, see "Electric Operations - Nuclear
Generation."

     On December 23, 1997, the DPUC approved an EAC rate of $.00273/per kWh for
the period January 1, 1998 to June 30, 1998, which will recover approximately
$27.9 million of additional fuel costs over this period.

     DEMAND-SIDE MANAGEMENT

     CL&P provides demand side management (DSM) programs for its residential,
commercial and industrial customers.  CL&P is allowed to recover DSM costs in
excess of costs reflected in base rates over periods ranging from approximately
four to ten years.

     On April 16, 1997, the DPUC approved CL&P's DSM budget of $36 million for
1997. On October 15, 1997, CL&P and other interested parties filed a stipulation
with the DPUC requesting that the DPUC approve certain programs and establish a
budget level of $32.7 million for 1998 and $28.8 million for 1999. The DPUC is
expected to issue a decision on CL&P's DSM filing in March 1998. CL&P's
unamortized DSM costs at December 31, 1997, excluding carrying costs, which are
collected currently, were approximately $52.1 million.

NEW HAMPSHIRE RETAIL RATES

     GENERAL

     Approximately 24% of System revenues is derived from PSNH, and 18% of the
book value of the System's electric utility assets is owned by PSNH.

     PSNH's Rate Agreement provided for seven base rate increases of 5.5 percent
per year beginning in 1990 and a comprehensive fuel and purchased power
adjustment clause (FPPAC).  The final base rate increase went into effect on
June 1, 1996. The Rate Agreement provides that PSNH's rates are subject to
traditional rate regulation after the fixed rate period, which expired on May
31, 1997. The FPPAC, however, would continue through May 31, 2001 and other Rate
Agreement requirements would continue in accordance with the terms of the
agreement.

      On May 2, 1997, PSNH made a rate filing with the NHPUC requesting that
base rates remain at their current level after May 31, 1997.  By order dated
November 6, 1997, the NHPUC ordered a temporary rate reduction for PSNH at a
revenue level 6.87 percent lower than then-current rates. The NHPUC also set an
interim return on equity of 11 percent.  The temporary rates became effective
December 1, 1997. A final decision, which will be reconciled to July 1, 1997, is
not expected to be issued until September 1998. A portion of this reduction was
offset by an increase to rates through the FPPAC described below.

     FPPAC AND PRUDENCE

     The FPPAC provides for the recovery or refund by PSNH, for the ten-year
period beginning on May 16, 1991, of the difference between its actual prudently
incurred energy and purchased power costs and the estimated amounts of such
costs included in base rates established by the Rate Agreement.  The FPPAC
amount is calculated for a six-month period based on forecasted data and is
reconciled to actual data in subsequent FPPAC billing periods.

     On June 3, 1996, the NHPUC ordered PSNH to refund $41.5 million, which
includes $5 million of interest related to nonutility generation (NUG) costs
which had been previously collected through the FPPAC.  The refund, which was
made by crediting customer bills through May 31, 1997, was implemented on June
1, 1996.  When actual fuel and purchased power costs are less than the estimated
costs in base rates, PSNH is permitted to retain revenues to offset previously
deferred charges, including the $41.5 million refund.  By this method PSNH fully
recovered the $41.5 million by May 1, 1997.

     On December 3, 1996, the NHPUC approved PSNH's FPPAC rate for December 1,
1996 through May 31, 1997, representing an overall rate decrease of 1.0 percent.

     On May 27, 1997, the NHPUC suspended the FPPAC proceeding related to the
June 1, 1997 to November 30, 1997 FPPAC period and ordered a credit FPPAC rate
of $.00481/per kWh, which resulted in PSNH refunding approximately $15 million
of fuel costs over the period.  On September 11, 1997, the NHPUC consolidated
this FPPAC proceeding with the December 1, 1997 through May 31, 1998 FPPAC
proceeding.

     On February 10, 1998, the NHPUC issued its written decision confirming its
order on December 1, 1997 of an FPPAC rate of $.00266 per/kWh to be charged for
December 1, 1997 through May 31, 1998, which will allow PSNH to collect
approximately $9 million of additional fuel costs over the period. The new FPPAC
rate increased customer bills by approximately six percent, which was offset in
great part by the 6.87 percent temporary base rate decrease described above. The
new rate also continues to defer a substantial portion of costs.  In addition,
recovery of the Seabrook deferred return (approximately $127 million annually)
is scheduled to begin in June 1998. For more information regarding the Seabrook
deferred return, see "Seabrook Power Contracts" below.

     The NHPUC also confirmed in its February 10, 1998, FPPAC decision that it
would disallow approximately $3 million in replacement power costs and require
PSNH to set aside $10 million as a reserve for potential overpayments due to the
fact that PSNH has not required small power producers to reduce deliveries
during so-called "light-loading" periods, pending the NHPUC's review of this
matter.  The decision also alleged various breaches of the Rate Agreement and
ordered PSNH to meet with the State to discuss these matters. Finally, the
decision indicated that the NHPUC would open a proceeding to review whether the
proceeds of the sale of steam generators (approximately $ 20.9 million for
NAEC's share) related to the canceled Unit 2 at Seabrook station should flow
through rates to reduce customers bills.

          PURCHASE POWER CONTRACTS

     The costs associated with purchases by PSNH from certain NUGs at prices
above the level assumed in rates are deferred and recovered through the FPPAC.
As of December 31, 1997, NUG deferrals, including previously approved buy-out
costs, totaled approximately $191.7 million.

     Under the Rate Agreement, PSNH and the State of New Hampshire have an
obligation to use their best efforts to renegotiate burdensome purchased power
arrangements with certain specified hydroelectric and wood-burning NUGs that
were selling their output to PSNH under long-term NHPUC rate orders.  If
approved, PSNH will exchange near-term cash payments for partial relief from
high-cost purchased power obligations to the NUGs, with such payments and an
associated return on the unamortized portion being recoverable from customers in
a future amortization period.

      PSNH reached agreements requiring NHPUC approval with the six remaining
wood-fired NUGs. The six agreements could result in net savings of approximately
$440 million to PSNH's customers over a period of 20 years in exchange for
upfront payments of approximately $250 million recoverable in future charges to
customers.

     In early 1996, the NHPUC began a proceeding to decide whether to approve
these settlement agreements.  Despite a determination by the New Hampshire
Attorney General finding that PSNH had used its best efforts to renegotiate the
13 agreements, in March 1996, the NHPUC decided to open a docket, which is
ongoing, to independently review that issue.

     In January 1997, the NHPUC issued an order approving one of the six NUG
settlements.  However, the order expressly indicated that PSNH is not assured of
recovering all of the payments PSNH must make pursuant to the agreement. In
addition, the order required PSNH and the NUG owner to contribute an undisclosed
amount to create a fund designed to mitigate the impact of the buydown agreement
on the wood-fuel industry. On February 14, 1997, PSNH filed a response with the
NHPUC stating that the uncertainties of recovery stated in the order made it
impossible to finance the upfront payments for the agreement.  The NHPUC has
initiated a proceeding requiring PSNH to show cause why it has not been
imprudent in failing to close on this agreement.  On January 12, 1998, the NHPUC
indicated that it would reject the five remaining wood settlement agreements.

      The New Hampshire Legislature is considering a number of proposals that
could impact PSNH's ability to renegotiate and refinance NUGs rate orders.

     UNAMORTIZED PSNH ACQUISITION COSTS

     The Rate Agreement also provides for the recovery by PSNH through rates of
unamortized PSNH acquisition costs, which are the aggregate value placed by
PSNH's reorganization plan on PSNH's assets in excess of the net book value of
its non-Seabrook assets and the value assigned to Seabrook.  The unrecovered
balance of PSNH acquisition costs at December 31, 1997 was approximately $402.3
million.  In accordance with the Rate Agreement, approximately $32.9 million of
this amount will be recovered through rates by June 1, 1998, and the remaining
amount, approximately $369.4 million, will be recovered through rates by 2011.
PSNH earns a return each year on the unamortized portion of the costs.  For more
information regarding PSNH's recovery of these costs, see "Unamortized PSNH
Acquisition Costs" in the notes to NU's financial statements and "Unamortized
Acquisition Costs" in the notes to PSNH's financial statements.

     SEABROOK POWER CONTRACTS

     PSNH and NAEC have entered into two power contracts that collectively
obligate PSNH to purchase NAEC's 35.98 percent ownership of the capacity and
output of Seabrook for the term of Seabrook's NRC operating license and to pay
NAEC's "cost of service" during this period, whether or not Seabrook continues
to operate.  NAEC's cost of service includes all of its prudently incurred
Seabrook-related costs, including O&M expenses, cost of fuel, depreciation of
NAEC's recoverable investment in Seabrook and a phased-in return on that
investment.  The payments by PSNH to NAEC under these contracts constitute
purchased power costs for purposes of the FPPAC and are recovered from PSNH
customers under the Rate Agreement.  Decommissioning costs are separately
collected by PSNH in its base rates.  See "Rates--New Hampshire Retail Rates---
General" and--"FPPAC and Prudence" for information relating to the Rate
Agreement.  At December 31, 1997, NAEC's net utility plant investment in
Seabrook, including fuel, was approximately $667.4 million.

     If Seabrook were retired before the expiration of its NRC operating license
term, NAEC would continue to be entitled under the power contracts to recover
its remaining Seabrook investment and a return on that investment and its other
Seabrook-related costs over a 39-year period, less the period during which
Seabrook has operated.

     The power contracts provide that NAEC's return on its "allowed investment"
in Seabrook (its investment in working capital, fuel, capital additions after
the date of commercial operation and a portion of the initial investment) is
calculated based on NAEC's actual capitalization over the term of the contracts,
its actual debt and preferred equity costs and a common equity cost of 12.53
percent for the first ten years of the contracts, and thereafter at an equity
rate of return to be fixed in a filing with FERC.

     As of May 1, 1996, NAEC had completed phasing into rates 100 percent of the
recoverable portion of its investment in Seabrook. From the date of acquisition
through November 1997, NAEC recorded $203.9 million of deferred return on its
investment in Seabrook.  At November 30, 1997, NAEC's utility plant includes
$84.1 million of deferred return that was transferred by PSNH as part of the
Seabrook assets to NAEC on the acquisition date. Beginning on December 1, 1997,
the deferred return, including the portion transferred to NAEC, is currently
being billed through the Seabrook power contracts to PSNH and in accordance with
the Rate Agreement is to be fully recovered from customers by May 2001.

MASSACHUSETTS RETAIL RATES

     GENERAL

     Approximately 11% of System revenues is derived from WMECO, and 11% of the
book value of the System's electric utility assets is owned by WMECO.

     WMECO's retail rates are subject to the jurisdiction of the DTE.  The rates
charged under HWP's contracts with its industrial customers are not subject to
the ratemaking jurisdiction of any state or federal regulatory agency.

     In April 1996, the DTE approved a settlement proposed by WMECO and the
Massachusetts Attorney General (the Agreement).  The Agreement continued,
through February 1998, a 2.4-percent rate reduction instituted in June 1994.
The Agreement terminated pending reviews of WMECO's generating plant performance
and any potential reviews associated with Millstone 2's 1994-1995 extended
outage.  The Agreement also accelerated WMECO's amortization of strandable
assets by approximately $6 million in 1996 and $10 million in 1997.

     The Massachusetts restructuring legislation requires the DTE to issue rules
instituting performance-based regulation for the distribution and transmission
companies.  No regulations have yet been promulgated.

WMECO FUEL ADJUSTMENT CLAUSE AND GENERATING UNIT OPERATING PERFORMANCE

     Before the restructuring legislation, fuel costs were collected by
Massachusetts utilities on a current basis by means of a forecasted quarterly
fuel clause. In addition to energy costs, the fuel adjustment clause (FAC)
includes capacity and transmission charges and credits that result from short-
term transactions with other utilities and from certain FERC-approved contracts
among the System operating companies.  The Massachusetts restructuring
legislation effectively eliminates the FAC, effective March 1, 1998.

     On February 28, 1997, the DTE approved a settlement agreement between WMECO
and the Massachusetts Attorney General to maintain WMECO's FAC at its August
1996 level through August 1997.  The settlement also provided that WMECO would
not seek carrying charges on any deferred fuel costs incurred as a result of
maintaining the FAC at the agreed-upon level.  In accepting the settlement, the
DTE deferred any inquiry into WMECO's fuel expenses, including replacement power
fuel expenses related to the current Millstone outages.

     On August 20, 1997, WMECO filed with the DTE a joint motion for approval of
a settlement agreement with the Massachusetts Attorney General which would apply
an FAC of $.0080/per kWh, thereby allowing WMECO to recover approximately $15.3
million of additional fuel costs for the period September 1997 through February
1998.  Under the terms of the settlement, WMECO would not seek to recover the
replacement power costs associated with the Millstone outages that accrue during
the same six month period. WMECO indicated in its restructuring filing on
December 31, 1997 that it would not seek recovery of any of the replacement
power costs associated with the ongoing Millstone outages. WMECO has been
expensing and will continue to expense these costs.

                           FINANCING PROGRAM

     1997 FINANCINGS

     On November 21, 1996, NU, CL&P and WMECO entered into a new three-year
Revolving Credit Agreement (the Revolving Credit Agreement) with a group of
banks.  On May 30, 1997, the Revolving Credit Agreement was amended to reflect
(i) the provision by CL&P of first mortgage bonds in the principal amount of
$225,000,000 and by WMECO of first mortgage bonds in the principal amount of
$90,000,000 as collateral for their respective obligations under the Revolving
Credit Agreement, (ii) revised financial covenants consistent with NU's, CL&P's
and WMECO's financial forecasts and (iii) an upfront payment to the lenders in
order to maintain commitments under the Revolving Credit Agreement. Under the
Revolving Credit Agreement, as amended, CL&P and WMECO are able to borrow up to
approximately $225,000,000 and $90,000,000, respectively, subject to a total
borrowing limit of $313,750,000 for all three borrowers.  NU will not be able to
borrow under the Revolving Credit Agreement until NU, CL&P and WMECO have
maintained a consolidated operating income to consolidated interest expense
ratio of at least 2.50 to 1 for two consecutive fiscal quarters. NU, CL&P and
WMECO currently cannot meet this requirement.  At December 31, 1997, CL&P and
WMECO had $35 million and $15 million, respectively, outstanding under the
Revolving Credit Agreement. For more information regarding other covenant
requirements under this agreement, see "Financing Limitations" below.

     On June 26, 1997, CL&P issued $200 million of First and Refunding Mortgage
Bonds, 1997 Series B (CL&P Series B Bonds). The net proceeds of the sale of the
CL&P Series B Bonds were used for repayment of short-term debt incurred for
general working capital purposes, including costs associated with the current
outages at the Millstone units. Pursuant to an agreement between CL&P and the
purchasers of the CL&P 1997 Series B Bonds, such purchasers were granted certain
registration rights. On October 9, 1997, CL&P issued $200 million of First and
Refunding Mortgage Bonds, 1997 Series C (CL&P Series C Bonds) in an exchange
offer to the holders of the CL&P Series B Bonds.  No CL&P Series B Bonds
remained outstanding subsequent to the exchange of CL&P Series C Bonds for CL&P
Series B Bonds. The CL&P Series C Bonds bear interest at an annual rate of 7.75
percent and mature on June 1, 2002.

     On July 31, 1997, WMECO issued $60 million of First Mortgage Bonds, 1997
Series B (WMECO 1997 Series B Bonds). The net proceeds of the sale of the WMECO
1997 Series B Bonds were used to repay short-term debt that was incurred to
refinance or refund debt and preferred stock and for general working capital
purposes, including costs associated with the ongoing outages at the Millstone
units. The WMECO 1997 Series B Bonds bear interest at an annual rate of 7.375
percent and will mature on July 1, 2001.

     CL&P and WMECO established facilities in 1996 under which they may sell
from time to time up to $200 million and $40 million, respectively, of their
accounts receivable and accrued utility revenues.

     In October 1997, CL&P completed the process of restructuring its accounts
receivable sales agreement to comply with the requirements of Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," so that the
transactions occurring under the agreement are accounted for as sales and not
secured borrowings.  As part of meeting these requirements, CL&P established a
single-purpose, wholly owned subsidiary, CL&P Receivables Corporation (CRC).
CRC's sole purpose is to purchase receivables from CL&P and periodically resell
undivided ownership interests in those receivables to a third-party purchaser.
As collections reduce previously sold undivided interests, new receivables may
be sold.  All receivables transferred to CRC become assets owned by CRC.

     In 1997, WMECO also restructured its accounts receivable sales agreement to
permit it to treat transactions occurring under the agreement as sales.  Like
CL&P, WMECO established a single-purpose, wholly owned subsidiary, WMECO
Receivables Corporation (WRC). WRC operates in substantially the same manner as
does CRC. As of December 31, 1997, approximately $70 million and $20 million of
receivables had been sold by CRC and WRC, respectively, to third party
purchasers.  For information regarding the effect of downgrades of the credit
ratings of CL&P and WMECO on the availability of these facilities, see
"Financing Limitations" below. As of December 31, 1997, approximately $70
million and $20 million of receivables had been sold to third party purchasers
under CL&P's and WMECO's respective agreements.

     Total System debt, including short-term and capitalized lease obligations,
was $4.15 billion as of December 31, 1997, compared with $4.15 billion as of
December 31, 1996 and $4.25 billion as of December 31, 1995. For more
information regarding System financing, see "Notes to Consolidated Statements of
Capitalization" in NU's financial statements and other footnotes related to
long-term debt, short-term debt and the sale of accounts receivables, as
applicable, in the notes to NU's, CL&P's, PSNH's, WMECO's and NAEC's financial
statements and "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations."


     1998 FINANCING REQUIREMENTS

     The System's aggregate capital requirements for 1998, including
requirements under the Niantic Bay Fuel Trust (NBFT) (discussed under "1998
Financing Plans") and excluding a one percent improvement fund* for certain
WMECO First Mortgage Bonds, are approximately as follows:

                         CL&P   PSNH  WMECO  NAEC  Other  System
                                       (Millions)

   Construction        $164.9 $ 41.9 $26.5  $ 8.9 $24.9  $267.1
   Nuclear Fuel          37.6    1.7   8.4   12.9    -     60.6
   Maturities            20.0  170.0   9.8    -      -    199.8
   Cash Sinking Funds     3.8   25.0   1.5   20.0  24.7    75.0

          Total        $226.3 $238.6 $46.2  $41.8 $49.6  $602.5



     *With the issuance of the CL&P Series B Bonds, the one percent sinking fund
for CL&P was eliminated under the provisions of the sixty-seventh supplemental
indenture.

     For further information on NBFT, see "Leases" in the notes to NU's, CL&P's
and WMECO's financial statements.  For further information on the System's 1998
and five-year financing requirements, see "Notes to Consolidated Statements of
Capitalization" in NU's financial statements, "Long-Term Debt" in the notes to
CL&P's, PSNH's, WMECO's and NAEC's financial statements and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations."

     1998 FINANCING PLANS

     The System companies generally propose to finance their 1998 requirements
through internally generated funds and short-term borrowings.

     In February 1998, because of borrowing restrictions on NU under the
Revolving Credit Agreement, NU entered into a separate $25 million 364-day
revolving credit agreement with one bank.  See "Financing Program - 1997
Financings."

     In 1982, CL&P and WMECO entered into arrangements under which NBFT owns and
finances the nuclear fuel for Millstone 1 and 2 and CL&P's and WMECO's share of
the nuclear fuel for Millstone 3. NBFT obtains funds from bank loans and the
sale of intermediate term notes.  The fuel is leased to CL&P and WMECO by the
trust while it is used in the reactors, and ownership of the fuel is transferred
to CL&P and WMECO when it is permanently discharged from the reactors.  CL&P and
WMECO are severally obligated to make quarterly lease payments, to pay all
expenses incurred by NBFT in connection with the fuel and the financing
arrangements, to purchase the fuel under certain circumstances and to indemnify
all the parties to the transactions.

     The NBFT arrangements with the banks were recently extended from February
19, 1998 to July 31, 1998, with the amount available under a credit agreement
relating to the trust decreasing from $150 million to $100 million. The
extension is contingent upon CL&P and WMECO issuing approximately $72 million
and $18 million, respectively, of first mortgage bonds on or before May 1, 1998
to secure both the $100 million of bank credit and $80 million of Series F
intermediate term NBFT notes.  These notes mature on June 1, 1998, and CL&P and
WMECO intend to cause the trust to refinance them at such time.

     CL&P, WMECO, PSNH and HWP have outstanding variable rate pollution control
bonds backed by Letters of Credit (LOCs) from various banks.  All of the
outstanding LOCs are scheduled to expire in 1998.  For each LOC, the company
must either obtain an extension of the current LOC, obtain a replacement LOC,
convert the outstanding variable rate security to a fixed rate security or
retire the security.  The total principal amounts of the pollution control bonds
affected are approximately $362 million for CL&P, $229 million for PSNH, $54
million for WMECO and $38 million for HWP.

     The companies' ability to extend such LOCs will be dependent upon a number
of factors at the time of such transaction, including their own financial
condition, the availability of bank credit generally, receipt of necessary
regulatory approvals and other factors. A portion of the debt secured in such
fashion may be able to be remarketed as fixed rate debt without LOC support, but
there is no assurance this could be done were there to be a shortfall in LOC
support. Failure to obtain LOC extensions and to remarket such debt in fixed
mode could lead to a request by the LOC banks for payment upon the expiration of
the LOC arrangements. Generally speaking, such debt is payable on a demand
basis. At this time the companies believe they will be able to negotiate LOC
extensions and/or fix the interest rates of unsupported bonds so as to avoid
such a situation.

     PSNH has a first mortgage bond maturity of $170 million, plus accrued
interest, on May 14, 1998. PSNH expects to meet that maturity with cash on hand
and a borrowing under a revolving credit agreement.  PSNH is negotiating with
banks the terms under which PSNH's current $125 million revolving credit
agreement will be restructured, in part by the provision of first mortgage bonds
and accounts receivables as collateral, in part by reducing the amount of
commitments to $75 million from $100 million, and in part by adjusting the
pricing terms.  In addition, $229 million of PSNH LOCs mature on May 1, 1998.
PSNH proposes to convert approximately half of the pollution control bonds to
which those LOCs relate from floating rate mode to fixed rate mode, thereby
eliminating the need for LOCS on that portion.  PSNH is negotiating with banks
the terms under which LOCs for the balance will be renewed, expected to be in
part by adding accounts receivables as collateral and in part by adjusting the
pricing terms.

     In December 1997 and January 1998, Moody's Investors Service (Moody's) and
Standard & Poor's (S&P) downgraded the senior secured debt of CL&P, WMECO and
NU, as well as the preferred stock of CL&P and WMECO. All NU System securities
remain under review for further downgrade.  This was the fourth time Moody's and
S&P have downgraded CL&P and WMECO securities since the Millstone units went on
the NRC watch list in 1996. All of the System's securities are rated below
investment grade. Rating agency downgrades generally increase the future cost of
borrowing funds because lenders will want to be compensated for increased risk
and also affect the terms and ability of the System companies to extend existing
agreements.  See "Financing Limitations" regarding the effect of downgrades on
specific System financing arrangements.



     FINANCING LIMITATIONS

     Many of the System companies' charters and borrowing facilities contain
financial limitations that must be satisfied before borrowings can be made and
for outstanding borrowings to remain outstanding.  To date, CL&P, PSNH, WMECO
and NAEC have satisfied all financial covenants required under their respective
borrowing facilities, but NU, CL&P and WMECO needed and obtained waivers of
interest coverage covenants and renegotiated covenant levels for certain
agreements, as described below.

     Under the Revolving Credit Agreement, CL&P and WMECO are prohibited from
incurring additional debt unless they are able to demonstrate, on a pro forma
basis for the prior quarter and going forward, that their equity ratios will be
at least 31 percent of their total capitalization through December 31, 1997 and
32 percent thereafter. At December 31, 1997, CL&P'S and WMECO's common equity
ratios were 31.4 percent and 33.1 percent, respectively.

     The Revolving Credit Agreement also requires, beginning in the fourth
quarter of 1997, each of CL&P and WMECO to demonstrate that its quarterly ratio
of operating income to interest expense will be at least 1.25 to 1 through
December 31, 1997; 1.50 to 1 for the quarters ended March 31, 1998 and June 30,
1998; 2.00 to 1 for the quarter ended September 30, 1998; and 2.50 to 1 at the
end of each quarter thereafter. For the quarter ended December 31, 1997,  CL&P's
and WMECO's interest coverage ratios were 1.79 to 1 and 1.39 to 1, respectively.

     PSNH and NAEC are parties to a variety of financing agreements providing
that the credit thereunder can be terminated or accelerated if they do not
maintain specified minimum ratios of common equity to capitalization (as defined
in each agreement).  For PSNH, the minimum common equity ratio in a letter of
credit agreement and in a revolving credit agreement is not less than 30
percent.  At December 31, 1997, PSNH's common equity ratio was 43.0 percent.
For NAEC, the minimum common equity ratio required under its term loan agreement
is 25 percent; at December 31, 1997, NAEC's common equity ratio was 30.7
percent.

     In addition, PSNH's revolving credit agreement requires that for PSNH to
obtain and maintain borrowings thereunder, it must demonstrate that its ratio of
operating income to interest expense will be at least 1.75 to 1 at the end of
each fiscal quarter for the remaining term of the agreement.  The NAEC term loan
agreement requires a ratio of adjusted net income to interest expense of 1.35 to
1 through December 31, 1997 and 1.50 to 1 thereafter.   For the 12-month period
ended December 31, 1997 the corresponding ratios for PSNH and NAEC,
respectively, were 4.38 to 1 and 1.79 to 1, respectively.

     In addition, PSNH and NAEC are parties to a variety of financing agreements
providing in effect that the credit thereunder can be terminated or accelerated
if there are actions taken, either by PSNH or NAEC or by the State of New
Hampshire, that deprive PSNH and/or NAEC of the benefits of the Rate Agreement
and/or the Seabrook Power Contracts.

     The amounts of short-term borrowings that may be incurred by NU, CL&P,
PSNH, WMECO, HWP and NAEC are also subject to periodic approval by the SEC under
the 1935 Act. The following table shows the amount of short-term borrowings
authorized by the SEC for each company as of January 1, 1998 and the net amounts
of outstanding short-term debt and cash investments of those companies at the
end of 1997 and as of February 28, 1998:


                                                  Short-Term Debt
                        Maximum Authorized         Outstanding
                         Short-Term Debt       and (Cash Investments)*

                                            12/31/97    2/28/98      
                                           (Millions)
NU..................            $200         $ (34)      $ (28)
CL&P ...............             375            96         123
PSNH ...............             125           (94)       (131)
WMECO...............             150            29          38
HWP.................               5            (9)         (9)
NAEC................              60            10         (14)
OTHER...............             n/a           (77)        (81)

          Total                              $ (79)      $(101)



* These columns include borrowings of or cash investments by various System
companies from NU and other System companies.  Total System short-term
indebtedness to unaffiliated lenders was $50 million at December 31, 1997 and
$125 million at February 28, 1998.

     The supplemental indentures under which NU issued $175 million in
principal amount of 8.58 percent amortizing notes in December 1991 and $75
million in principal amount of 8.38 percent amortizing notes in March 1992
contain restrictions on dispositions of certain System companies' stock,
limitations of liens on NU assets and restrictions on distributions on and
acquisitions of NU stock.  Under these provisions, NU, CL&P, PSNH and WMECO may
not dispose of voting stock of CL&P, PSNH or WMECO other than to NU or another
System company, except that CL&P may sell voting stock for cash to third persons
if so ordered by a regulatory agency so long as the amount sold is not more than
19 percent of CL&P's voting stock after the sale.  The  restrictions also
generally prohibit NU from pledging voting stock of CL&P, PSNH or WMECO or
granting liens on its other assets in amounts greater than  five percent of the
total common equity of NU.  As of December 31, 1997, no NU debt was secured by
liens on NU assets.  Finally, NU may not declare or make distributions on its
capital stock, acquire its capital stock (or rights thereto), or permit a System
company to do the same, at times when there is  an event of default under the
supplemental indentures under which the amortizing notes were issued.

     The charters of CL&P and WMECO contain preferred stock provisions
restricting the amount of unsecured debt those companies may incur.  As of
December 31, 1997, CL&P's and WMECO's charters permit CL&P and WMECO to incur an
additional $450 million and $114 million, respectively, of unsecured debt.

     In connection with NU's acquisition of PSNH, the DPUC imposed certain
financial conditions intended to prevent NU from relying on CL&P resources if
the PSNH acquisition strained NU's financial condition.  The principal
conditions provide for a DPUC review if CL&P's common equity falls to 36 percent
or below, require NU to obtain DPUC approval to secure NU financings with CL&P
stock or assets and obligate NU to use its best efforts to sell CL&P preferred
or common stock to the public if NU cannot meet CL&P's need for equity capital.
If, at any time, CL&P projects that its common equity ratio as of the end of the
next fiscal quarter will be below 36%, or plans to take any action that will
result or can reasonably be expected to result in reducing the above ratio below
36%, then CL&P is required to notify the DPUC in writing at least 45 days before
such action is taken or event is anticipated to occur.  The DPUC may conduct a
proceeding after its receipt of CL&P's notice. CL&P did not meet this condition
as of June 30, 1997, and notified the DPUC in accordance with the foregoing
requirement. The DPUC acknowledged receipt of the notice and has taken no
further action.

     While not directly restricting the amount of short-term debt that CL&P,
WMECO, HWP, RRR and NU may incur, the revolving credit agreements to which CL&P,
WMECO, HWP, RRR and NU are parties provide that the lenders are not required to
make additional loans, and that the maturity of indebtedness can be accelerated,
if NU (on a consolidated basis) does not meet a common equity ratio test that
requires, in effect, that NU's consolidated common equity (as defined) be not
less than 30 percent for any three consecutive fiscal quarters.  At December 31,
1997, NU's common equity ratio was 33.4 percent.

     The indentures securing the outstanding first mortgage bonds of CL&P, PSNH,
WMECO and NAEC provide that additional bonds may not be issued, except for
certain refunding purposes, unless earnings (as defined in each indenture and
before income taxes, and, in the case of PSNH, without deducting the
amortization of PSNH's regulatory asset), are at least twice the pro forma
annual interest charges on outstanding bonds and certain prior lien obligations
and the bonds to be issued.  CL&P and WMECO's 1997 earnings do not permit them
to meet those earnings coverage tests, but as of February 28, 1998, CL&P and
WMECO would be able to issue up to $145 million and $4 million of additional
first mortgage bonds, respectively, on the basis of previously issued but
refunded bonds, without having to meet the earnings coverage test. These amounts
will decrease after CL&P and WMECO have issued additional first mortgage bonds
to secure borrowings under the NBFT discussed above under "1998 Financing
Plans." Because WMECO has limited available bonding capacity to secure its
obligations under the NBFT, WMECO will reduce its borrowing limit by
approximately $5 million under the Revolving Credit Agreement, which will result
in the release of an equivalent amount of collateral bonds that secure the
Revolving Credit Agreement.

     The preferred stock provisions of CL&P's, PSNH's and WMECO's charters also
prohibit the issuance of additional preferred stock (except for  refinancing
purposes) unless income before interest charges (as defined and after income
taxes and depreciation) is at least 1.5 times the pro forma annual interest
charges on indebtedness and the annual dividend requirements on preferred stock
that will be outstanding after the additional stock is  issued. CL&P and WMECO
are currently unable to issue additional preferred stock under these provisions.

     SEC rules under the 1935 Act require that dividends on NU's shares be based
on the amount of dividends received from subsidiaries, not on the undistributed
retained earnings of subsidiaries.  NU suspended the payment of dividends
beginning with the quarter ended June 30, 1997.

     The supplemental indentures under which CL&P's and WMECO's first  mortgage
bonds and the indenture under which PSNH's first mortgage bonds have been issued
limit the amount of cash dividends and other distributions these subsidiaries
can make to NU out of their retained earnings.  As of December 31, 1997, WMECO
had $28.7 million and PSNH had $170.1 million of unrestricted retained earnings.
As of the same date, CL&P had an accumulated deficit of approximately $154
million that must be made up before it is able to pay dividends to NU. The
indenture under which NAEC's Series A Bonds have been issued also limits the
amount of cash dividends or distributions NAEC can make to NU to retained
earnings plus $10 million.  At December 31, 1997, approximately $68.7 million
was available to be paid under this provision.

     PSNH's revolving credit agreement prohibits it from declaring or paying any
cash dividends or distributions on any of its capital stock, except for
dividends on the preferred stock, unless minimum interest coverage and common
equity ratio tests are satisfied.  PSNH's preferred stock provisions also limit
the amount of cash dividends and other distributions PSNH can make to NU if
after taking the dividend or other distribution into account, PSNH's common
stock equity is less than 25 percent of total capitalization.  At December 31,
1997, approximately $170.1 million was available to be paid under these
provisions.  If NAEC could not meet the common equity covenant referred to
above, it would also be unable to pay common dividends.  At December 31, 1997,
$68.7 million was available to be paid under this provision.

     Certain System financing agreements also have covenants or trigger events
tied to credit ratings of certain System companies.

     The downgrade by Moody's of WMECO's first mortgage bonds to Ba2 in December
1997 brought those ratings to a level at which the sponsor of WMECO's accounts
receivable program can take various actions, in its discretion, which would have
the practical effect of limiting WMECO's ability to utilize the facility. The
WMECO accounts receivable program could be terminated if WMECO's first mortgage
bond credit ratings experience one more level of downgrade. CL&P's accounts
receivables program could be terminated if its senior secured debt is downgraded
two more steps from its current ratings.

     As the result of the downgrades of CL&P's and WMECO's senior secured debt
to below investment grade in the Spring of 1997, NNECO is required under the
terms of its note agreement relating to $24.1 million of notes to make a series
of four equal annual prepayments to the noteholder that effectively result in
the notes being fully repaid by May 2000.  NNECO made its first prepayment in
May 1997.  At December 31, 1997, there were approximately $18 million of these
notes outstanding.

     RRR is the obligor under financing arrangements for office facilities at
the System's Berlin (Connecticut) headquarters.  Under those financing
arrangements, the holders of $38 million of notes requested the repurchase of
the notes in April 1997. Of the $38 million, RRR reacquired and retired $26
million of the notes and the remaining $12 million of the notes were sold to
alternate purchasers during the second and third quarters of 1997. Under the
repurchase agreements, the new noteholders are entitled to request repurchase of
the notes if the senior secured debt of a major subsidiary (as defined) is rated
below B1 by Moody's and B+ by S&P. The notes are secured by real estate leases
between RRR and NUSCO, which provide for the acceleration of rent equal to RRR's
note obligations if RRR is unable to pay, and NU has guaranteed the notes. Rent
was accelerated for the $26 million of repurchased notes.

     For information regarding the effect of downgrades on certain fossil-fuel
hedging agreements of CL&P, see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations."

                              ELECTRIC OPERATIONS

DISTRIBUTION AND LOAD

     The System companies traditionally have owned and operated a fully
integrated electric utility business. Restructuring legislation in
Massachusetts, however, requires WMECO to separate the distribution,
transmission and generation functions of its business. Similar initiatives have
been proposed in New Hampshire and Connecticut.

     The System companies' retail service territories cover approximately 11,335
square miles (4,400 in CL&P's service area, 5,445 in PSNH's service area and
1,490 in WMECO's service area) and have an estimated total population of
approximately 4.1 million (2.5 million in Connecticut, 1 million in New
Hampshire and 600,000 in Massachusetts). The companies furnish retail franchise
service in 149, 198 and 59 cities and towns in Connecticut, New Hampshire and
Massachusetts, respectively. In December 1997, CL&P furnished retail franchise
service to approximately 1.1 million customers in Connecticut, PSNH provided
retail service to approximately 400,000 customers in New Hampshire and WMECO
served approximately 195,000 retail franchise customers in Massachusetts.  HWP
serves 33 retail customers in Holyoke, Massachusetts.

     The following table shows the sources of 1997 electric revenues based on
categories of customers:

                           CL&P   PSNH**  WMECO   NAEC   Total System

Residential................ 41.8%    30.8%   37.6%   -           38.3%
Commercial................. 35.9     25.5    33.0    -           32.8
Industrial................. 12.7     15.6    19.4    -           14.2
Wholesale*.................  8.1     27.5     8.7  100.0%        13.5
Other......................  1.5       .6     1.3    -            1.2

Total......................100.0%   100.0%  100.0%   100.0%     100.0%

* Includes capacity sales and sales from PSNH to CL&P and WMECO.
** Excludes sales related to the retail pilot program in New Hampshire.

     NAEC's 1997 electric revenues were derived entirely from sales to PSNH
under the Seabrook power contracts.  See "Rates--New Hampshire Retail Rates---
Seabrook Power Contracts" for a discussion of the contracts.

     Through December 31, 1997, the all-time peak demand on the System was 6,456
MW, which occurred on July 15, 1997.  At the time of the peak, the System's
generating capacity, including capacity purchases, was 8,570 MW.


     System energy requirements were met in 1997 and 1996 as set forth below:

     Source                                       1997      1996

     Nuclear ....................................  13%        28%
     Oil ......................................    28         12
     Coal .......................................  13         11
     Hydroelectric ..............................   4          5
     Natural gas ...............................    7          3
     NUGs ....................................     14         13
     Purchased-power........................       21         28

                                                  100%       100%

     The actual changes in retail kWh sales for the last two years and the
forecasted sales growth estimates for the ten-year period 1997 through 2007, in
each case exclusive of wholesale sales, non-franchised retail sales and sales
related to the retail pilot program in New Hampshire, for the System, CL&P, PSNH
and WMECO are set forth below:

                    1997 over      1996 over      Forecast 1997-2007
                      1996            1995     Compound Rate of Growth

     System.......     (.3)%          1.6%              1.4%
     CL&P...........    .0 %          1.8%              1.2%
     PSNH...........   (.1)%           .4%              2.0%
     WMECO..........  (1.0)%          2.7%               .7%

      Retail sales fell by .3 percent in 1997 compared with 1996 primarily due
to mild weather.  The warmer than normal weather in the first quarter of 1997
had the greatest impact on residential electric sales, which were down by 1.1
percent. Commercial sales were up by .7 percent for the year and industrial
sales decreased by .3 percent.  Retail sales at CL&P were essentially flat in
1997, while WMECO retail sales decreased by 1 percent. PSNH's retail sales
decreased by .1 percent in 1997, partly due to a retail pilot program in New
Hampshire.

     The System also acts as both a buyer and a seller of electricity in the
highly competitive wholesale electricity market in the Northeastern United
States (Northeast). Although revenues from long-term contracts have been
declining, wholesale revenues of $319 million in 1997 were approximately the
same as 1996 as a result of new contracts entered into in recent years and are
expected to be remain constant in 1998. The System's most important wholesale
market at this time remains New England. The opportunity for any significant new
wholesale market opportunities remain limited due to continuing uncertainty
associated with electric industry restructuring.

     With the System's generating capacity of 7,861 MW as of January 1, 1998
(including the net of capacity sales to and purchases from other utilities, and
approximately 640 MW of capacity purchased from NUGs under existing contracts),
the System expects to have a sufficient amount of capacity to meet its projected
1998 peak load obligations.

     The System companies operate and dispatch their generation as provided in
the NEPOOL Agreement.  In 1997, the peak demand on the NEPOOL system was 20,569
MW in July, which was 1062 MW above the 1996 peak load of 19,507 MW in August of
that year.  NEPOOL has projected that there will be an increase in demand in
1998 and estimates that the summer 1998 peak load could reach 22,080 MW.

     While management expects Millstone 3 to be operating during the summer of
1998, even if Millstone 3 is not operational at any time during the 1998 summer
season, management expects that the System and NEPOOL will have sufficient
capacity to meet peak load demands for New England, so long as the remaining
generating units and transmission systems in Connecticut and the New England
region have normal operability. If high levels of unplanned outages in New
England were to occur, or if any of the System's transmission lines used to
import power from other states were unavailable, or any significant amount of
imported generating resources are not available at times of peak load demand, NU
and the other New England utilities may have to resort to operating procedures
designed to reduce load.  During 1997, the System spent approximately $58
million to ensure adequate capacity availability, of which $40 million was
expensed.  In 1998, the System companies do not anticipate needing to take
additional measures to ensure adequate generating capacity.  In addition to
these costs, CL&P and WMECO incurred, and will incur, additional costs in 1997
and 1998 as a result of the capacity deficiency under the NEPOOL Agreement,
which is discussed more fully below under "Regional and System Coordination."

REGIONAL AND SYSTEM COORDINATION

      The System companies and most other New England utilities are parties to
an agreement (NEPOOL Agreement), which provides for coordinated planning and
operation of the region's generation and transmission facilities. The NEPOOL
Agreement was restated and revised as of March 1, 1997 to provide for a pool-
wide open access transmission tariff and for the creation of an Independent
System Operator (ISO).  Under these new arrangements: (i) the ISO, a non-profit
corporation whose board of directors and staff is not controlled by or
affiliated with market participants, ensures the reliability of the NEPOOL
transmission system, administers the NEPOOL tariff and oversees the efficient
and competitive functioning of the regional power market; (ii) the NEPOOL tariff
provides for non-discriminatory open access to the regional transmission network
at one rate regardless of transmitting distance for all transactions; and (iii)
a broader governance structure for NEPOOL and a more open, competitive market
structure are established.

     On June 25, 1997, FERC issued an order that conditionally approved the
formation of the ISO to succeed NEPOOL as the operator of the bulk electric
power supply system in New England and the transfer of control over FERC-
jurisdictional facilities to the ISO by NEPOOL's public utility members.  On
September 18, 1997, NEPOOL filed an agreement effecting compliance with FERC's
ISO order.

     On October 31, 1997, NEPOOL filed the Fourth Supplement to the NEPOOL
Agreement with FERC.  The major intent of the filing was to address internal
NEPOOL congestion and the use of the external transmission tie lines between New
York and New Brunswick, and to provide a transition towards restructuring.  This
filing would allow NU to retain its current 72 percent use of the  New York tie
lines on a priority basis through April 1998. In May 1998, NU's priority use at
any given time would be reduced from approximately 1000 MW to approximately 600
MW. This priority of 600 MW is gradually reduced to zero by January 2000.  If NU
requires use of the New York ties above the level discussed above, it would be
available from the ISO on a first come, first serve basis at no additional cost
as long as the amount requested is actually utilized. Management does not expect
the change in its priority arrangements under the NEPOOL Agreement to limit the
System's ability to meet its capacity requirements.

     Pursuant to the NEPOOL Agreement, if a participant is unable to meet its
capacity responsibility obligations, the participant is required to purchase
capacity through the ISO at a market clearing price as set forth in the NEPOOL
Agreement. Management is currently meeting its capacity responsibility while the
Millstone units remain shut down through purchased power contracts with other
utilities.  The cost of these arrangements is approximately $16 million for
November 1997 to April 1998. If Millstone 3 and Millstone 2 return to service
within their currently estimated restart schedules, the cost of these
arrangements from May 1998 to October 1998 are estimated to be approximately
$7.5 million. If neither unit returns to service prior to October 1998, the
System's costs to meet their capacity responsibility obligations within such
period are estimated to be approximately $30 million.

     There are two agreements that determine the manner in which costs and
savings are allocated among the System companies.  Under an agreement (NUG&T)
among CL&P, WMECO and HWP (Initial System Companies), these companies pool their
electric production costs and the costs of their principal transmission
facilities.  Pursuant to the merger agreement between NU and PSNH, the Initial
System Companies and PSNH entered into a ten-year sharing agreement (Sharing
Agreement), expiring in June 2002, that provides, among other things, for the
allocation of the capability responsibility savings and energy expense savings
resulting from a single-system dispatch through NEPOOL.

     In WMECO's restructuring filing with the DTE on December 31, 1997, WMECO
indicated that it expects to withdraw from the NUG&T with FERC's approval in the
summer of 1998.  This withdrawal is necessary as a result of retail competition
in Massachusetts and the divestiture of WMECO's nonnuclear generating plants. It
is likely that as retail competition occurs in other states, further changes in
the NUG&T will be necessary.  The Sharing Agreement will remain in effect
pending restructuring changes in Connecticut and New Hampshire.

TRANSMISSION ACCESS AND FERC REGULATORY CHANGES

     In April 1996, FERC issued its final open access rule (Order 888) to
promote competition in the electric industry.  Order 888 requires, among other
things, all public utilities that own, control or operate facilities used for
transmitting electric energy in interstate commerce to file an open-access,
nondiscriminatory transmission tariff and to take transmission service for their
own new wholesale sales and purchases under the open access tariffs. Order 888
also supports full recovery of legitimate, prudent and verifiable wholesale
strandable costs, but indicates that FERC will not interfere with state
determinations of retail strandable costs.

     On May 2, 1997, the System companies, along with other parties, filed with
the U.S. Court of Appeals an appeal of Order 888, challenging FERC's abdication
of its responsibility to ensure uniform recovery of full strandable costs at the
wholesale and retail level, including FERC's refusal to endorse strandable costs
payments (e.g., exit fees) for customers physically bypassing their former
supplier, as well as FERC's imposition of an ordinary negligence standard of
liability on transmission providers.

      In a companion order to Order 888 (Order 889), FERC also required electric
utilities to develop and maintain a same-time information system that will give
existing and potential transmission users the same access to transmission
information that the electric utility enjoys, and required electric utilities to
separate transmission from generation marketing functions pursuant to standards
of conduct. The System companies are complying with the requirements of Order
889.

      In 1997, the System companies collected approximately $35 million in
incremental transmission revenues from other electric utility generators.

FOSSIL FUELS

     In 1997, 47.4 percent and 38.9 percent of the System's generation was oil
and coal-derived, respectively.  The System's residual oil-fired generation
stations used approximately 11 million barrels of oil in 1997.  The System
obtained the majority of its oil requirements in 1997 through contracts with
several large, independent oil companies.  Those contracts allow for some spot
purchases when market conditions warrant. Spot purchases represented
approximately 35 percent of the System's fuel oil purchases in 1997.   The
System currently does not anticipate any difficulties in obtaining necessary
fuel oil supplies on economic terms.

     The System has nine generating stations, aggregating approximately 2,800
MW, which can fully or partially burn residual oil, natural gas or coal, as
economics, environmental concerns or other factors dictate.  Natural gas for
CL&P's Devon, Middletown and Montville generating stations is being purchased
directly from producers and traders on an interruptible basis and transported
through the interstate pipeline system and the local gas distribution companies.
Gas for WMECO's and PSNH's stations is being purchased from the respective local
distribution companies.  The System expects that interruptible natural gas will
continue to be available for its dual-fuel electric generating units on economic
terms and will continue to economically supplement fuel oil requirements.

     The System companies obtain their coal through long-term supply contracts
and spot purchases.  The System companies currently have an adequate supply of
coal.  Because of changes in federal and state air quality requirements, the
System may be required to use lower sulfur coal in its plants in the future. See
"Other Regulatory and Environmental Matters--Environmental Regulation Air
Quality Requirements."

     WMECO is not a party to any fuel arrangements that will have a material
effect on its ability to auction its nonnuclear generating units. For more
information regarding WMECO's restructuring plan, see "Electric Utility
Restructuring--Massachusetts Restructuring."


     NUCLEAR GENERATION

     GENERAL

     Certain System companies have ownership interests in four nuclear units,
Millstone 1, 2 and 3 and Seabrook 1, and equity interests in four regional
nuclear companies (the Yankee Companies) that separately own CY, MY, Vermont
Yankee (VY) and Yankee Rowe. System companies operate the three Millstone units
and Seabrook 1. Yankee Rowe was permanently removed from service in 1992; CY was
permanently removed from service on December 4, 1996, and MY was permanently
removed from service on August 6, 1997.

     CL&P and WMECO own 100 percent of Millstone 1 and 2 as tenants in common.
Their respective ownership interests in each unit are 81 percent and 19 percent.

     CL&P, PSNH and WMECO have agreements with other New England utilities
covering their joint ownership as tenants in common of Millstone 3.  CL&P's
ownership interest in the unit is 52.93 percent, PSNH's ownership interest in
the unit is 2.85 percent and WMECO's interest is 12.24 percent.  NAEC and CL&P
have 35.98 percent and 4.06 percent ownership interests, respectively, in
Seabrook.

     In 1996, one of the joint owners of Millstone 3, Vermont Electric
Generation and Transmission Cooperative, Inc. (VEG&T), filed for bankruptcy.
The subsequent liquidation resulted in the offering of VEG&T's .035 percent
share of Millstone 3 for sale to the joint owners of Millstone 3.  None of the
non-NU joint owners accepted the offer. CL&P expects to make the necessary
regulatory filings to acquire ownership of the VEG&T share in 1998.

     The Millstone 3 and Seabrook joint ownership agreements provide for pro-
rata sharing by the owners of each unit of the construction and operating costs,
the electrical output and the associated transmission costs. CL&P and WMECO,
through NNECO as agent, operate Millstone 3 at cost, and without profit, under a
sharing agreement that obligates them to utilize good utility operating practice
and requires the joint owners to share the risk of employee negligence and other
risks pro rata in accordance with their ownership shares.  The sharing agreement
provides that CL&P and WMECO would only be liable for damages to the non-NU
owners for a deliberate breach of the agreement pursuant to authorized corporate
action.

     For information regarding lawsuits filed against NU by the non-NU owners of
Millstone 3 regarding the sharing agreement and certain arbitration proceedings
related to the ongoing Millstone outages, see "Item 3 - Legal Proceedings."

     CL&P, PSNH, WMECO and other New England electric utilities are the
stockholders of the Yankee companies.  Each Yankee company owns a single nuclear
generating unit.  The stockholder-sponsors of each Yankee company are
responsible for proportional shares of the operating and decommissioning costs
of the respective Yankee company and are entitled to proportional shares of the
electrical output in the case of Vermont Yankee (VY), which is the only
operating unit of the four Yankee companies set forth below. The relative rights
and obligations with respect to the Yankee companies are approximately
proportional to the stockholders' percentage stock holdings, but vary slightly
to reflect arrangements under which nonstockholder electric utilities have
contractual rights to some of the output of particular units. The Yankee
companies and CL&P's, PSNH's and WMECO's stock ownership percentages in the
Yankee companies are set forth below:

                                   CL&P       PSNH     WMECO    System
Connecticut Yankee Atomic
 Power Company (CYAPC) ......     34.5%       5.0%      9.5%     49.0%
Maine Yankee Atomic Power
 Company (MYAPC) ............     12.0%       5.0%      3.0%     20.0%
Vermont Yankee Nuclear
 Power Corporation (VYNPC)...      9.5%       4.0%      2.5%     16.0%
Yankee Atomic Electric
 Company (YAEC)  ............     24.5%       7.0%      7.0%     38.5%

     CL&P, PSNH and WMECO are obligated to provide their percentages of any
additional equity capital necessary for VY, but do not expect to need to
contribute additional equity capital in the future.  CL&P, PSNH and WMECO
believe that VY could require additional external financing in the next several
years to finance construction expenditures, nuclear fuel and for other purposes.
Although the way in which VYAPC would attempt to finance these expenditures, if
they are needed, has not been determined, CL&P, PSNH and WMECO could be asked to
provide further direct or indirect financial support.  CYPAC, YAEC and MYAPC
could also request their sponsors to provide future financial support necessary
in connection with the decommissioning of their respective units, the level of
which support cannot be estimated at this time, but could be material.

     The operators of Millstone 1, 2 and 3, VY and Seabrook 1 hold full term
operating licenses from the NRC and are subject to the jurisdiction of the NRC.
The NRC has broad jurisdiction over the design, construction and operation of
nuclear generating stations, including matters of public health and safety,
financial qualifications, antitrust considerations and environmental impact.
The NRC issues 40-year initial operating licenses to nuclear units and NRC
regulations permit renewal of licenses for an additional 20-year period.  The
NRC also has jurisdiction over the decommissioning activities at Yankee Atomic,
CY and MY.

     The NRC also regularly conducts generic reviews of technical and other
issues, a number of which may affect the nuclear plants in which System
companies have interests.  The cost of complying with any new requirements that
may result from these reviews cannot be estimated at this time, but such costs
could be substantial.  For more information regarding recent actions taken by
the NRC with respect to the System's nuclear units, see "Electric Operations---
Nuclear Generation--Nuclear Plant Performance and Regulatory Oversight."

NUCLEAR PLANT PERFORMANCE AND REGULATORY OVERSIGHT

     MILLSTONE UNITS

     Millstone 1, 2 and 3 are located in Waterford, Connecticut, and have
license expirations of October 6, 2010, July 31, 2015 and November 25, 2025,
respectively, and are currently out of service.  These units are presently on
the NRC's watch list as Category 3 plants.  Plants in this category are required
to receive formal NRC commissioners' approval to resume operations.

     Millstone 1 began a planned refueling and maintenance outage on November 4,
1995.  Millstone 2 was shut down on February 21, 1996 as a result of an
engineering evaluation that determined that some valves could be inoperable in
certain emergency scenarios.  On March 30, 1996, Millstone 3 was shut down by
NNECO following an engineering evaluation which determined that four safety-
related valves would not be able to perform their design function during certain
postulated events.

     Each of these outages has been extended in order to respond to various NRC
requests to describe actions taken, including the resolution of specific
technical issues and to ensure that future operation of the units will be
conducted in accordance with the terms and conditions of their operating
licenses, NRC regulations and their Updated Final Safety Analysis Reports.  The
System also must demonstrate that it maintains an effective corrective action
program for Millstone, as required by NRC regulations, to identify and resolve
conditions that are adverse to safety or quality.

     On January 8, 1998, management declared Millstone 3 physically ready for
restart, which means that almost all of the restart-required physical work had
been completed in the plant. The NRC is currently conducting a series of
inspections to determine, among other things, whether the plant has effective
leadership and corrective action and employee concerns programs. The Independent
Corrective Action Verification Program (ICAVP) (discussed more fully below) must
also be completed prior to restart. Management cannot predict when the NRC will
allow any of the units to restart, but hopes to return Millstone 3 to service
early in the Spring of 1998 and Millstone 2 three to four months after Millstone
3. Millstone 1 is in an extended maintenance status and various options
regarding the future of the unit are being considered. Management estimates that
it will take approximately six weeks for a unit to reach full power after NRC
approval to restart.

      On August 14, 1996, the NRC issued a confirmatory order establishing the
requirement for NNECO to conduct the ICAVP prior to the restart of each of the
Millstone units.  The confirmatory order requires that an independent, third
party team, whose appointment is subject to NRC approval, verify the results of
the corrective actions taken to resolve identified design and configuration
management issues. ICAVP contractors have been selected for all three units and
approved by the NRC. The ICAVP contractor for Millstone 3 is expected to issue a
final report in March 1998. The ICAVP contractor for Millstone 2 is estimating
that their final report will be available in July. By letter dated January 30,
1998, the NRC described additional criteria that it would use to evaluate the
ICAVP and to determine whether the scope of the ICAVP needs to be expanded.

      On December 10, 1997, the NRC issued NNECO a notice of violation and
proposed imposition of civil penalties in the amount of $2.1 million for past
violations of NRC requirements at Millstone. Many of these violations were the
subject of an enforcement conference in December 1996.  The violations date back
over a number of years, with the majority occurring before the end of 1996.
NNECO has paid the fine. An NRC enforcement conference took place on January 13,
1998 to discuss findings arising from an NRC inspection (safety system
functional inspection) conducted in the fall of 1997.  The results of this
conference are not expected to have a material impact on the System.

     In addition to the various technical and design basis issues at Millstone,
the NRC continues to focus on the System's response to employee concerns at the
units.  On October 24, 1996, the NRC issued an order that requires NNECO to
develop and implement a comprehensive plan for handling safety concerns raised
by Millstone employees and for assuring an environment free from retaliation and
discrimination.  The NRC also ordered NNECO to contract for an independent third
party to oversee the implementation of the  comprehensive plan. The members of
the independent third-party organization must not have had any direct previous
involvement with activities at Millstone and must be approved by the NRC.
Oversight by the third-party group will continue until NNECO demonstrates, by
performance, that the conditions leading to this order have been corrected. This
oversight role will continue after the units have been restarted.  NNECO
submitted to the NRC its comprehensive employee concerns plan (ECP) and its
selection of the third-party oversight organization, which was subsequently
approved by the NRC during 1997. The third party organization developed and
submitted an oversight plan to the NRC. The third party organization provides a
public report on its findings at least quarterly, consistent with the provisions
of the order and has reported that while NNECO has shown improvement in this
area, there still needs to be more progress.  The NRC has indicated similar
findings at the conclusion of a two week onsite review of NNECO's ECP and safety
conscious work environment.

     On March 7, 1997, the NRC issued a letter to NNECO confirming NNECO's
commitment to evaluate and correct problems identified within its licensed
operator training programs at Millstone and CY. On June 27, 1997, NNECO
temporarily suspended all nuclear training programs at Millstone to address
programmatic deficiencies identified by NNECO and NRC inspectors during reviews
of the System's licensed operator training programs at Millstone and CY.  On
October 31, 1997, NNECO indicated in writing to the NRC that its commitments
under this letter were complete.

     For information regarding criminal investigations by the NRC's Office of
Investigations (OI) and the Office of the U. S. Attorney for the District of
Connecticut related to various matters at Millstone and CY, certain citizens'
petitions related to NU's nuclear operations and potential joint owner
litigation related to the extended outages, see "Item 3. Legal Proceedings."

     SEABROOK

     Seabrook 1, a 1148-MW pressurized-water reactor, has a license expiration
date of October 17, 2026.  The Seabrook operating license expires 40 years from
the date of issuance of authorization to load fuel, which was about three and
one-half years before Seabrook's full-power operating license was issued.  The
System will determine at the appropriate time whether to seek recapture of some
or all of this period from the NRC and thus add up to an additional three and
one-half years to the operating term for Seabrook.  On June 28, 1997, Seabrook
completed a 50-day planned refueling and maintenance outage. In 1997, Seabrook
operated at a capacity factor of 78.3 percent. On December 5, 1997, Seabrook was
shut down to repair leaks in a three inch stainless steel pipe in the residual
heat removal system. The pipe was replaced, but problems were subsequently
discovered in the control building air conditioning system.  Design changes were
implemented and the plant returned to service on January 16, 1998.



     YANKEE UNITS

          CONNECTICUT YANKEE

     CY, a 582-MW pressurized-water reactor, had a full term operating license,
which would have expired on June 29, 2007. On December 4, 1996, the Board of
Directors of CYAPC voted unanimously to retire CY.  The decision to shut down CY
was based on economic analyses that showed that shutting down the unit
prematurely and incurring replacement power costs could produce potential
savings to its purchasers compared to the costs of operating it over the
remaining period of the unit's operating license.

     CYAPC has undertaken a number of regulatory filings intended to implement
the decommissioning. Based upon FERC regulatory precedent, CYAPC believes it
will be allowed to continue to collect from its power purchasers, including
CL&P, WMECO and PSNH, CYAPC's decommissioning costs, the owners' unrecovered
investments in CYAPC, and other costs associated with the permanent closure of
the plant over the remaining period of its NRC operating license. Management in
turn expects that CL&P, WMECO and PSNH will continue to be allowed to recover
such FERC-approved costs from their customers.

     The current estimate of the sum of remaining future payments for the
closing, decommissioning and recovery of the remaining investment in CY is
approximately $619.9 million.  The System's share of these remaining estimated
costs is approximately $303.7 million.  For more information regarding CYAPC's
revised decommissioning estimate that was submitted to FERC in December 1996 and
the proceedings related thereto, see "Decommissioning" below.

     As confirmed by the NRC in a letter dated March 4, 1997, CYAPC has agreed
to take various steps to resolve deficiencies and weaknesses in the radiation
protection program at CY.  The NRC is continuing to monitor this issue at CY. It
is expected that dismantlement at the unit will not begin until CYAPC has met
its obligations under this letter.


     MAINE YANKEE

     MY, a 870-MW pressurized-water reactor, had an operating license, which
would have expired on October 21, 2008.  On August 6, 1997, the board of
directors of MYAPC voted unanimously to retire MY. On January 14, FERC released
an order on the MYAPC application to amend its power contracts with the
owner/purchasers in order to revise its decommissioning and other charges.  FERC
has accepted the proposed application for filing, and made the amendments and
the proposed charges under the contracts effective on January 15, 1998 subject
to refund after hearings.  At December 31, 1997, the estimated remaining
obligation, including decommissioning, amounted to approximately $867.2 million,
of which the NU system's share was approximately $173.4 million.  Under the
terms of the contracts with MYAPC, the shareholders-sponsor companies, including
CL&P, PSNH and WMECO, are responsible for their proportionate share of the costs
of the unit, including decommissioning.  Based on FERC precedent, management
expects that CL&P, PSNH and WMECO will be allowed to recover these costs from
their customers.  For more information regarding MYAPC's revised decommissioning
estimate and the FERC proceedings related thereto, see "Decommissioning" below.

     VERMONT YANKEE

     VY, a 514-MW boiling water reactor, has a license expiration date of March
21, 2012.  In 1997, VY operated at a capacity factor of 91.7 percent. VY is
scheduled to begin a 56-day planned refueling and maintenance outage on
September 28, 1998.

     YANKEE ROWE

     In 1992, YAEC's owners voted to shut down Yankee Rowe permanently based on
an economic evaluation of the cost of a proposed safety review, the reduced
demand for electricity in New England, the price of alternative energy sources
and uncertainty about certain regulatory requirements.  The power contracts
between CL&P, PSNH, WMECO and other owners, and YAEC, permit YAEC to recover
from each its proportional share of the Yankee Rowe shutdown and decommissioning
costs.  For more information regarding the decommissioning of Yankee Rowe, see
"Decommissioning" below.

     NUCLEAR INSURANCE

     Nuclear plant licensees are required to maintain a minimum of $1.06 billion
in nuclear property and decontamination insurance coverage.  The NRC requires
that proceeds from the policy following an accident that exceed $100 million
will first be applied to pay stabilization and decontamination expenses.  The
insurance carried by the licensees of the Millstone units, Seabrook 1, CY, MY
and VY meets the NRC's requirements. YAEC has obtained an exemption for Yankee
Rowe from the $1.06 billion requirement and currently carries $25 million of
insurance that otherwise meets the requirements of the rule. CYAPC has applied
for a similar exemption, and MYAPC is expected to do the same. For more
information regarding nuclear insurance, see "Commitments and Contingencies---
Nuclear Insurance Contingencies" in the notes to NU's, CL&P's, PSNH's, WMECO's
and NAEC's financial statements.

     NUCLEAR FUEL

     The supply of nuclear fuel for the System's existing units requires the
procurement of uranium concentrates, followed by the conversion, enrichment and
fabrication of the uranium into fuel assemblies suitable for use in the System's
units.  Fuel may also be purchased at a point after any of the above processes
are completed. The majority of the System companies' uranium enrichment services
requirements is provided under a long-term contract with the United States
Enrichment Corporation (USEC), a wholly owned United States government
corporation.  The majority of Seabrook's uranium enrichment services
requirements is furnished through a Russian trading company (Global Nuclear
Services and Supply).  The System expects that uranium concentrates and related
services for the units operated by the System and for the other units in which
the System companies are participating, that are not covered by existing
contracts, will be available for the foreseeable future on reasonable terms and
prices.

     In August 1995, NAESCO filed a complaint in the United States Court of
Federal Claims challenging the propriety of the prices charged by the USEC for
uranium enrichment services procured for Seabrook Station in 1993.  The
complaint is an appeal of the final decision rendered by the USEC contracting
officer denying NAESCO's claims, which range from $2.5 million to $5.8 million.
On December 17, 1997, the court granted the government's motion to dismiss
NAESCO's claims.

     As a result of the Energy Policy Act, the United States commercial nuclear
power industry is required to pay the United States Department of Energy (DOE),
through a special assessment, for the costs of the decontamination and
decommissioning of uranium enrichment plants owned by the United States
government, no more than $150 million per annum for 15 years beginning in 1993.
Each domestic nuclear utility's payment is based on its pro rata share of all
enrichment services received by the United States commercial nuclear power
industry from the United States government through October 1992.  Each year, the
DOE adjusts the annual assessment using the Consumer Price Index.  The Energy
Policy Act provides that the assessments are to be treated as reasonable and
necessary current costs of fuel, which costs shall be fully recoverable in rates
in all jurisdictions. The System's remaining share to be recovered, assuming no
escalation, is approximately $63.7 million as of December 31, 1997. Management
believes that the DOE assessments against CL&P, WMECO, PSNH and NAEC will be
recoverable in future rates.  Accordingly, each of these companies has
recognized these costs as a regulatory asset, with a corresponding obligation on
its balance sheet.

     In June 1995, the United States Court of Federal Claims held that, as
applied to YAEC, the Uranium Enrichment Decontamination and Decommissioning Fund
is an unlawful add-on to the bargained-for contract price for enriched uranium.
As a result, the federal government must refund the approximately $3.0 million
that YAEC has paid into the fund since its inception.  On May 6, 1997, the
United States Court of Appeals for the Federal Circuit issued a 2-1 panel
decision reversing the Court of Federal Claims' decision.  YAEC filed a motion
for rehearing with the Appeals Court, which was denied, and subsequently filed a
petition with the U.S. Supreme Court to consider its appeal. NU is evaluating
the applicability of this decision to the $25.2 million that the System
companies have already paid into the fund and whether this alters the System
companies' obligation to pay such special assessments in the future.

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

     HIGH-LEVEL RADIOACTIVE WASTE

     The Nuclear Waste Policy Act of 1982 (NWPA) provides that the federal
government is responsible for the permanent disposal of spent nuclear reactor
fuel (SNF) and high-level waste.  As required by the NWPA, electric utilities
generating SNF and high-level waste are obligated to pay fees into a fund which
would be used to cover the cost of siting, constructing, developing and
operating a permanent disposal facility for this waste.  The System companies
have been paying for such services for fuel burned on or after April 7, 1983 on
a quarterly basis since July 1983.  The DPUC, NHPUC and DTE permit the fee to be
recovered through rates.  For nuclear fuel used to generate electricity prior to
April 7, 1983 (prior-period fuel), payment must be made prior to the first
delivery of spent fuel to the DOE. The DOE's current estimate for an available
site is 2010. For more information regarding payments related to the prior-
period fuel, see "Spent Nuclear Fuel Disposal Costs" in the notes to NU's,
CL&P's, PSNH's, WMECO's and NAEC's financial statements.

     In return for payment of the fees prescribed by the NWPA, the federal
government is to take title to and dispose of the utilities' high-level wastes
and SNF. On March 3, 1997, CYAPC, NAESCO and NUSCO intervened as parties in a
lawsuit brought by 35 nuclear utilities in the U.S. Court of Appeals for the
District of Columbia Circuit on January 31, 1997, seeking additional action
based on the DOE's assertion that it expects to be unable to begin acceptance of
SNF for disposal by January 31, 1998 as specified under the NWPA.  On May 8,
1997, pursuant to a court order, the petitioners and intervenors requested that
the court compel DOE to begin accepting spent fuel on or before January 31, 1998
or to implement various other remedies.  On November 14, 1997, the court issued
its decision on the petitions.  The court declined to order DOE to begin
disposing of SNF by the statutory deadline of January 31, 1998, finding that the
standard contract with DOE and each utility provides a potentially adequate
remedy if DOE fails to fulfill its obligations by that date.  However, the
court's ruling also forecloses DOE from arguing that the delay in the high-level
waste program was "unavoidable" in any future breach of contract actions brought
by utilities against DOE.

     On December 29, 1997, DOE petitioned the court to reconsider its decision,
arguing that the U. S. Court of Appeals lacks jurisdiction over an issue which
only concerns contractual matters.  Subsequent to DOE's failure to begin
accepting spent fuel for disposal on January 31, 1998, a number of states,
public utility commissions and utilities took additional legal action against
DOE. On February 24, 1998, NUSCO, NAESCO and CYAPC joined the lawsuit that had
been filed by the other utilities.

     On February 18, 1998, YAEC filed a complaint against DOE in the United
States Court of Federal Claims seeking damages in excess of $70 million
resulting from DOE's failure to accept spent nuclear fuel for disposal.  CYAPC
filed a similar complaint in the United States Court of Federal Claims on March
4, 1998, seeking damages of over $90 million.

     Until the federal government begins accepting nuclear waste for disposal,
nuclear generating plants will need to retain high-level waste and spent fuel
onsite or make some other provisions for their storage. With the addition of new
storage racks, storage facilities for Millstone 3 are expected to be adequate
for the projected life of the unit. With the implementation of currently planned
modifications, the storage facilities for Millstone 1 and 2 are expected to be
adequate (maintaining the capacity to accommodate a full-core discharge from the
reactor) until 2004.  Fuel consolidation, which has been licensed for Millstone
2, could provide adequate storage capability for the projected lives of
Millstone 1 and 2. With the current installation of new racks in its existing
spent fuel pool, Seabrook is expected to have spent fuel storage capacity until
at least 2010.

     The storage capacity of the spent fuel pool at VY is expected to be reached
in 2004 and the available capacity of the pool is expected to be able to
accommodate full-core removal until 2001.    Adequate storage capacity exists to
accommodate all of the SNF at CY, MY and Yankee Rowe until that fuel is removed
by the DOE.

     LOW-LEVEL RADIOACTIVE WASTE

     The System currently has contracts to dispose its low-level radioactive
waste (LLRW) at two privately operated facilities in Clive, Utah, and in
Barnwell, South Carolina. Because access to LLRW disposal may be lost at any
time, the System has plans that will allow for onsite storage of LLRW for at
least five years.

     DECOMMISSIONING

     Based upon the System's most recent comprehensive site-specific updates of
the decommissioning costs for each of the three Millstone units and for
Seabrook, the recommended decommissioning method continues to be immediate and
complete dismantlement of those units at their retirement.  The table below sets
forth the estimated Millstone and Seabrook decommissioning costs for the System
companies.  The estimates are based on the latest site studies, stated in
December 31, 1997 dollars.

                         CL&P      PSNH      WMECO      NAEC     System
                                           (Millions)
     Millstone 1      $ 390.9     $  -       $ 91.7    $  -      $482.6
     Millstone 2        350.2        -         82.1       -       432.3
     Millstone 3        294.0       15.6       67.8       -       377.4
     Seabrook            19.2        -          -       170.2     189.4

      Total           $1054.3     $ 15.6     $240.8    $170.2   $1481.7

     As of December 31, 1997, the System recorded balances (at market) in its
external decommissioning trust funds as follows:

                         CL&P      PSNH      WMECO      NAEC    System
                                           (Millions)
     Millstone 1       $173.1      $ -      $ 48.2     $ -      $221.3
     Millstone 2        115.4        -        33.5       -       148.9
     Millstone 3         77.8        4.3      21.0       -       103.1
     Seabrook             2.9        -         -        26.5      29.7

      Total            $369.2      $ 4.3    $102.7     $26.5    $502.7

     In 1986, the DPUC approved the establishment of separate external trusts
for the currently tax-deductible portions of decommissioning expense accruals
for Millstone 1 and 2 and for all expense accruals for Millstone 3.  The DPUC
has authorized CL&P to collect its current decommissioning estimate for the
three Millstone units from customers.  This estimate includes an approximate 19
percent contingency factor for the decommissioning cost of each unit.

     WMECO has established independent trusts to hold all decommissioning
expense collections from customers.  The DPU has authorized WMECO to collect its
current decommissioning estimate for the three Millstone units.

     New Hampshire enacted a law in 1981 requiring the creation of a state-
managed fund to finance decommissioning of any units in that state.  NAEC's
costs for decommissioning are billed by it to PSNH and recovered by PSNH under
the Rate Agreement.  Under the Rate Agreement, PSNH is entitled to a base rate
increase to recover increased decommissioning costs. In its recent restructuring
orders, the NHPUC determined that PSNH would be allowed to recover
decommissioning costs through strandable cost charges.  See "Rates--New
Hampshire Retail Rates" for further information on the Rate Agreement and
restructuring.

     The decommissioning cost estimates for the System nuclear units are
reviewed and updated regularly to reflect inflation and changes in
decommissioning requirements and technology.  Changes in requirements or
technology, or adoption of a decommissioning method other than immediate
dismantlement, could change these estimates.  CL&P, PSNH and WMECO attempt to
recover sufficient amounts through their allowed rates to cover their expected
decommissioning costs.  Only the portion of currently estimated total
decommissioning costs that has been accepted by regulatory agencies is reflected
in rates of the System companies.  Based on present estimates, and assuming its
nuclear units operate to the end of their respective license periods, the System
expects that the decommissioning trust funds will be substantially funded when
those expenditures have to be made.

     However, under Connecticut law, an electric company is prohibited from
collecting in rates any decommissioning costs after the date of closing the
facility unless the DPUC determines (i) that the utility has complied with the
decommissioning financing plan under which such costs are incurred and (ii) that
there are compelling reasons for including such costs in rates. A committee of
the General Assembly may review any such determination not later than thirty
days before such rates take effect. For more information regarding this matter,
see "Rates--Connecticut Retail Rates."

     CYAPC, YAEC, VYNPC and MYAPC are all collecting revenues for
decommissioning from their power purchasers.  The table below sets forth the
System companies' estimated share of decommissioning costs (and closure costs
where applicable) of the Yankee units. The estimates are based on the latest
site studies.  For information on the equity ownership of the System companies
in each of the Yankee units, see "Electric Operations---uclear Generation---
General."

                        CL&P       PSNH      WMECO     System
                                        (Millions)
     VY                $ 48.0      $20.2     $12.6     $ 80.8
     Yankee Rowe*        30.5        8.7       8.7       47.9
     CY*                213.8       31.0      58.7      303.7
     MY*                104.1       43.3      26.0      173.4

      Total            $396.4     $103.2    $106.0     $605.8



     *    As discussed more fully below, the costs shown include all of the
expected future billings associated with the funding of decommissioning,
recovery of remaining assets and other closure costs associated with the early
retirement of Yankee Rowe, CY and MY as of December 31, 1997, which have been
recorded as an obligation on the books of the System companies.

     As of December 31, 1997, the System's share of the external decommissioning
trust fund balances (at market), which have been recorded on the books of the
Yankee Companies, is as follows:

                        CL&P         PSNH      WMECO    System
                                        (Millions)
     VY                $ 18.4      $ 7.7     $ 4.8     $ 30.9
     Yankee Rowe         32.7        9.4       9.4       51.5
     CY                  89.8       13.0      24.8      127.6
     MY                  23.9       10.0       6.0       39.9

      Total            $164.8      $40.1     $45.0     $249.9


     Effective January 1996, YAEC began billing its sponsors, including CL&P,
WMECO and PSNH, amounts based on a revised estimate approved by FERC that
assumes decommissioning by the year 2000.  This revised estimate was based on
continued access to the Barnwell, South Carolina, low-level radioactive waste
facility, changes in assumptions about earnings on decommissioning trust
investments and changes in other decommissioning cost assumptions.

      CYAPC accrues decommissioning costs on the basis of immediate
dismantlement at retirement.  In late December 1996, CYAPC made a filing with
FERC to amend the wholesale power contracts between the owners of the facility
and revise decommissioning cost estimates and other cost estimates for the
facility.  The amendments clarify the owners' entitlement to full recovery of
sunk costs and the ongoing costs of maintaining the plant in accordance with NRC
rules until decommissioning begins and ensures that decommissioning will
continue to be funded through June 2007, the full license term, despite the
unit's earlier shutdown. On February 26, 1997, FERC issued an order accepting
the power contract amendments and making them effective March 1, 1997, subject
to refund after hearing on the prudence of the decision to retire the plant and
the reasonableness of the CY proposal.  A number of parties have intervened in
this proceeding.  In total, the intervenors seek to disallow in excess of $200
million of the amount that CYAPC may collect from its power purchasers for
decommissioning. In addition, the intervenors and FERC staff have proposed
reductions in CY's currently allowed 11.5 percent return on equity, and certain
intervenors have requested that CYAPC not be permitted to recover approximately
$245 million of its unamortized investment in CY.  The decision in this
proceeding is expected in the Spring of 1998.

     MYAPC also accrues decommissioning costs on the basis of immediate
dismantlement at retirement. On January 14, 1998, FERC released a draft order on
the MYAPC application to amend its power contracts with the owners/purchasers
and revise its decommissioning and other charges.  FERC has accepted the
proposed application for filing and made the amendments and the proposed charges
under the contracts effective on January 15, 1998, subject to refund after
hearings.  FERC will determine the prudence of MYAPC's decision to retire the
plant before it finally determines the justness and reasonableness of MY's
proposed amended power contract rates. For information regarding a dispute
between the sponsors of MY and a number of municipalities and cooperatives which
had purchase agreements with MYAPC, see "Item 3 - Legal Proceedings."

     For more information regarding nuclear decommissioning, see "Nuclear
Decommissioning" in the notes to NU's, CL&P's, PSNH's, WMECO's and NAEC's
financial statements.

                               RESOURCE PLANS
     CONSTRUCTION

     The System's construction program in the period 1998 through 2002 is
estimated as follows:

                     1998      1999      2000      2001     2002
                                     (Millions)

CL&P                $165      $283      $278      $310      $296
PSNH                  42        61        69        63        68
WMECO                 27        49        38        37        35
NAEC                   9        10         9         3         5
OTHER                 24        22        22        27        26

TOTAL               $267      $425      $416      $440      $430

     The construction program data shown above includes all anticipated capital
costs necessary for committed projects and for those reasonably expected to
become committed, regardless of whether the need for the project arises from
environmental compliance, nuclear safety, reliability requirements or other
causes.  The construction program's main focus is maintaining and upgrading the
existing transmission and distribution system and nuclear and fossil-generating
facilities. The increase in construction expenditures after 1999 are primarily
related to projected capital improvements for the distribution system.  System
companies' construction needs, however, may change substantially in light of its
commitment to sell its nonnuclear generating units in Massachusetts and New
Hampshire. It is conceivable that the System will no longer construct any new
generating facilities, but instead contract with third parties for capacity in a
competitive generation market.

     FUTURE NEEDS

     Restructuring of the electric industry will have a dramatic effect on the
System's long-range planning.  While electric utility companies traditionally
have been required to meet their franchise customers' long-term electric needs,
a company's long-term planning after restructuring will depend on the nature of
its particular business.  Where the electric company remains in the generation
business, such companies will rely on more market-based planning to meet its
supply obligations.


                      ENERGY-RELATED BUSINESSES

     ENERGY PRODUCTS AND SERVICES

     NU organized NUSCO Energy Partners, Inc. (NEP) in 1996 to engage in the
energy services business and in response to the NHPUC's requirement that PSNH's
participation in the New Hampshire retail electric competition pilot program
take place through an affiliate company.  NEP acquired PSNH's retail sales
interest in the New Hampshire pilot program in  1996. During 1997, NEP changed
its name to Select Energy, Inc. Select Energy is a vehicle for participating in
retail pilot programs and open-access retail electric markets in the Northeast
and other appropriate areas of the country.  In addition, Select Energy develops
and markets energy-related products and services in order to enhance its core
electric service and customer relationships. These include energy services,
productivity services, business and financial services, and residential
services. Select Energy continues to take steps to establish strategic alliances
with other companies in various energy-related fields including fuel supply and
management, power quality, energy efficiency and load management services.
    
     PRIVATE POWER DEVELOPMENT

     The System has participated as a developer and investor in domestic and
international private power projects through its subsidiary, Charter Oak.
Charter Oak has invested primarily in projects outside of the United States. In
March 1997, the NU Board of Trustees approved the offering for sale of Charter
Oak and its assets. Since March, three of the five operating projects in which
Charter Oak had invested were sold for an aggregate purchase price of $21
million. Charter Oak incurred a loss of approximately $3 million on the three
projects which it has sold. The other two projects are being actively marketed;
however, NU has recorded a reserve of approximately $25 million against future
losses attributed to the sale of these projects. NU had $33.4 million invested
in the remaining Charter Oak projects as of December 31, 1997.


     ENERGY MANAGEMENT SERVICES

     In 1990, NU organized a subsidiary corporation, HEC, to acquire
substantially all of the assets and personnel of a nonaffiliated energy
management services company.  In general, HEC contracts to reduce its customers'
energy costs and/or conserve energy and other resources.  HEC also provides DSM
consulting services to utilities and others.  HEC's energy management and
consulting services have primarily been directed to the commercial, industrial
and institutional markets and utilities in New England and New York. NU's
aggregate equity investment in HEC was approximately $4 million as of December
31, 1997.

            OTHER REGULATORY AND ENVIRONMENTAL MATTERS

ENVIRONMENTAL REGULATION

     GENERAL

     The System and its subsidiaries are subject to federal, state and local
regulations with respect to water quality, air quality, toxic substances,
hazardous waste and other environmental matters.  Similarly, the System's major
generation and transmission facilities may not be constructed or significantly
modified without a review by the applicable state agency of the environmental
impact of the proposed construction or modification.  Compliance with
environmental laws and regulations, particularly air and water pollution control
requirements, may limit operations or require substantial investments in new
equipment at existing facilities.  See "Resource Plans" for a discussion of the
System's construction plans. In order to enhance the System's oversight of
environmental matters, management introduced a comprehensive energy management
system in 1997, which is estimated to cost the System approximately $2 million
dollars to implement through 1998.

    SURFACE WATER QUALITY REQUIREMENTS

      The federal Clean Water Act (CWA) requires every "point source" discharger
of pollutants into navigable waters to obtain a National Pollutant Discharge
Elimination System (NPDES) permit from the United States Environmental
Protection Agency (EPA) or state environmental agency specifying the allowable
quantity and characteristics of its effluent.  System facilities have all
required NPDES permits in effect. Compliance with NPDES and state water
discharge permits has necessitated substantial expenditures, which are difficult
to estimate, and may require further expenditures because of additional
requirements that could be imposed in the future.  For information regarding
ongoing criminal investigations by the Office of the U. S. Attorney for the
District of Connecticut related to allegations that there were violations of
certain facilities' NPDES permits and a related civil lawsuit and investigations
related to the Long Island cable, see "Item 3. Legal Proceedings."

      The Federal Oil Pollution Act of 1990 (OPA 90) sets out the requirements
for facility response plans and periodic inspections of spill response equipment
at facilities that can cause substantial harm to the environment by discharging
oil or hazardous substances into the navigable waters of the United States and
onto adjoining shorelines.  The System companies are currently in compliance
with the requirements of OPA 90.  OPA 90 includes limits on the liability that
may be imposed on persons deemed responsible for release of oil.  The limits do
not apply to oil spills caused by negligence or violation of laws or
regulations. OPA 90 also does not preempt state laws regarding liability for oil
spills.  In general, the laws of the states in which the System owns facilities
and through which the System transports oil could be interpreted to impose
strict liability for the cost of remediating releases of oil and for damages
caused by releases.  The System currently carries general liability insurance in
the total amount of $100 million per occurrence for oil spills.

          AIR QUALITY REQUIREMENTS

     The Clean Air Act Amendments of 1990 (CAAA) impose stringent requirements
on emissions of sulfur dioxide (SO2) and nitrogen oxide (NOX) for the purpose of
controlling acid rain and ground level ozone.  In addition, the CAAA address the
control of toxic air pollutants. Installation of continuous emissions monitors
and expanded permitting provisions also are included.  Compliance with CAAA
requirements has cost the System approximately $44 million as of December 31,
1997: $10 million for CL&P, $30 million for PSNH, $1 million for WMECO and $3
million for HWP. Compliance costs for additional federal and state NOX control
requirements to be effective in 1999 are currently estimated to be approximately
$5 million for both CL&P and PSNH. In addition, PSNH expects to spend
approximately $2 million a year for SO2 allowances.

     Existing and future federal and state air quality regulations, including
recently proposed regulations, could hinder or possibly preclude the
construction of new, or the modification of existing, fossil units in the
System's service area and could raise the capital and operating cost of existing
units.  The ultimate cost impact of these requirements on the System cannot be
estimated because of uncertainties about how EPA and the states will implement
various requirements of the CAAA.

     Section 126 of the Clean Air Act provides for parties to request that the
EPA take action against emissions sources whose emissions may be atmospherically
transported and contribute to nonattainment of the National Ambient Air Quality
Standards in other states.  In accordance with this, a group of northeastern
states filed a petition with EPA in 1997 asking them to take action against a
broadly defined group of emissions sources in several midwestern states which
are believed to be contributing to the nonattainment of the ozone standard in
the Northeast. EPA has deferred specific action on the Section 126 petitions
until its call for state implementation plans in the affected states is
complete, probably about 2003. A final decision by the EPA could have a
significant effect on NOX reduction requirements imposed on System companies
after 1999.

          HAZARDOUS WASTE REGULATIONS

     As many other industrial companies have done in the past, System companies
disposed of residues from operations by depositing or burying such materials on-
site or disposing of them at off-site landfills or facilities.  Typical
materials disposed of include coal gasification waste, fuel oils, gasoline and
other hazardous materials that might contain PCBs.  It has since been determined
that deposited or buried wastes, under certain circumstances, could cause
groundwater contamination or create other environmental risks.  The System has
recorded a liability for what it believes is, based upon currently available
information, its estimated environmental remediation costs for waste disposal
sites for which the System companies expect to bear legal liability, and
continues to evaluate the environmental impact of its former disposal practices.
Under federal and state law, government agencies and private parties can attempt
to impose liability on System companies for such past disposal.  At December 31,
1997, the liability recorded by the System for its estimated environmental
remediation costs for known sites needing remediation including those sites
described below, exclusive of recoveries from insurance or from third parties,
was approximately $16.2 million. These costs could be significantly higher if
alternative remedies become necessary.

     Under the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, commonly known as Superfund, EPA has the
authority to clean up or order clean up of hazardous waste sites and to impose
the clean up costs on parties deemed responsible for the hazardous waste
activities on the sites.  Responsible parties include the current owner of a
site, past owners of a site at the time of waste disposal, waste transporters
and waste generators.  The System currently is involved in one Superfund site in
New Jersey, two in New Hampshire and one in Kentucky, which could have a
material impact on the System.  The System has committed in the aggregate
approximately $1.3 million to its share of the clean up of these sites.

     As discussed below, in addition to the remediation efforts for the above-
mentioned Superfund sites, the System has been named as a potentially
responsible party (PRP) and is monitoring developments in connection with
several state environmental actions. The level of study of each site and the
information about the waste contributed to the site by the System and other
parties differs from site to site.  Where reliable information is available that
permits the System to make a reasonable estimate of the expected total costs of
remedial action and/or the System's likely share of remediation costs for a
particular site, those cost estimates are provided below.  All cost estimates
were made in accordance with generally accepted accounting principles where
remediation costs were probable and reasonably estimable.

     In 1987, the Connecticut Department of Environmental Protection (CDEP)
published a list of 567 hazardous waste disposal sites in Connecticut.  The
System owns two sites, in Stamford and Rockville, which are on this list. Both
sites were formerly used by CL&P predecessor companies for the manufacture of
coal gas (also known as town gas sites) from the late 1800s to the 1950s. Site
investigations have been completed at these sites and discussions with state
regulators are in progress to address the need for and extent of remediation
necessary to protect public health and the environment. The total reserve
established for these two sites is $6.5 million. CL&P has also established a
reserve of $575,000 in connection with its share of the clean up of a site
located in Winsted.

     CL&P owns a 2.6 mile section of an abandoned railroad bed in Portland.
Past studies of portions of the railroad bed have indicated elevated levels of
arsenic in the upper two to three feet of soil. A portion of this site was
cleaned up in 1997, but the System continues to reserve $275,000 for remediation
efforts at the remainder of the site.

     PSNH contacted New Hampshire Department of Environmental Services (NHDES)
in December 1993 concerning possible coal tar contamination in Laconia, New
Hampshire, in Lake Opechee and the Winnipesaukee River near an area where PSNH
and a second PRP formerly owned and operated a coal gasification plant from the
late 1800's to the 1950's. A comprehensive site investigation was completed in
December 1996.  This study has shown that byproducts from the operation of the
former manufactured gas plant are present in groundwater, subsurface soil and in
the sediments of the adjacent Winnipesaukee River.  A reserve of $4.8 million
has been established for this site. Additional studies are planned in 1998 to
implement interim remedial measures, assess site risks and develop a remediation
plan. Interim cost sharing agreements with a second PRP in which this PRP
contributes 25% to the cost of the site investigations are in effect to
implement studies in 1998.

     A second coal gasification facility formerly owned and operated by a
predecessor company to PSNH is located in Keene, New Hampshire.  The NHDES has
been notified of the presence of coal tar and fuel oil contamination.
Additional New Hampshire sites include several former manufactured gasification
facilities, an inactive ash landfill located at Dover Point and a municipal
landfill in Peterborough.  Studies of these sites are ongoing. PSNH's liability
at these sites is not expected to be material.

     In Massachusetts, System companies have been designated by the
Massachusetts Department of Environmental Protection (MDEP) as a PRP for twelve
sites under MDEP's hazardous waste and spill remediation program. At two sites,
the System may incur remediation costs that may be material to HWP depending on
the remediation requirements.  At one site, HWP has been identified by MDEP as
one of three PRPs in a coal tar site in Holyoke, Massachusetts.  HWP owned and
operated the Holyoke Gas Works from 1859 to 1902.  The site is located on the
east side of Holyoke, adjacent to the Connecticut River and immediately
downstream of HWP's Hadley Falls Station. MDEP has designated both the land and
river deposit areas as priority waste disposal sites. The PRPs have been
notified of the need to remove tar deposits from the river. To date,  HWP has
spent approximately $1 million for river studies and construction costs related
to the site.  The total estimated costs for remediation of tar patches in the
river range from $2 million to $3 million.  HWP has agreed to complete the
remediation of tar patches following negotiations of a consent decree with all
state and federal regulatory agencies.

     The second site is a former manufactured gas plant facility in Easthampton,
Massachusetts.  WMECO predecessor companies owned and operated the Easthampton
Gas Works from 1864 to 1924.  Previous investigations have identified coal tar
deposits on the land portion of the site. An analysis of the human, health and
ecological risks at the site and a remedial action plan will be submitted to the
MDEP in 1998. WMECO has reserved approximately $1 million for remediation costs
for the site.

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


ELECTRIC AND MAGNETIC FIELDS

     In recent years, published reports have discussed the possibility of
adverse health effects from electric and magnetic fields (EMF) associated with
electric transmission and distribution facilities and appliances and wiring in
buildings and homes.  Most researchers, as well as numerous scientific review
panels considering all significant EMF epidemiological and laboratory studies to
date, agree that current information remains inconclusive, inconsistent and
insufficient for risk assessment of EMF exposures.  The most significant
scientific study released on EMF in 1997 was the July 3rd New England Journal of
Medicine publication of the results of the U.S. National Cancer Institute's
(NCI) study of potential associations between residential EMF exposure and
childhood acute lymphocytic leukemia (ALL), the most common form of childhood
cancer in the United States.  The NCI study was the largest of its kind to date,
and found "little support for the hypothesis that living in homes with
high...average magnetic-field levels or in homes close to electrical
transmission or distribution lines is related to risk" of childhood ALL.

     Based on this information, management does not believe that a causal
relationship between EMF exposure and adverse health effects has been
established or that significant capital expenditures are appropriate to minimize
unsubstantiated risks.  The System companies are continuing to closely monitor
research and government policy developments.  No legislation related to EMF was
considered in Connecticut, Massachusetts or New Hampshire in 1997.

     The System supports further research into the subject and is voluntarily
participating in the funding of the ongoing National EMF Research and Public
Information Dissemination Program.  If further investigation were to demonstrate
that the present electricity delivery system is contributing to increased risk
of cancer or other health problems, the industry could be faced with the
difficult problem of delivering reliable electric service in a cost-effective
manner while managing EMF exposures.  In addition, if the courts were to
conclude that individuals have been harmed and that utilities are liable for
damages, the potential monetary exposure for all utilities, including the System
companies, could be enormous.  Without definitive scientific evidence of a
causal relationship between EMF and health effects, and without reliable
information about the kinds of changes in utilities' transmission and
distribution systems that might be needed to address the problem, if one is
found, no estimates of the cost impacts of remedial actions and liability awards
are available.

     CL&P has been the focus of media reports since 1990 charging that EMF
associated with a substation and related distribution lines in Guilford,
Connecticut, are linked with various cancers and other illnesses in several
nearby residents.  See "Item 3.  Legal Proceedings" for information about two
suits brought by plaintiffs who now or formerly lived near that substation.

FERC HYDRO PROJECT LICENSING

     Federal Power Act licenses may be issued for hydroelectric projects for
terms of 30 to 50 years as determined by FERC.  Upon the expiration of a
license, any hydroelectric project so licensed is subject to reissuance by FERC
to the existing licensee or to others upon payment to the licensee of the lesser
of fair value or the net investment in the project plus severance damages less
certain amounts earned by the licensee in excess of a reasonable rate of return.

     The System companies currently hold FERC licenses for 19 hydroelectric
projects aggregating approximately 1,375 MW of capacity, located in Connecticut,
Massachusetts and New Hampshire.  Both WMECO and PSNH have proposed to auction
their hydroelectric projects in the future, with WMECO's auction likely to occur
in the first half of 1998.

     Four of the System licenses expired on December 31, 1993 (WMECO's Gardners
Falls project and PSNH's Ayers Island, Smith and Gorham projects).  These
licenses have all been renewed over the last few years.

     The license for HWP's Holyoke Project expires in late 1999.  On September
3, 1997, HWP filed its application for a new license for the Holyoke Project.
On August 29, 1997, a competing application for the project was submitted by the
Ashburnham Municipal Light Plant and the Massachusetts Municipal Wholesale
Electric  Company.   The competing application proposes to add an additional 15
MW of generating capacity at the site, as well as additional changes,
modifications and improvements to the facility.  It is anticipated that the
competing license application will be amended to add or substitute the City of
Holyoke Gas and Electric Department as a competing applicant.

     Absent significant differences in the competing license applications the
Federal Power Act gives a preference to an existing licensee for the new
license.  It is not known if the competing license applicants' proposal to add
15 MW of additional capacity and the other proposed changes, modifications and
improvements to the Holyoke Project are sufficient to overcome HWP's preference.
If the license is awarded to a competing applicant, HWP is entitled to
compensation equal to the lesser of book value or fair market value and
severance damages pursuant to the Federal Power Act. FERC has established a
procedural schedule for preliminary licensing activities, but the time frame for
completion of all licensing activities and issuance of a new license has not
been established at this time.

     CL&P's FERC licenses for operation of the Falls Village and Housatonic
Hydro Projects expire in 2001. A draft license application is scheduled to be
completed in the last quarter of 1998.

     FERC has issued a notice indicating that it has authority to order project
licensees to decommission projects that are no longer economic to operate.  The
potential costs of decommissioning a project, however, could be substantial.
FERC has recently ordered its first project decommissioning under this
authority.  It is likely that this FERC decision will be appealed.

                                  EMPLOYEES

     As of December 31, 1997, the System companies had 9,015 full and part-time
employees on their payrolls, of which 2,163 were employed by CL&P, 1,254 by
PSNH, 507 by WMECO, 75 by HWP, 1,647 by NNECO, 2,530 by NUSCO and 839 by NAESCO.
NU, NAEC, Charter Oak, Mode 1 and Select Energy have no employees.

     In December 1996, the System announced a voluntary separation program
affecting approximately 1,100 employees. The separations of the 99 participants
occurred between April 1, 1997 and March 1, 1998.  The estimated cost of the
program is approximately $5.8 million.

     Approximately 2,138 employees of CL&P, PSNH, WMECO, NAESCO and HWP are
covered by nine union agreements, which expire between June 1, 1998 and May 31,
1999.


ITEM 2.   Properties

     The physical properties of the System are owned or leased by subsidiaries
of NU.  CL&P's principal plants and other properties are located either on land
which is owned in fee or on land, as to which CL&P owns perpetual occupancy
rights adequate to exclude all parties except possibly state and federal
governments, which has been reclaimed and filled pursuant to permits issued by
the United States Army Corps of Engineers.  The principal properties of PSNH
are held by it in fee. In addition, PSNH leases space in an office building
under a 30-year lease expiring in 2002. WMECO's principal plants and a major
portion of its other properties are owned in fee, although one hydroelectric
plant is leased.  NAEC owns a 35.98 percent interest in Seabrook 1 and
approximately 560 acres of exclusion area land located around the unit. In
addition, CL&P, PSNH, and WMECO have certain substation equipment, data
processing equipment, nuclear fuel, gas turbines, nuclear control room
simulators, vehicles, and office space that are leased.  With few exceptions,
the System companies' lines are located on or under streets or highways, or on
properties either owned or leased, or in which the company has appropriate
rights, easements, or permits from the owners.

     CL&P's properties and PSNH's properties are subject to the lien of each
company's respective first mortgage indenture.  In addition, any PSNH
outstanding revolving credit agreement borrowings are secured by a second lien,
junior to the lien of the first mortgage indenture, on PSNH's property located
in New Hampshire. WMECO's properties are subject to the lien of its first
mortgage indenture.  NAEC's First Mortgage Bonds are secured by a lien on the
Seabrook 1 interest described above, and all rights of NAEC under the Seabrook
Power Contracts.  In addition, CL&P's and WMECO's interests in Millstone 1 are
subject to second liens for the benefit of lenders under agreements related to
pollution control revenue bonds.  Various of these properties are also subject
to minor encumbrances which do not substantially impair the usefulness of the
properties to the owning company.

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

Transmission and Distribution System

     At December 31, 1997, the System companies owned 103 transmission and 410
distribution substations that had an aggregate transformer capacity of
25,199,669 kilovoltamperes (kVa) and 9,115,203 kVa, respectively; 3,074 circuit
miles of overhead transmission lines ranging from 69 kilovolt (kV) to 345 kV,
and 192 cable miles of underground transmission lines ranging from 69 kV to 138
kV; 32,802 pole miles of overhead and 1,999 conduit bank miles of underground
distribution lines; and 404,356 line transformers in service with an aggregate
capacity of 16,997,000 kVa.


Electric Generating Plants
                                    

     As of December 31, 1997, the electric generating plants of the System
companies and the System companies' entitlement in the generating plant of the
Vermont Yankee regional generating company were as follows (See "Item 1.
Business - Electric Operations, Nuclear Generation" for information on ownership
and operating results for the year.):

                                                                       Claim
                                                         Year       Capability*
Owner      Plant Name (Location)        Type           Installed    (kilowatts)
          

CL&P       Millstone (Waterford, CT)
             Unit 1**                  Nuclear             1970       524,637
             Unit 2**                  Nuclear             1975       708,345
             Unit 3**                  Nuclear             1986       606,453
           Seabrook (Seabrook, NH)     Nuclear             1990        47,175
           VT Yankee (Vernon, VT)      Nuclear             1972        45,353
           Total Nuclear-Steam Plants   (5 units)                   1,931,963
           Total Fossil-Steam Plants    (10 units)        1954-73   1,883,000
           Total Hydro-Conventional     (25 units)        1903-55      98,970
           Total Hydro-Pumped Storage   (7 units)         1928-73     937,550
           Total Internal Combustion    (20 units)        1966-96     567,940
           Total CL&P Generating Plant  (67 units)                  5,419,423

PSNH       Millstone (Waterford, CT)
              Unit 3**                 Nuclear             1986        32,624
           VT Yankee (Vernon, VT)      Nuclear             1972        19,068
           Total Nuclear-Steam Plants   (2 units)                      51,692
           Total Fossil-Steam Plants    (7 units)         1952-78   1,051,538
           Total Hydro-Conventional     (20 units)        1917-83      69,040
           Total Internal Combustion    (5 units)         1968-70     103,900
           Total PSNH Generating Plant  (34 units)                  1,276,170

WMECO      Millstone (Waterford, CT)
              Unit 1**                 Nuclear             1970       123,063
              Unit 2**                 Nuclear             1975       166,155
              Unit 3**                 Nuclear             1986       140,216
           VT Yankee (Vernon, VT)      Nuclear             1972        11,948
           Total Nuclear-Steam Plants   (4 units)                     441,382
           Total Fossil-Steam Plants    (1 unit)           1957       107,000
           Total Hydro-Conventional     (27 units)        1904-34     110,910***
           Total Hydro-Pumped Storage   (4 units)         1972-73     212,800
           Total Internal Combustion    (3 units)         1968-69      60,500

           Total WMECO Generating Plant (39 units)                    932,592


NAEC       Seabrook (Seabrook, NH)     Nuclear             1990       418,111

HWP        Mt. Tom (Holyoke, MA)       Fossil-Steam        1960       147,000
           Total Hydro-Conventional     (15 units)        1905-83      43,560
           Total HWP Generating Plant   (16 units)                    190,560

NU System  Millstone (Waterford, CT)
              Unit 1**                 Nuclear             1970       647,700
              Unit 2**                 Nuclear             1975       874,500
              Unit 3**                 Nuclear             1986       779.239
           Seabrook (Seabrook, NH)     Nuclear             1990       465,286
           VT Yankee (Vernon, VT)      Nuclear             1972        76,369
           Total Nuclear-Steam Plants  (5 units)                    2,843,094
           Total Fossil-Steam Plants   (19 units)         1952-78   3,188,538
           Total Hydro-Conventional    (87 units)         1903-83     322,480
           Total Hydro-Pumped Storage  (7 units)          1928-73   1,150,350
           Total Internal Combustion   (28 units)         1966-96     732,350
           Total NU System Generating Plant
              Including Vermont Yankee  (146 units)                 8,236,802
              Excluding Vermont Yankee  (145 units)                 8,160,433

 *Claimed capability represents winter ratings as of December 31, 1997.

 **The numbers shown represent claimed capability at December 31, 1996.
   Millstone 1, 2, and 3 have been out of service since November 4, 1995,
   February 21, 1996 and March 30, 1996, respectively.  The company has
   restructured its nuclear organization and is currently implementing
   comprehensive plans to restart the units.

   The actual date of the return to service for each of the units is
   dependent upon the completion of independent inspections and reviews
   by the Nuclear Regulatory Commission (NRC) and a vote by the NRC
   Commissioners.  NU hopes to return Millstone 3 to service in early
   spring of 1998 and Millstone 2 three to four months after Millstone 3.
   Millstone 1 is currently in extended maintenance status.

***Total Hydro-Conventional capability includes the Cobble Mtn. plant's
   33,960 kW which is leased from the City of Springfield, MA.


Franchises

     NU's operating subsidiaries hold numerous franchises in the territories
served by them.  For more information regarding recent judicial, regulatory and
legislative decisions and initiatives that may affect the terms under which the
System companies provide electric service in their franchised territories, see
Item 1. "Business - Electric Industry Restructuring" and "Item 3. Legal
Proceedings."

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

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

     PSNH.  Subject to the power of alteration, amendment or repeal by the
General Court (legislature) of the State of New Hampshire and subject to certain
approvals, permits and consents of public authority and others prescribed by
statute, PSNH has, subject to certain exceptions not deemed material, valid
franchises free from burdensome restrictions to sell electricity in the
respective areas in which it is now supplying such service.

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

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

     In addition to the right to sell electricity as set forth above, the
franchise of NNECO includes, among others, rights and powers to manufacture,
generate and transmit electricity, and to erect and maintain facilities on
certain public highways and grounds, all subject to such consents and approvals
of public authority and others as may be required by law.

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

     Pursuant to the Massachusetts restructuring legislation, the DTE  is
required to define service territories for each distribution company, including
WMECO, based on the service territories actually served on July 1, 1997, and
following to the extent possible municipal boundaries. After established by the
DTE, until terminated by effect of law or otherwise, the distribution company
shall have the exclusive obligation to provide distribution service to all
retail customers within its service territory, and no other person shall provide
distribution service within such service territory without the written consent
of such distribution company.

     HWP and Holyoke Power and Electric Company (HP&E).  HWP, and its wholly
owned subsidiary HP&E, are authorized by their charters to conduct their
businesses in the territories served by them.  HWP's electric business is
subject to the restriction that sales be made by written contract in amounts of
not less than 100 horsepower, except for municipal customers in the counties of
Hampden or Hampshire, Massachusetts and except for customers who occupy property
in which HWP has a financial interest, by ownership or purchase money mortgage.
HWP also has certain dam and canal and related rights, all subject to such
consents and approvals of public authorities and others as may be required by
law.  The two companies have locations in the public highways for their
transmission and distribution lines.  Such locations are granted pursuant to the
laws of Massachusetts by the Department of Public Works of Massachusetts or
local municipal authorities and are of unlimited duration, but the rights
thereby granted are not vested.  Such locations are for specific lines only and,
for extensions of lines in public highways, further similar locations must be
obtained from the Department of Public Works of Massachusetts or the local
municipal authorities.  The two companies have no other utility franchises.

     NAEC.  NAEC is authorized by the NHPUC to own and operate its interest in
Seabrook 1.


ITEM 3 - LEGAL PROCEEDINGS

1.   Litigation Relating to Electric and Magnetic Fields

     NU and CL&P are currently involved in one lawsuit alleging physical and
emotional damages from exposure to "electromagnetic radiation" generated by the
defendants.  Management believes that the allegations that EMF caused or
contributed to the plaintiffs' illnesses are not supported by scientific
evidence.  A similar case was resolved in NU and CL&P's favor at the trial
level, but was appealed and pending hearing in the Connecticut Supreme Court
when on October 31, 1997 the plaintiff withdrew the appeal, ending the
litigation.

2.   Southeastern Connecticut Regional Resources Recovery Authority (SCRRRA) -
     Application of the Municipal Rate

     This matter involves three separate disputes over the rates that apply to
CL&P's purchases of the generation of the SCRRRA project in Preston,
Connecticut.  A favorable ruling on all of these matters could result in savings
to CL&P customers of approximately $20 million over the terms of the agreement
with the SCRRRA.  FERC has ruled in CL&P's favor in one of these matters, but
this decision has been appealed to the United States D. C. Circuit Court of
Appeals.  A final ruling in this decision in favor of CL&P would also resolve
the second dispute.  A Connecticut Superior Court, however, has ruled in favor
of the SCRRRA in the final dispute.  CL&P has appealed this decision. The appeal
is now pending in the Connecticut Supreme Court.

 3.   Wallingford Resource Recovery Lawsuit

     On April 18, 1997, CL&P was served with a lawsuit filed in Connecticut
Superior Court by the Connecticut Resources Recovery Authority (CRRA) and a
subsidiary of Ogden Martin.  The suit claims that CL&P breached its electricity
purchase agreement for the Wallingford Resources Recovery Project by refusing to
purchase certain electricity at the rates specified in the agreement. The amount
at issue through the end of 1997 is approximately $2.45 million, which amount
will increase by approximately $700,000 each year. The electricity in question
results from the buyout by the project of its steam contract and its termination
of steam sales to American Cyanimid. Attorneys for CL&P have filed their
appearance.

4.    Connecticut DPUC - CL&P's Petition for Declaratory Ruling Regarding
      Proposed      Retail Sales of Electricity by Texas-Ohio Power, Inc. (TOP)

     On August 3, 1995, CL&P filed a petition for declaratory rulings with the
DPUC to determine whether TOP, which built a small cogeneration plant in
Manchester, Connecticut, can sell electricity from the facility to two CL&P
retail customers in Manchester. On December 6, 1995, the DPUC ruled that,
because TOP's project would not use the public streets, it did not require
specific legislative authorization to make retail sales of electricity.  In
February 1997, the Hartford Superior Court upheld the DPUC's decision.  CL&P
appealed this decision. On February 9, 1998, the Connecticut Supreme Court ruled
in CL&P's favor.  Specifically, the Court reversed the DPUC and Superior Court
rulings, finding that TOP was a foreign electric company and therefore was
prohibited from making retail sales of electricity in Connecticut.  The Court
did rule that the DPUC was correct in finding that because TOP did not use
public streets it was not an electric light company prohibited by Connecticut
corporate law from making retail electric sales.  The Court made it clear that
it would have ruled differently on this issue if TOP were using public streets.
On February 27, 1998, TOP filed a petition for rehearing.

     In a related matter, CL&P has been sued in the United States Bankruptcy
Court for the Southern District of Texas - Houston Division by Triple C Power,
Inc., the successor of the now bankrupt TOP, alleging tortious interference with
contract; vexatious litigation/malicious prosecution; restraint of trade in
violation of the Sherman Act; monopolization; civil conspiracy; and deceptive
trade practices.  The plaintiff seeks $20 million in actual damages, plus
attorneys' fees and court costs, $40 million in exemplary damages, and a
trebling of the actual damages, for a total of about $100 million.  CL&P
believes this action is without merit and intends to vigorously defend itself.

5.   Tax Litigation

     In 1991, the Town of Haddam, Connecticut (Haddam) performed a town-wide
revaluation of the CY property in that town.  Based on the report of the
engineering firm hired by the town to perform the revaluation, Haddam determined
that the full fair-market value of the property, as of October 1, 1991, was $840
million.  At that time, CY's net-book value was $245 million.  On September 5,
1996, a Connecticut court ruled that Haddam had over-assessed CY at three and a
half times its proper assessment. The decision set the plant's fair market value
at $235 million. On May 9, 1997, Haddam and CY reached an agreement regarding
the over-assessment. Haddam repaid CY an amount totaling $13,990,000.

6.   Long Island Cable - Citizen's Suit Settlement

      On April 4, 1996, a citizen's suit against Long Island Lighting Company
(LILCO), a non-affiliate of NU, CL&P and NUSCO (collectively, the "Companies")
was filed in Federal District Court in Connecticut. The suit was filed under the
Federal Clean Water Act regarding leaks from the Long Island cable into the Long
Island Sound.  On April 23, 1997, the Companies and the plaintiffs jointly filed
a Stipulation of Dismissal in Federal District Court, which settled this suit.
The settlement does not impose material costs on CL&P or any other System
companies.

7.  Shareholder Derivative Actions Settlement

      On December 29, 1997, a United States District Court judge entered an
order, which became final on January 28, 1998, approving a $25 million
settlement of seven derivative lawsuits and one demand letter filed by
shareholders of NU related to alleged mismanagement at Millstone.  The
settlement had been announced by the company in mid-1997. Under the agreement,
insurers for certain of NU's present and former officers and trustees will pay
NU $25 million less attorneys' fees, and NU has agreed to certain corporate
governance enhancements.  On February 2, 1998, approximately $18 million under
the settlement was paid to NU.  The judge has still not made a ruling regarding
the amount of attorneys' fees to be deducted from the $25 settlement. The
plaintiffs' counsel have requested fees of approximately $7.5 million. If and
when the judge determines that less than approximately $7.5 million will be
awarded as attorneys' fees, NU also will receive that amount.

8.    Shareholder Securities Class Actions

      Consolidated Federal Court Actions:  Pursuant to a court order dated
October 1, 1997, the six class actions separately filed against NU in 1996 were
consolidated for pre-trial and trial purposes.  The actions are based on various
Federal securities law and common law theories alleging misrepresentations and
omissions in public disclosures related to the System's nuclear situation.
These complaints represent classes of plaintiffs who purchased or otherwise
acquired NU common stock during periods ranging from March 1994 to April 1996.

      State Court Actions: NU has been served with two separately filed class
actions based on various state securities law and common law theories alleging
misrepresentations and omissions in public disclosures related to the System's
nuclear situation.  These complaints represent classes of plaintiffs who
purchased or otherwise acquired NU common stock during periods ranging from
December 1993 to April 1996.  Plaintiffs' counsel in both state actions agreed
to stay the actions pending the outcome of the consolidated federal court
actions described above.

      NU believes that all of these class actions are without merit and intends
to vigorously defend in all such actions.

9.   Connecticut Municipal Electric Energy Cooperative (CMEEC) Dispute

      This matter involves a dispute with CMEEC over its obligations under its
Millstone Units 1 & 2 contract with CL&P, under which CMEEC has a 3.49 percent
life-of-unit interest in each of the units. Since October 1996, CMEEC has failed
to make payment on its obligations of approximately $1.8 million per month,
claiming that CL&P materially breached its contractual obligations.  CMEEC has
requested arbitration of the issues, which arbitration is currently ongoing.
CL&P has denied the allegations and filed a petition on July 1, 1997 requesting
the Connecticut Superior Court to order CMEEC to pay the outstanding obligations
(about $25 million) and make continuing payments while the arbitration is
proceeding. CL&P's petition was denied and CL&P has requested reargument and
that the court vacate its order.

      On March 2, 1998, the parties executed a release and settlement agreement
that, upon authorization by the FERC, will result in the termination of CMEEC's
life-of-unit contractual interests in Millstone Units 1 and 2, and 26 other
fossil or hydro generating units owned by CL&P.  Under the agreement, CMEEC will
pay CL&P, upon FERC approval of the settlement, the lump sum amount of $24
million and each party will provide to the other a release of any claims that
relate to the contracts or to Millstone Units 1 and 2.  The parties have agreed
to request suspension of the arbitration and court proceedings pending FERC's
authorization to cancel the rate schedules for the life-of-unit contracts.

10.   Millstone 3 - Joint Owner Litigation

      CL&P and WMECO, through NNECO as agent, operate Millstone 3, at cost and
without profit, under a Sharing Agreement that obligates them to utilize good
utility operating practices and requires the joint owners of the facility to
share the risk of employee negligence and other risks of operation and
maintenance pro-rata in accordance with their ownership shares.  The Sharing
Agreement also provides that CL&P and WMECO would only be liable for damages to
the non-NU owners for a deliberate breach of the agreement pursuant to
authorized corporate action.

     On August 7, 1997, the non-NU owners of Millstone 3 filed demands for
arbitration with CL&P and WMECO as well as lawsuits in Massachusetts Superior
Court against NU and its current and many of its former trustees.  The non-NU
owners raise a number of contract, tort and statutory claims, arising out of the
operation of Millstone 3. The arbitrations and lawsuits seek to recover
compensatory damages, punitive damages, treble damages and attorneys' fees.
Owners representing approximately two-thirds of the non-NU interests in
Millstone 3 have claimed compensatory damages in excess of $200 million. In
addition, one of the lawsuits seeks to restrain NU from disposing of its shares
of the stock of WMECO and Holyoke Water Power Company, pending the outcome of
the lawsuit. The NU companies believe there is no legal basis for the claims and
intend to defend against them vigorously.  The parties are proceeding with the
selection of an arbitrator to hear the claims against CL&P and WMECO. The
defendants, including NU, in the three lawsuits have requested consolidation of
those actions and have filed motions to dismiss the lawsuits or, in the
alternative, to stay the court proceedings pending the outcome of the
arbitrations.

11. Maine Yankee - Secondary Purchasers Dispute

      A number of municipalities and cooperatives (Secondary Purchasers) have
notified the sponsors of MY, including CL&P, WMECO and PSNH, that they consider
their purchase and payment obligations under their purchase agreements to have
been terminated as a result of the August 6, 1997 decision by the MYAPC Board of
Directors (MY Board) to retire the facility.  Accordingly, these Secondary
Purchasers have informed the sponsors that they will be making no further
payments under the contracts for the period following the MY Board's decision.
Through such contracts, the sponsors agreed to deliver a portion of the capacity
and electrical output from the facility until the year 2003 in exchange for
payment by the Secondary Purchasers of a pro rata share of the plant's costs and
expenses.  NU's subsidiaries' estimated exposure under these contracts is
approximately $15 million to $20 million over the remaining term of these
agreements.

     On November 28, 1997, the Secondary Purchasers filed a "Notice of
Initiation of Arbitration" with the sponsors. On December 15, 1997, the sponsors
filed a complaint at FERC against the Secondary Purchasers, asking FERC to (i)
direct them to pay all amounts due plus interest; (ii) to declare that the
Secondary Purchasers remain obligated to make payment through December 2002; and
(iii) to order a modification to the contracts that preserves the continuing
obligations of the municipalities for decommissioning and other post-shutdown
costs beyond 2002.  On January 16, 1998, the Secondary Purchasers filed a Motion
to Compel Arbitration in Maine State Court.

12.  NRC - Section 2.206 Petitions

     Spent Fuel Pool Off-Load Practices 2.206 Petition:  In August 1995, a
petition was filed with the NRC under Section 2.206 of the NRC's regulations by
the organization We the People and a NUSCO employee.  The petitioners maintained
that NU's historic practice of off-loading the full reactor core at Millstone 1
resulted in spent fuel pool heat loads in excess of the pool's NRC-approved
cooling capability, and asserted that the practice was a knowing and willful
violation of NRC requirements.  The petitioners also filed a supplemental
petition concerning refueling practices at Millstone 2 and 3 and Seabrook
Station.

      On December 26, 1996, the Acting Director of the Office of Nuclear Reactor
Regulation issued a partial decision granting, in part, the petition.  The
decision, which is limited to the NRC staff's technical review of the issues
raised by petitioners, concluded that the design of the spent fuel pool and
related system at Millstone 1 was adequate, and that the full core offload
practices at that unit, Millstone 3 and Seabrook were safe.  The petitioners'
assertions regarding Millstone 2 were not substantiated. The Director further
concluded that the regulatory actions taken by the NRC to date regarding the
three Millstone units, including the imposition of an Independent Corrective
Action Verification Program prior to restart, were broader than the actions
requested by petitioners and thus constituted a partial grant of petitioners'
request.  Issues of wrongdoing raised in the petition remain under consideration
by the NRC staff, and will not be addressed until after the U.S. Attorney has
concluded its investigation of the spent fuel pool issues and decided whether to
commence criminal proceedings (See paragraph 13 below).  By letter to the NRC
dated July 9, 1997, the petitioner requested that the hearing on its petition be
reconvened to submit additional information in support of the petition.

     Other 2.206 Petitions: The Citizens Awareness Network (CAN) filed a
petition with the NRC under Section 2.206 of the NRC's regulations in November
1996 requesting that the NRC suspend or revoke the operating licenses for
Millstone 1, 2, and 3 and CY.  The petition also requested that the NRC take
enforcement actions and make investigations based on numerous allegations.  On
September 12, 1997, the Director of Nuclear Reactor Regulation (Director) issued
a partial decision granting certain aspects of the petition, denying other
aspects and deferring other aspects of the petition pertaining to possible
wrongdoing.  The NRC responded to these requests by relying upon actions that
have already been taken or actions that are currently under way.  The NRC also
denied petitioners' request that the Millstone restart decision be postponed
until completion of pending investigations into alleged wrongdoing.  However,
the NRC decision indicated that the results of these investigations will be
considered by the NRC as part of the restart deliberations.

     On September 3, 1997, the Director issued a partial decision deferring in
part and denying in part another Section 2.206 petition that had been filed by
CAN and the Nuclear Information Resource Service seeking NRC enforcement action
and placement of certain restrictions on decommissioning activities at CY.  The
decision deferred that aspect of the petition requesting that the NRC take
enforcement action with respect to the radiological controls program at the
plant.  The petitioners' requests that CY be placed on the NRC's watch list and
that a six-month moratorium be placed on decommissioning activities at CY were
denied.

     Another petition under Section 2.206 was filed with the NRC in March 1997
by a then NU employee with the NRC requesting various actions be taken with
respect to the operating licenses for Millstone Units 1, 2 and 3 and CY.  The
NRC has advised the petitioner of receipt of the petition and indicated that the
NRC Director's decision may be delayed as a result of ongoing investigations by
the NRC Office of Investigations and NRC Office of Inspector General.  On
February 11, 1998, the Director of the Office of Nuclear Reactor Regulation
issued a decision which denied the petitioners' requests in their entirety.

     On February 2, 1998, CAN filed a third Section 2.206 petition with the NRC
pertaining to nuclear issues in Connecticut. This petition requests that the NRC
revoke the operating licenses of Millstone Units 1, 2 and 3 as a result of the
company's harassment and intimidation of the nuclear workforce for raising
safety issues.  CAN's petition was prompted by the public disclosure of an
internal memorandum prepared by the Millstone Nuclear Oversight organization.
CAN also requested that the NRC refer the matter to the U.S. Department of
Justice for an investigation.  The NRC has not yet responded to CAN's petition.

13.  NRC Office of Investigations and U.S. Attorney Investigations and
Related Matters

     The NRC's Office of Investigations (OI) has been examining various matters
at Millstone and CY, including but not limited to procedural and technical
compliance matters and employee concerns.  One of these matters has been
referred, and others may be referred, to the Office of the U.S. Attorney for the
District of Connecticut (U.S. Attorney) for possible criminal prosecution.  The
referred matter concerns full core off-load procedures and related matters at
Millstone.  The U.S. Attorney is also reviewing possible criminal violations
arising out of certain of NNECO's other activities at Millstone and CY,
including the 1996 nuclear workforce reduction; its licensed operator training
programs; and a matter involving health physics records.

     The U.S. Attorney, together with the U.S. EPA, is also investigating
possible criminal violations of federal environmental laws at certain NU
facilities, including Millstone and Devon.  NU has been informed by the
government that it is a target of the investigation, but that no one in senior
management is either a target or a subject of their investigations.

     Management does not believe that any System company or officer has engaged
in conduct that would warrant a federal criminal prosecution.  NU intends to
fully cooperate with the OI and the U.S. Attorney in their ongoing
investigations.

14.  Connecticut Attorney General - Civil Lawsuit

     On November 17, 1997, the Connecticut Attorney General (Attorney General)
initiated a civil lawsuit, on behalf of the Connecticut Department of
Environmental Protection (CDEP), against NNECO and NUSCO for violations of the
Millstone Station water discharge permit and Connecticut water discharge
regulations.  The seven count suit alleges in general that NNECO moved a
sampling point for a discharge to an inappropriate location and treated and/or
discharged certain waste waters without authorization.  The Attorney General has
stated publicly that he is seeking penalties over $1 million.

15.   New Hampshire Office of Consumer Advocate (OCA) and the Campaign for
      Ratepayers Rights (CRR) Case

      On March 5, 1998, the New Hampshire Supreme Court (Court) denied two
appeals of several NHPUC orders which approved special contracts between PSNH
and five industrial customers.  The appellants, OCA and CRR, complained that all
of PSNH's special contracts were void and constituted a breach of the 1989
statute authorizing the NHPUC to approve the PSNH Rate Agreement.  The Court
found that approval of such special contracts did not violate the enabling
statute, which only required the establishment of a fixed rate path under the
PSNH Rate Agreement for tariff rates of general application.  Since PSNH did not
request any adjustment to other customers' rates as a result of the special
contracts, the customers represented by OCA and CRR suffered no harm.

16.  Other Legal Proceedings

     The following sections of Item 1. "Business" discuss additional legal
proceedings:  See "Rates" for information about CL&P's rate and energy 
adjustment clause proceedings, various state restructuring proceedings and 
civil lawsuits related thereto and NHPUC proceedings involving PSNH's franchise
rights; "Electric Operations--Transmission Access and FERC Regulatory Changes" 
for information about proceedings relating to power and transmission issues;
"Electric Operations--Nuclear Generation" and "Electric Operations-Nuclear Plant
Performance and Regulatory Oversight" for information related to nuclear plant
performance, nuclear fuel enrichment pricing, high-level and low-level
radioactive waste disposal, decommissioning matters and NRC regulation; "Other
Regulatory and Environmental Matters" for information about proceedings
involving surface water and air quality, toxic substances and hazardous waste,
electric and magnetic fields, licensing of hydroelectric projects, and other
matters.

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


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

                                    PART II

Item 5.   Market for the Registrants' Common Equity and Related
          Shareholder Matters

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

      Year         Quarter          High            Low


      1997          First          $14 1/4      $  7 5/8
                    Second           9 7/8         7 3/4
                    Third           10 9/16        9
                    Fourth          13 15/16       9 1/2

      1996          First          $25 1/4        19
                    Second          20 1/4        11 7/8
                    Third           13 3/8        11 1/2
                    Fourth          13 1/2         9 1/2

      As of January 30, 1998, there were 98,923 common shareholders of record of
NU.  As of the same date, there were a total of 136,849,710  common shares
issued, including 6,606,181 million unallocated ESOP shares held in the ESOP
trust.

      NU declared and paid a quarterly dividend of $0.25 per share during the
first quarter of 1997.  On March 25, 1997, the NU Board of Trustees adopted a
resolution suspending the quarterly dividends on NU's common shares,
indefinitely. The declaration of future dividends may vary depending on capital
requirements and income, as well as financial and other conditions existing at
the time.

      Information with respect to dividend restrictions for NU and its
subsidiaries is contained in Item 1. Business under the caption "Financing
Program - Financing Limitations" and in Note (b) to the "Consolidated Statements
of Common Shareholders' Equity" on page 27 of NU's 1997 Annual Report to
Shareholders, which information is incorporated herein by reference.

      CL&P, PSNH, WMECO, and NAEC.  The information required by this item is not
applicable because the common stock of CL&P, PSNH, WMECO, and NAEC is held
solely by NU.


Item 6.   Selected Financial Data

      NU. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on page 52 of NU's 1997 Annual Report to
Shareholders, which information is incorporated herein by reference.

      CL&P.  Reference is made to information under the heading "Selected
Financial Data" contained on page 54 of CL&P's 1997 Annual Report, which
information is incorporated herein by reference.

      PSNH.  Reference is made to information under the heading "Selected
Financial Data" contained on pages 50 and 51 of PSNH's 1997 Annual Report, which
information is incorporated herein by reference.

      WMECO.  Reference is made to information under the heading "Selected
Financial Data" contained on page 49 of WMECO's 1997 Annual Report, which
information is incorporated herein by reference.

      NAEC.  Reference is made to information under the heading "Selected
Financial Data" contained on page 32 of NAEC's 1997 Annual Report, which
information is incorporated herein by reference.

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

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

     NU.  Reference is made to information under the heading "Management's
Discussion and Analysis" contained on pages 12 through 21 in NU's 1997 Annual
Report to Shareholders, which information is incorporated herein by reference.

     CL&P.  Reference is made to information under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained on pages 42 through 53 in CL&P's 1997 Annual Report, which information
is incorporated herein by reference.

     PSNH.  Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 42 through 49 in PSNH's 1997
Annual Report, which information is incorporated herein by reference.

     WMECO.  Reference is made to information under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained on pages 39 through 48 in WMECO's 1997 Annual Report, which
information is incorporated herein by reference.

     NAEC.  Reference is made to information under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained on pages 26 through 31 in NAEC's 1997 Annual Report, which information
is incorporated herein by reference.


Item 8.   Financial Statements and Supplementary Data

      NU.  Reference is made to information under the headings "Company Report,"
"Report of Independent Public Accountants," "Consolidated Statements of Income,"
"Consolidated Statements of Cash Flows," "Consolidated Statements of Income
Taxes," "Consolidated Balance Sheets," "Consolidated Statements of
Capitalization," "Consolidated Statements of Common Shareholders' Equity,"
"Notes to Consolidated Financial Statements," and "Consolidated Statements of
Quarterly Financial Data" contained on pages 22 through 51 in NU's 1997 Annual
Report to Shareholders, which information, which information is incorporated
herein by reference.

      CL&P.  Reference is made to information under the headings "Consolidated
Balance Sheets," "Consolidated Statements of Income," "Consolidated Statements
of Cash Flows," "Consolidated Statements of Common Stockholder's Equity," "Notes
to Consolidated Financial Statements," "Report of Independent Public
Accountants," and "Statements of Quarterly Financial Data" contained on pages 2
through 41 and page 54 in CL&P's 1997 Annual Report, which information is
incorporated herein by reference.

      PSNH.  Reference is made to information under the headings "Balance
Sheets," "Statements of Income," "Statements of Cash Flows," "Statements of
Common Stockholder's Equity," "Notes to Financial Statements," "Report of 
Independent Public Accountants," and "Statements of Quarterly Financial Data"
contained on pages 2 through 40 and page 52 in PSNH's 1997 Annual Report, which
information is incorporated herein by reference.

     WMECO.  Reference is made to information under the headings "Consolidated
Balance Sheets," "Consolidated Statements of Income," "Consolidated Statements
of Cash Flows," "Consolidated Statements of Common Stockholder's Equity," "Notes
to Consolidated Financial Statements," "Report of Independent Public
Accountants," and "Statements of Quarterly Financial Data" contained on pages 2
through 38 and page 49 in WMECO's 1997 Annual Report, which information is
incorporated herein by reference.

     NAEC.  Reference is made to information under the headings "Balance 
Sheets,""Statements of Income," "Statements of Cash Flows," "Statements of 
Common Stockholder's Equity," "Notes to Financial Statements," "Report of 
Independent Public Accountants," and "Statements of Quarterly Financial Data" 
contained on pages 2 through 24 and page 32 in NAEC's 1997 Annual Report which
information is incorporated herein by reference.

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

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

                                    PART III

Item 10.  Directors and Executive Officers of the Registrants

NU.
     In addition to the information provided below concerning the executive
officers of NU, incorporated herein by reference is the information contained in
the sections "Proxy Statement", "Committee Composition and Responsibility",
"Common Stock Ownership of Certain Beneficial Owners", "Common Stock Ownership
of Management", "Compensation of Trustees", "Executive Compensation", "Pension
Benefits", and "Report on Executive Compensation" of the definitive proxy
statement for solicitation of proxies by NU's Board of Trustees, dated March 31,
1998, which will be and filed with the Commission pursuant to Rule 14a-6 under
the Securities Exchange Act of 1934 (the Act).

                                                     First               First
                              Positions             Elected             Elected
         Name                   Held               an Officer          a Trustee


John H. Forsgren              EVP, CFO             02/01/96               n/a
William T. Frain, Jr.         OTH                  02/01/94               n/a
Cheryl W. Grise               OTH                  06/01/91               n/a
Bruce D. Kenyon               P                    09/03/96               n/a
Hugh C. MacKenzie             P                    07/01/88               n/a
Michael G. Morris             CHB, P, CEO, T       08/19/97            08/19/97
Lisa J. Thibdaue              OTH                  01/01/98               n/a
Robert P. Wax                 SVP, SEC, GC         08/01/92               n/a


CL&P.
                                            First             First
                         Positions         Elected           Elected
         Name              Held           an Officer        a Director

John H. Forsgren        EVP, CFO, D        02/01/96          06/10/96
Cheryl W. Grise         SVP, CAO           06/01/91           Note 1
Bruce D. Kenyon         P, D               09/03/96          09/03/96
Hugh C. MacKenzie       P, D               07/01/88          06/06/90
Michael G. Morris       CH, D              08/19/97          08/19/97
Lisa J. Thibdaue        VP                 01/01/98            n/a
Robert P. Wax           SVP, SEC, GC       08/01/92            n/a



PSNH.
                                            First             First
                         Positions         Elected           Elected
         Name              Held           an Officer        a Director

John C. Collins          D                   n/a            10/19/92
John H. Forsgren         EVP, CFO, D      02/01/96          08/05/96
William T. Frain, Jr.    P, COO, D        03/18/71          02/01/94
Bruce D. Kenyon          P, D             09/03/96          11/24/97
Gerald Letendre          D                   n/a            10/19/92
Hugh C. MacKenzie        D                   n/a            02/01/94
Michael G. Morris        CH, CEO, D       08/19/97          08/19/97
Jane E. Newman           D                   n/a            10/19/92
Lisa J. Thibdaue         VP               01/01/98            n/a
Robert P. Wax            SVP, SEC, GC     08/01/92            n/a


WMECO.
                                            First             First
                         Positions         Elected           Elected
         Name              Held           an Officer        a Director


Robert G. Abair          VP, CAO          09/06/88           Note 1
John H. Forsgren         EVP, CFO, D      02/01/96          06/10/96
Cheryl W. Grise          SVP              06/01/91           Note 1
Bruce D. Kenyon          P, D             09/03/96          09/03/96
Hugh C. MacKenzie        P, D             07/01/88          06/06/90
Michael G. Morris        CH, D            08/19/97          08/19/97
Lisa J. Thibdaue         VP               01/01/98            n/a
Robert P. Wax            SVP, SEC, AC, GC 08/01/92            n/a


NAEC.
                                             First            First
                         Positions          Elected          Elected
         Name              Held            an Officer       a Director

Ted C. Feigenbaum        EVP, CNO          10/21/91          Note 1
John H. Forsgren         EVP, CFO, D       02/01/96         11/01/97
Cheryl W. Grise          SVP, CAO          10/21/91          Note 1
Bruce D. Kenyon          P, CEO, D         09/03/96         09/03/96
Michael G. Morris        CH, D             08/19/97         08/19/97
Robert P. Wax            SVP, SEC, GC      08/01/92           n/a


Note 1 - resigned as a Director, effective 11/01/97.

Key:
AC   -  Assistant Clerk                     EVP  -  Executive Vice President
CAO   -  Chief Administrative Officer       GC   -  General Counsel
CEO   -  Chief Executive Officer            OTH  -  Executive Officer of NU
                                                    system
CFO   -  Chief Financial Officer            P    -  President
CH    -  Chairman                           SEC  -  Secretary
CHB   -  Chairman of the Board              SVP  -  Senior Vice President
COO   -  Chief Operating Officer            T    -  Trustee
D     -  Director                           VP   -  Vice President




          Name           Age  Business Experience During Past 5 Years


Robert G. Abair (1)     59    Vice President and Chief Administrative
                              Officer of WMECO since 1988.

John C. Collins (2)     52    Chief Executive Officer, The Hitchcock
                              Clinic, Dartmouth - Hitchcock Medical Center since
                              1977.

Ted C. Feigenbaum (3)   47    Executive Vice President and Chief Nuclear Officer
                              of NAEC since February, 1996; previously Senior
                              Vice President of NAEC since 1991; Senior Vice
                              President and Chief Nuclear Officer of PSNH June,
                              1992 to August, 1992; President and Chief
                              Executive Officer - New  Hampshire Yankee Division
                              of PSNH October, 1990 to June, 1992 and Chief
                              Nuclear Production Officer of PSNH January, 1990
                              to June, 1992.

John H. Forsgren (4)    51    Executive Vice President and Chief Financial
                              Officer of NU, CL&P, PSNH, WMECO and NAEC since
                              February, 1996; previously Managing Director of
                              Chase Manhattan Bank from 1995 to 1996 and Senior
                              Vice President-Chief Financial Officer of Euro
                              Disney, The Walt Disney Company from 1990 to 1995.

William T. Frain, Jr.(5) 56   President and Chief Operating Officer of PSNH
                              since February, 1994; previously Senior Vice
                              President of PSNH from 1992 to 1994.


Cheryl W. Grise          45   Senior Vice President and Chief
                              Administrative Officer of CL&P, PSNH and NAEC, and
                              Senior Vice President of WMECO since December,
                              1995; previously Senior Vice President-Human
                              Resources and Administrative Services of CL&P,
                              WMECO and NAEC from 1994 to 1995 and Vice
                              President-Human Resources of CL&P, WMECO and NAEC
                              from 1992 to 1994.

Bruce D. Kenyon (6)      55   President and Chief Executive Officer of NAEC
                              and President-Nuclear Group of NU, CL&P, PSNH and
                              WMECO since September, 1996; previously President
                              and Chief Operating Officer of South Carolina
                              Electric and Gas Company from 1990 to 1996.

Gerald Letendre          56   President, Diamond Casting & Machine Co.,
                              Inc. since 1972.
                                    
Hugh C. MacKenzie (7)    55   President-Retail Business Group of NU since
                              February, 1996 and President of CL&P and WMECO
                              since January, 1994; previously Senior Vice
                              President-Customer Service Operations of CL&P and
                              WMECO from 1990 to 1994.

Michael G. Morris (8)    51   Chairman of the Board, President and Chief
                              Executive Officer of NU, Chairman and Chief
                              Executive Officer of PSNH, and Chairman of CL&P,
                              NAEC and WMECO since August, 1997; previously
                              President and Chief Executive Officer of Consumers
                              Power Company from 1994 to 1997 and Executive Vice
                              President and Chief Operating Officer of Consumers
                              Power Company from 1992 to 1994.

Jane E. Newman (9)       52   Dean, Whittemore School of Business and
                              Economics of the University of New Hampshire since
                              January, 1998; previously Executive Vice President
                              and Director, Exeter Trust Company from 1995 to
                              1997 and President, Coastal Broadcasting
                              Corporation from 1992 to 1995.

Lisa J. Thibdaue         44   Vice President-Rates, Regulatory Affairs and
                              Compliance of CL&P, PSNH and WMECO since January,
                              1998; previously Executive Director, Rates and
                              Regulatory Affairs, Consumers Power  Company from
                              1996 to 1998 and Director of Regulatory Affairs,
                              Consumers Power Company from 1991 to 1996.

Robert P. Wax  (10)      49   Senior Vice President, Secretary and General
                              Counsel of NU, CL&P, PSNH, NAEC and WMECO since
                              February, 1997.  Previously Vice President,
                              Secretary and General Counsel of PSNH and NAEC
                              from 1994 to 1997; Vice President, Secretary and
                              General Counsel of NU and CL&P and Vice President,
                              Secretary, Assistant Clerk and General Counsel of
                              WMECO from 1993 to 1997; Vice President, Assistant
                              Secretary and General Counsel of PSNH and NAEC
                              from 1993 to 1994; and Vice President and General
                              Counsel-Regulatory of NU, CL&P, PSNH, WMECO and
                              NAEC from 1992 to 1993.

(1)  Member-Advisory Committee, BankBoston Springfield/Pioneer Valley.
(2)  Director of Fleet Bank - New Hampshire, Hamden Assurance Company Limited
     and the Business and Industry Association of New Hampshire.
(3)  Director of Connecticut Yankee Atomic Power Company, Maine Yankee Atomic
     Power Company, Vermont Yankee Nuclear Power Corporation, and Yankee Atomic
     Electric Company.
(4)  Director of Connecticut Yankee Atomic Power Company.
(5)  Director of the Business and Industry Association of New Hampshire and the
     Greater Manchester Chamber of Commerce; Trustee of Saint Anselm College.
(6)  Trustee of Columbia College and Director of Connecticut Yankee Atomic Power
     Company.
(7)  Director of Connecticut Yankee Atomic Power Company.
(8)  Director of Connecticut Yankee Atomic Power Company.
(9)  Director of Exeter Trust Company, Perini Corporation and Consumers Water
     Company.
(10) Director of New England Legal Foundation.

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


Item 11.  Executive Compensation

NU.

     Incorporated herein by reference is the information contained in the
sections "Executive Compensation", "Summary Compensation Table", "Option/SAR
Grants in Last Fiscal Year", "Pension Benefits", and "Report on Executive
Compensation" of the definitive proxy statement for solicitation of proxies by
NU, dated March 31, 1998, which will be filed with the Commission pursuant to
Rule 14a-6 under the Act.




CL&P, PSNH, WMECO and NAEC              SUMMARY COMPENSATION TABLE

      The following table presents the cash and non-cash compensation received
by the Chief Executive Officer and the next four highest paid executive officers
of CL&P, PSNH, WMECO and NAEC, and by a former Chief Executive Officer and one
former executive officer, in accordance with rules of the Securities and
Exchange Commission (SEC): The compensation reported for 1997 includes grants of
restricted stock units and stock appreciation rights under the Stock Price
Recovery Incentive Program, which for these officers took the place of
participation in short and long-term incentive programs under the Executive
Incentive Plan in 1996, 1997 and 1998, as discussed under "Report on Executive
Compensation" below. The "Securities Underlying Options/Stock Appreciation
Rights" column in the Summary Compensation table below lists the Northeast
Utilities common shares for which options and stock appreciation rights were
granted; the value of the options and stock appreciation rights as of the date
of grant is given in the last column of the "Option/SAR Grants in Last Fiscal
Year" table below.

<TABLE>

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

<S>                        <C>     <C>         <C>         <C>         <C>         <C>            <C>          <C>      
Michael G. Morris          1997    258,333     1,350,000      -           -        500,000           -            -
Chairman of the
Board, President           1996       -            -          -           -           -              -            -
and Chief Executive
Officer                    1995       -            -          -           -           -              -            -


Bruce D. Kenyon            1997    500,000       300,000      -        306,522     139,745           -            -
President -
Nuclear Group              1996    144,231       400,000      -        499,762        -              -            -

                           1995       -            -          -           -           -              -            -


John H. Forsgren           1997    350,000        50,000      -        378,787     184,382           -            -
Executive Vice
President and              1996    305,577         -       62,390       80,380        -              -            -
Chief Financial
Officer                    1995       -            -          -           -           -              -            -


Hugh C. MacKenzie          1997    270,000         -          -        189,778     142,549         26,998        4,800
President - Retail
Business Group             1996    264,904         -          -           -           -            19,834        7,500

                           1995    247,665       128,841      -           -           -            46,789        7,350



Robert P. Wax              1997    207,660         -          -        129,775      97,499          6,075        4,800
Senior Vice
President,                 1996    193,650         -          -           -          -              9,859        5,809
Secretary and
General Counsel            1995    183,427        96,225      -           -          -             17,147        5,503


Bernard M. Fox             1997    447,165         -          -           -        226,106         68,777      880,916
Retired Chairman of
the Board, President       1996    551,300         -          -           -          -             65,420        7,500
and Chief Executive
Officer                    1995    551,300       246,168      -           -          -            130,165        7,350


Ted C. Feigenbaum          1997    260,000         -          -           -          -             21,498        4,800
Executive Vice
President and              1996    248,858         -          -           -          -             14,770        7,222
Chief Nuclear
Officer of NAEC            1995    185,300         -          -           -          -               -           5,553

</TABLE>

<TABLE>
                                   Option/SAR Grants in Last Fiscal Year

                                         Individual Grants               Grant Date Value

<CAPTION>
Name                Number of      % of Total     Exercise   Expiration    Grant Date
                    Securities     Options/SARs     or          Date        Present
                    Underlying     Granted to     Base Price                Value($)
                    Options/SARS   Employees in    ($/sh)
                    Granted (#)    Fiscal Year
<S>                 <C>                 <C>       <C>       <C>          <C>                 

Michael G. Morris   500,000 (Note 4)    34.9%      9.625    8/20/2007    840,744 (Note 4)

Bruce D. Kenyon     41,236 (Note 5)      2.9%     13.125    12/31/2001    71,751 (Note 5)
                    98,509 (Note 6)      6.9%       9.75    12/31/2001    66,986 (Note 6)

John H. Forsgren    54,408 (Note 5)      3.8%     13.125    12/31/2001    94,670 (Note 5)
                    129,974 (Note 6)     9.1%       9.75    12/31/2001    88,382 (Note 6)

Hugh C. MacKenzie   42,063 (Note 5)      2.9%     13.125    12/31/2001    73,190 (Note 5)
                    100,486 (Note 6)     7.0%       9.75    12/31/2001    68,330 (Note 6)

Robert P. Wax       28,764 (Note 5)      2.0%     13.125    12/31/2001    50,049 (Note 5)
                    68,735 (Note 6)      4.8%       9.75    12/31/2001    46,740 (Note 6)

Bernard M. Fox      226,106 (Note 5)     15.8%    13.125    12/31/2001   393,424 (Note 5)

Ted C. Feigenbaum         -               N/A       N/A         N/A         N/A


</TABLE>

Notes to Summary Compensation and Option/SAR Grants Tables:


1.   Other annual compensation for Mr. Forsgren consists of tax payments on a
     restricted stock award.

2.   The aggregate restricted stock holdings by the seven individuals named in
     the table were, at December 31, 1997, 131,993 shares with a value of
     $1,559,169.  Awards shown for 1997 (except for additional awards made for
     Messrs. Kenyon and Forsgren - see below) were restricted stock unit grants
     under the Stock Price Recovery Incentive Program made on January 1, 1997.
     The number of units in each grant will be adjusted on December 31, 1998 to
     reflect the relative performance of Northeast Utilities common shares
     between December 31, 1996 and December 31, 1998 versus the performance of
     the Standard and Poor's Electric Company Index during the same period. The
     adjusted units will vest on January 4, 1999 if the recipient is still
     actively employed as a senior officer of the System (subject to earlier
     vesting upon death, disability or retirement). Mr. Kenyon also received
     12,200 restricted stock units on July 8, 1997, with a value at date of
     grant of $120,475, which will vest, as will the restricted shares granted
     to him in 1996, when Millstone Station is removed from the NRC's "watch
     list", provided that this occurs within three years of Mr. Kenyon's
     commencement of employment (September 3, 1996) and the Systematic
     Assessment of Licensee Performance and Institute of Nuclear Power
     Operations ratings of Seabrook Station have not materially changed from
     their 1996 levels, or, if earlier, when he is transferred to a new position
     within the System or with an affiliate, as defined. Mr. Forsgren also
     received 13,500 restricted stock units on July 8, 1997, with a value at
     grant of $133,313, which will vest, as will the restricted stock granted to
     him in 1996, on January 1, 1999.  Any dividends paid on restricted stock
     and units are reinvested into additional restricted stock and units,
     respectively, subject to the same vesting schedule.

3.   "All Other Compensation" consists of employer matching contributions under
     the Northeast Utilities Service Company 401(k) Plan, generally available to
     all eligible employees.  It also includes, in the case of Mr. Fox, who
     retired from the System in 1997, a payment of $166,667 as a contractor to
     the System in 1997, a payment of $82,000 which had been withheld from Mr.
     Fox's 1995 annual bonus, $389,866, which is the approximate value at the
     date of his retirement of that portion of Mr. Fox's retirement benefit in
     excess of what would be payable under the System's retirement plans, and a
     payment of $237,583 for payment of taxes on an annuity that provides a
     portion of such retirement benefit.  See Employment Contracts and
     Termination of Employment Arrangements, below.

4.   Mr. Morris received upon the commencement of his employment options to
     purchase 500,000 NU common shares at a price of $9.625 commencing August
     20, 1999 (250,000 shares), August 20, 2000 (125,000 shares) and August 20,
     2001 (125,000 shares).  The options expire August 20, 2007 or, if earlier,
     three years after termination of his employment.  Valued using the Black-
     Scholes option pricing model, with the following assumptions:  Volatility:
     31.89 percent (36 months of monthly data); Risk-free rate: 6.41 percent;
     Dividend yield: 7.42 percent (36 months of monthly data); Exercise price:
     $9.625; Grant price: $9.625; Option term: 10 years; Exercise date: August
     20, 2007.

5.   These SARs were granted on January 1, 1997 under the Stock Price Recovery
     Incentive Program.  The total number of SARs in this grant will be adjusted
     on December 31, 1998 to reflect the relative performance of NU common
     shares between December 31, 1996 and December 31, 1998 versus the
     performance of the Standard and Poor's Electric Companies Index during the
     same period.   This adjustment factor is assumed to be one for purposes of
     valuation for this table.  Valued using the Black-Scholes option pricing
     model, with the following assumptions:  Volatility: 25.63 percent (36
     months of monthly data); Risk-free rate: 6.17 percent, Dividend yield: 7.95
     percent (36 months of monthly data); Exercise date: December 31, 2001.

6.   These SARs were granted on August 12, 1997 under the Stock Price Recovery
     Incentive Program.  Their value may not exceed $3.375 per SAR, which is the
     value they would have if the price of a Northeast Utilities common share on
     the date of exercise were $13.125 or higher.  Valued using the Black-
     Scholes option pricing model, assuming that the value limitation described
     in the preceding sentence acts as a stock appreciation right written by the
     recipient of the actual SARs to the Company, with a base price equal to
     $13.125, but with other characteristics equivalent to the actual SARs, with
     the following assumptions:  Volatility:  31.89 percent (36 months of
     monthly data); Risk-free rate: 6.22 percent; Dividend yield: 7.42 percent
     (36 months of monthly data); Exercise date: December 31, 2001.


                        REPORT ON EXECUTIVE COMPENSATION

      The Compensation Committee of the Board of Trustees (the Committee) is the
administrator of executive compensation for the executives of the Northeast
Utilities system (the Company) with authority to establish and interpret the
terms of the Company's executive salary and incentive programs and to make
payment of awards.

      Compensation Strategy:  The Committee's executive compensation goals for
1997 were to continue to provide a competitive compensation package to enable
the Company to attract and retain key executives both during this critical
period and with an eye towards the future, and to further align executive
interests with those of Northeast Utilities' shareholders and with Company
performance.  The 1997 compensation of the Company's executives included base
salary and long-term incentive awards.  No annual incentive awards were paid in
1997.

      To achieve the compensation goal of providing a competitive package, the
Committee draws upon information from a variety of sources, including
compensation consultants, utility and general industry surveys, and other
publicly available information, including proxy statements.  In 1997, the
Company's comparison groups for purposes of executive compensation consisted of
a consultant's database of over 600 companies from a broad variety of
industries, a consultant's database of over 90 electric and combination electric
and gas utilities, and a smaller group of ten electric utilities whose operating
characteristics were substantially similar to those of the Company in terms of
generation mix, revenues and customer size.  Nine of the ten companies are
included in the Standard & Poor's (S&P) Electric Companies Index, which is the
index used in the "Share Performance Chart" shown in the NU Proxy Statement.

      Base Salary:  The target level for the base salary of each executive
reflects the median base salary level for that position within the market
comparison groups.  The Committee periodically adjusts the level of base salary
to reflect considerations such as changes in responsibility, market sensitivity,
individual performance and internal equity.  The Committee sets base salary
ranges for all executive officers and sets the annual base salary for each
executive officer except for the Chief Executive Officer (CEO), whose base
salary is set by the Board of Trustees following a recommendation by the
Committee.  During 1997, there were no changes in the base salary structure over
1996.  Because 1997 base salary levels were generally within targeted pay levels
of the comparison group, only one executive officer received a 1997 base salary
adjustment.

      Incentive Pay:  Consistent with its goal to recognize the importance of
retaining key executive talent and to help assure the officers' continuing
dedication to their duties to the Company and its shareholders, during 1997 the
Committee established for officers not participating in the Stock Price Recovery
Incentive Program, as described below, a one-year short-term incentive program
and a three-year long-term incentive program.  The programs calculate payouts
based on actual performance against target goals with respect to either total
shareholder return or Company division measures. Each measure has a threshold
performance level (below which no amount is awarded) and an upper limit (which
will yield the maximum payout of twice the target amount).  The performance
measures for the 1997 short-term incentive program were division-specific
functional and financial performance.  The corporate performance measure for the
1997-1999 long-term incentive program was total shareholder return over the
three-year period.  The total shareholder return goal will be met at target if
the total return on a Northeast Utilities common share for the performance
period exceeds the return on the S&P Electric Companies Index for the same
period by thirty-three percent.  Awards under the 1997 short-term program, if
any, are expected to be made in cash in the first quarter of 1998, and awards
under the 1997-1999 long-term program are expected to be made in Northeast
Utilities common shares in the first quarter of 2000.

      For 1997, target awards for participants in the short-term program ranged
from 25 percent to 30 percent, and for participants in the long-term program
from 15 percent to 25 percent of the going rate for their positions. Awards
under the short-term program can vary from those determined solely by corporate
performance, depending on individual achievement of a set of assigned goals
established for the performance year.  These assigned goals vary as appropriate
from officer to officer and include, among other things, employee safety;
service reliability; nuclear operations; economic development; operating,
maintenance and capital expenditure levels; environmental initiatives; and
generating unit capacity and availability.

      During 1996, the Committee determined that establishing a special Stock
Price Recovery Incentive Program for eight senior officers was in the best
interest of the Company and its shareholders.  The purpose of this program is to
focus key senior officers on achieving fundamental business goals relative to
the challenges of nuclear operations and industry restructuring, with a net
effect of advancing shareholder interests through share price recovery.  In
connection with the commencement of this incentive program, the Committee
terminated the participation of these officers in the 1996 short-term program
and the 1996-1998 long-term program and resolved that these officers would not
participate in the 1997 or 1998 short-term or the 1997-1999 and 1998-2000 long-
term incentive programs.  Awards under the Stock Price Recovery Incentive
Program will be based solely on appreciation of the price of Northeast Utilities
common shares between December 31, 1996 and December 31, 1998 against a targeted
share price goal, indexed to reflect the relative performance of a Northeast
Utilities common share compared to the performance of the S&P Electric Companies
Index during the same period.  The target award of each participant is equal to
the value of the 1996, 1997, and 1998 short-term and long-term incentive
programs at target, assuming that there had been no changes in the 1997 and 1998
program target payout opportunities for these executives. There are no
individual performance goals in the program. Awards under the program are made
in restricted stock units and stock appreciation rights (SARs).  The SARs
are exercisable from January 1, 1999 through December 31, 2001.  During 1997,
the Committee granted additional SARs to the participants in the Stock Price
Recovery Incentive Program as a further retention device.

      Also during 1997, the Committee made awards under the 1994-1996 long-term
incentive program.  Awards, in Northeast Utilities common shares, were based on
the Company's relative ranking against a group of electric utilities with
respect to shareholder return and cost of service (COS).  Achievement of goals
was less than target and resulted in awards that were 60.5 percent of target.

      CEO Pay:  The Committee did not increase Mr. Fox's base salary in 1997
because of Company performance.  During 1997, Mr. Fox announced his intention to
take early retirement from the Company.  Mr. Fox retired on September 1, 1997.
The terms of Mr. Fox's retirement arrangements are described below.   Following
an executive search, the Company hired Mr. Morris as its Chairman of the Board,
President and Chief Executive Officer, effective August 19, 1997.  Mr. Morris's
base salary was set at $750,000, which was determined to be market competitive.
The Company paid Mr. Morris a sign-on bonus of $1.35 million, reflecting in
large part his loss of stock options from his previous employer.

      CEO Long-Term Incentive Programs:  During 1997, Mr. Fox was awarded 8,465
Northeast Utilities common shares in conformance with the provisions of the
1994-1996 long-term incentive program whose payouts were based on the Company's
performance under COS and shareholder return measures as described above.  Mr.
Morris received, upon his employment with the Company, nonqualified stock
options to purchase 500,000 NU common shares at $9.625 per share, expiring in
2007, which become exercisable in 1999 (50 percent), 2000 (25 percent), and 2001
(25 percent).

      New Compensation Plans:  During 1997, the Committee met with its
compensation consultants to begin the process of restructuring compensation
plans to more closely align them with the changing electric utility
industry.  The new Incentive Plan was approved by the Board in January, 1998,
subject to shareholder and SEC approval.  This plan is further described [under
"Approval of Incentive Plan" in the NU proxy statement].  The Board has approved
two other new compensation plans.  The first is a Deferred Compensation Plan
under the terms of which all officers and certain other key employees of the
Company may defer all or some portion of their compensation and, to the extent
they are prevented by federal tax rules from taking full advantage of the
Company's 401(k) Plan, receive a matching contribution (which is also deferred 
and will be payable on distribution in the form of Northeast Utilities common
shares) in an amount equal to the employer matching contribution forgone under
the 401(k) Plan because of the application of the federal tax rules.  The second
is an Employee Share Purchase Plan, also subject to shareholder and SEC
approval, under which the Company may make available to eligible employees the
opportunity to purchase Northeast Utilities common shares at a discount from
time to time.  The Employee Share Purchase Plan is further described [under
"Approval of Employee Share Purchase Plan" in the Northeast Utilities proxy
statement].  The Committee believes that these new plans serve the best
interests of shareholders by further aligning employees' interests with those of
shareholders.

      The Committee intends that the new Incentive Plan will adequately respond
to issues raised by the deductibility cap placed on executive salaries by
Section 162(m) of the Internal Revenue Code because of its use of stock options
and qualified performance-based compensation as described [under "Approval of
Incentive Plan in the NU proxy statement"].  The Committee believes that the
Company's executive compensation programs continue to appropriately balance
shareholder and customer interests.


Respectfully submitted,

Robert E. Patricelli, Chairman
William J. Pape II, Vice Chairman
Cotton Mather Cleveland
John F. Curley
Elizabeth T. Kennan


Dated: January 13, 1998


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

      Each of the executive officers of NU named in the Summary Compensation
Table above is currently eligible for a target benefit, except Messrs. Morris
and Kenyon, whose Employment Agreements provide specially calculated retirement 
benefits, based on their previous arrangements with CMS Energy/Consumers Energy 
Company (CMS) and South Carolina Electric and Gas, respectively.  Mr. Morris's 
agreement provides that upon retirement after reaching the fifth anniversary of
his employment date with the System (or upon disability or termination without 
cause or following a change in control, as defined, of NU) he will be entitled 
to receive a special retirement benefit calculated by applying the benefit 
formula of the CMS Supplemental Executive Retirement Plan to all compensation
earned from the System and to all service rendered to the System and CMS.  If
Mr. Kenyon retires with at least three years but less than five years of 
service with the System, he will be deemed to have five years of service.  
In addition, if Mr. Kenyon retires with at least three years of service with
the System, he will receive a lump sum payment of $500,000.

      The benefits presented below are based on a straight life annuity
beginning at age 65 and do not take into account any reduction for joint and
survivorship annuity payments.

                            ANNUAL TARGET BENEFIT

Final Average             Years of Credited Service
Compensation

                   15          20           25             30           35

 $200,000       $72,000      $96,000     $120,000       $120,000     $120,000
  250,000        90,000      120,000      150,000        150,000      150,000
  300,000       108,000      144,000      180,000        180,000      180,000
  350,000       126,000      168,000      210,000        210,000      210,000
  400,000       144,000      192,000      240,000        240,000      240,000
  450,000       162,000      216,000      270,000        270,000      270,000
  500,000       180,000      240,000      300,000        300,000      300,000
  600,000       216,000      288,000      360,000        360,000      360,000
  700,000       252,000      336,000      420,000        420,000      420,000
  800,000       288,000      384,000      480,000        480,000      480,000
  900,000       324,000      432,000      540,000        540,000      540,000
1,000,000       360,000      480,000      600,000        600,000      600,000
1,100,000       396,000      528,000      660,000        660,000      660,000
1,200,000       432,000      576,000      720,000        720,000      720,000


      Final average compensation for purposes of calculating the target benefit
is the highest average annual compensation of the participant during any 36
consecutive months compensation was earned.  Compensation taken into account
under the target benefit described above includes salary, bonus, restricted
stock awards, and long-term incentive payouts shown in the Summary Compensation
Table, but does not include employer matching contributions under the 401k Plan.
In the event that an officer's employment terminates because of disability, the
retirement benefits shown above would be offset by the amount of any disability
benefits payable to the recipient that are attributable to contributions made by
NU and its subsidiaries under long term disability plans and policies.

      As of December 31, 1997, the five current executive officers named in the
Summary Compensation Table had the following years of credited service for
purposes of calculating target benefits under the Supplemental Plan (or in the
case of Messrs. Morris and Kenyon, for purposes of calculating the special
retirement benefits under their respective Employment Agreements):  Mr. Morris -
9, Mr. Kenyon - 1, Mr. Forsgren - 1, Mr. MacKenzie - 32, and Mr. Wax - 18.
Assuming that retirement were to occur at age 65 for these officers, retirement
would occur with 23, 11, 15, 41 and 34 years of credited service, respectively.


EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS

Officer Agreements

     NUSCO (or, in the case of Mr. Morris, NU) has entered into employment
agreements (the Officer Agreements) with each of the named executive officers
and certain other executive officers and subsidiary directors. The Officer
Agreements are also binding on NU and on each majority-owned subsidiary of NU.

     Each Officer Agreement obligates the officer to perform such duties as may
be directed by the NUSCO Board of Directors or the NU Board of Trustees, protect
the System's confidential information, and refrain, while employed by the System
and for a period of time thereafter, from competing with the System in a
specified geographic area.  Each Officer Agreement provides that the officer's
base salary will not be reduced below certain levels without the consent of the
officer, that the officer will participate in specified benefits under the
Supplemental Executive Retirement Plan or other supplemental retirement programs
(see Pension Benefits, above), in applicable executive incentive programs (see
Report on Executive Compensation, above), and, beginning on January 1, 1999
(January 1, 1998 for Mr. Morris's participation in short-term programs), if the
employment term has not ended, in each short-term and long-term incentive
compensation program established by the System for such executives generally, at
an incentive opportunity level not less than that in effect for the officer as
of January 1, 1996 (or January 1, 1997 for certain officers, and, for Mr.
Morris, with minimum short-term and long-term target levels of 80 percent and 60
percent, respectively, of base salary and maximum opportunities of 130 percent
and 120 percent, respectively, of base salary).

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

     Under the terms of an Officer Agreement, upon any termination of employment
of the officer within two years following a change of control, as defined, if
the officer signs a release of all claims against the Company the officer will
be entitled to certain payments including two or three times annual base salary
(or in the case of Mr. Morris, if greater, the product of annual base salary
times one less than the number of years remaining in the initial five-year term
of his employment agreement), annual incentive payments, specified employee
welfare and pension benefits, and vesting of stock appreciation rights, options
and restricted stock.  Certain of the change of control provisions may be
modified by the Board of Trustees prior to a change of control, on at least two
years' notice to the affected officer(s).

     Besides the terms described above, Mr. Forsgren's Officer Agreement
provides for a starting salary of $350,000 per year and a $100,000 restricted
stock grant.  Mr. Kenyon's Officer Agreement provides for an initial starting
salary at $500,000 per year, a $500,000 restricted stock grant and a $400,000
cash signing bonus.  Mr. Kenyon's Officer Agreement also provides for a special
retirement benefit and a special short term incentive compensation program in
lieu of a portion of the Stock Price Recovery Incentive Program.  Under this
incentive program Mr. Kenyon will be eligible to receive a payment up to 100
percent of base salary depending on his fulfillment of certain incentive goals
for each of the years ending August 31, 1997 and August 31, 1998, and for the 16
month period ending December 31, 1999.  Mr. Kenyon received a payment of
$300,000, or 60 percent of his base salary, under this program during 1997.  Mr.
Morris's Officer Agreement provides for an initial five-year term base salary of
$750,000 per year subject to annual review, a $1,350,000 cash signing bonus, a
grant of stock options, and a special retirement benefit.  See Summary
Compensation Table and Pension Benefits, above, for further description of these
provisions.

Retention Bonuses

     During July, 1997, the Compensation Committee agreed to pay Messrs.
Forsgren and MacKenzie cash retention bonuses of $100,000 each, payable in July,
1998 and December, 1998, respectively.


Transition and Retirement Agreement

     In February, 1997, NU entered into a Transition and Retirement Agreement
(the Transition Agreement) with Mr. Fox, and Mr. Fox subsequently retired on
September 1, 1997.  The Transition Agreement obligates Mr. Fox to maintain the
confidentiality of System information during his employment and following
his retirement, and not to compete with the System for certain periods of time
in specified geographic areas.

     The Transition Agreement provides that Mr. Fox will be engaged as a
consultant to the Board of Trustees for 24 months following his retirement, with
a fee of $500,000 for the first 12 months and $300,000 for the second 12 months,
payable in full notwithstanding Mr. Fox's death or disability during such period
or the occurrence of a change of control, as defined.  The Transition Agreement
also provides that Mr. Fox will be entitled to a target benefit under the
Supplemental Executive Retirement Plan (actuarially reduced to reflect payments
beginning prior to age 57), and for vesting of all stock appreciation rights
granted to him in the Stock Price Recovery Incentive Program.  Further, Mr. Fox
signed a release of claims against the System "and all related parties" with
respect to matters arising out of his employment with the System, and the System
released Mr. Fox from all civil liability which may arise from his being or
having been a Trustee or officer of NU and its subsidiaries, except for any
liability which has been or may be asserted against Mr. Fox by the System as the
result of an investigation conducted upon the demand of a shareholder or by a
shareholder on behalf of the System.  The Transition Agreement is binding on
each active majority-owned subsidiary of NU.

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


Item 12.  Security Ownership of Certain Beneficial Owners and Management

NU.

     Incorporated herein by reference is the information contained in the
sections "Common Stock Ownership of Certain Beneficial Owners", "Common Stock
Ownership of Management", "Compensation of Trustees", "Executive Compensation",
"Pension Benefits", and "Report on Executive Compensation" of the definitive
proxy statement for solicitation of proxies by NU, dated March 31, 1998 which
will be filed with the Commission pursuant to Rule 14a-6 under the Act.




CL&P, PSNH, WMECO and NAEC.

     NU owns 100% of the outstanding common stock of registrants CL&P, PSNH,
WMECO and NAEC.  As of February 24, 1998, the Directors and Executive Officers
of CL&P, PSNH, WMECO and NAEC beneficially owned the number of shares of each
class of equity securities of NU listed below.  No equity securities of CL&P,
PSNH, WMECO or NAEC are owned by the Directors and Executive Officers of CL&P,
PSNH, WMECO and NAEC.

          CL&P, PSNH, WMECO, and NAEC DIRECTORS AND EXECUTIVE OFFICERS


Title of                                              Restricted   Percent
Class                           Directly  Restricted    Stock        of
               Name              Owned(1)  Stock (2)   Units(3)   Class(4)

NU Common   John C. Collins(5)         0
NU Common   Ted C. Feigenbaum (6)  3,558
NU Common   John H. Forsgren(7)        0       5,577     32,816
NU Common   Bruce D. Kenyon(8)     3,373      41,615     26,840
NU Common   Gerald Letendre(5)         0
NU Common   Hugh C. MacKenzie(9)  12,573                 14,933
NU Common   Michael G. Morris(10)  1,000
NU Common   Jane E. Newman(5)          0
NU Common   Robert P. Wax(11)      4,746                 10,212

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

                                   Directly  Restricted       Restricted Stock
Company       Number of Persons     Owned(1)    Stock(2)         Units (3)

CL&P                 7              27,958        47,192         94,173
PSNH                10              27,958        47,192         84,801
WMECO                7              27,958        47,192         94,173
NAEC                 7              18,944        47,192         79,240

(1)     Unless otherwise noted, each Director and Executive Officer of CL&P,
        PSNH, WMECO and NAEC has sole voting and investment power with respect
        to the listed shares.

(2)     The beneficial owner has the right to vote but no right to dispose of
        restricted stock until the restrictions have lapsed.

(3)     The beneficial owner has no right to vote or dispose of restricted
        stock units until the restrictions have lapsed.

(4)     As of February 24, 1998 there were 136,857,443 common shares of NU
        outstanding.  The percentage of such shares beneficially owned by any
        Director or Executive Officer, and by all Directors and Executive
        Officers of CL&P, PSNH, WMECO and NAEC as a group, does not exceed one
        percent.

(5)     Messrs. Collins, Letendre and Ms. Newman are Directors of PSNH.

(6)     Mr. Feigenbaum is a former Director and Executive Officer of NAEC.

(7)     Mr. Forsgren is a Director and Executive Officer of CL&P, WMECO, PSNH
        and NAEC.

(8)     Mr. Kenyon is a Director and Executive Officer of CL&P, PSNH, NAEC and
        WMECO.

(9)     Mr. MacKenzie is a Director of CL&P, PSNH and WMECO and an Executive
        Officer of CL&P and WMECO. Mr. MacKenzie shares voting and investment
        power with his wife for 1,584 of these shares.

(10)    Mr. Morris is a Director and Executive Officer of CL&P, PSNH, WMECO and
        NAEC.  Mr. Morris shares voting and investment power with his wife for
        these shares.

(11)    Mr. Wax is an Executive Officer of CL&P, PSNH, WMECO and NAEC.


Item 13.  Certain Relationships and Related Transactions

NU.

     Incorporated herein by reference is the information contained in the
section "Certain Relationships and Related Transactions" of the definitive proxy
statement for solicitation of proxies by NU's Board of Trustees, dated March 31,
1998, which will be filed with the Commission pursuant to Rule 14a-6 under the
Act.

CL&P, PSNH, WMECO and NAEC.

     No relationships or transactions that would be described in response to
this item exist now or existed during 1997 with respect to CL&P, PSNH, WMECO and
NAEC.


Item 14.  Exhibits, Financial Statement Schedules and Reports on
          Form 8-K.

(a)  1.   Financial Statements:

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

          Report of Independent Public Accountants
          on Schedules                                                      S-1

          Consent of Independent Public Accountants                         S-3

       2. Schedules:

          Financial Statement Schedules for NU (Parent),
          NU and Subsidiaries, CL&P and Subsidiaries,
          PSNH and WMECO and Subsidiary are listed in
          the Index to Financial Statements Schedules                       S-4

       3. Exhibits Index                                                    E-1

(b)       Reports on Form 8-K:

          NU, CL&P, PSNH, WMECO and NAEC filed Form 8-Ks dated November 24,
          1997 with the SEC on November 26, 1997.  This 8-K filing disclosed
          that:

          .  New Hampshire Electric Cooperative, Inc., made an unsolicited offer
             to purchase PSNH's transmission and distribution facilities, as
             well as PSNH's claims for recovery of stranded costs for $1.4
             billion.

          .  Neil S. Carns had resigned as a Senior Vice President and Chief
             Nuclear Officer - Millstone.

          NU, CL&P, WMECO, PSNH and NAEC filed Form 8-Ks dated November 25,
          1997 with the SEC on December 23, 1997.  This filing disclosed that:

          .  A U.S. District Court judge orally approved the $25 million
             settlement of seven derivative lawsuits and one demand letter
             filed by shareholders of NU related to alleged mismanagement at
             Millstone.  Under the approved settlement, NU would receive the
             $25 million, less attorneys' fees which had yet to be determined,
             from insurers of certain of NU's present and former officers and
             trustees.

          .  The DPUC issued a draft decision regarding its review of CL&P's
             rates.  The draft decision requires CL&P to remove Millstone 1
             from rate base early in 1998, pending its return to service.

          .  On November 25, 1997, Massachusetts enacted a comprehensive
             electric utility industry restructuring bill calling for a ten
             percent reduction of rates and choice of retail electric supplier
             on March 1, 1998.  It additionally calls for a further five
             percent rate reduction, adjusted for inflation, by September 1,
             1999.

          .  On December 17, 1997, Moody's Investors Service downgraded the
             senior secured debt of CL&P, WMECO and NU, as well as the
             preferred stock of CL&P and WMECO.  All NU system securities
             remain under review for further downgrade.

          .  On December 10, 1997, the NRC issued Millstone a notice of
             violation and proposed imposition of civil penalties in the amount
             of $2.1 million for past violations of NRC requirements.

          .  On December 1, 1997, the NHPUC issued the FPPAC rate to be
             collected by PSNH for the period December 1, 1997 through May 31,
             1998, increasing customer bills by approximately six percent.

          NU, CL&P and WMECO filed Form 8-Ks dated December 31, 1997 with the
          SEC on January 27, 1998.  This filing disclosed:

          .  NU consolidated's 1997 earnings.

          .  The current status of the DPUC's review of CL&P's rates.

          .  The DPUC ordered CL&P to file a full rate case and will schedule
             hearings to determine the status of Millstone 3 and Millstone 2.

          .  WMECO filed its restructuring plan with the DTE on December 31,
             1997.


                              NORTHEAST UTILITIES

                                   SIGNATURES

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

                                   NORTHEAST UTILITIES

                                       (Registrant)



Date:  March 6, 1998                    By /s/ Michael G. Morris
                                               Michael G. Morris
                                               Chairman of the Board
                                               and President and
                                               Chief Executive Officer


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



Date                      Title                          Signature

March 6, 1998             Chairman of the Board,         /s/ Michael G. Morris
                          President and                      Michael G. Morris
                          Chief Executive Officer
                          and a Trustee



March 6, 1998             Executive Vice                 /s/ John H. Forsgren
                          President and                      John H. Forsgren  
                          Chief Financial Officer



March 6, 1998             Vice President and             /s/ John J. Roman
                          Controller                         John J. Roman


                              NORTHEAST UTILITIES
                              SIGNATURES (CONT'D)



Date                      Title                    Signature

March 6, 1998             Trustee                  /s/ Cotton M. Cleveland
                                                       Cotton M. Cleveland


March 6, 1998             Trustee                  /s/ William F. Conway
                                                       William F. Conway

March 6, 1998             Trustee

                                                       John F. Curley


March 6, 1998             Trustee                  /s/ E. Gail de Planque
                                                       E. Gail de Planque


March 6, 1998             Trustee                  /s/ Elizabeth T. Kennan
                                                       Elizabeth T. Kennan


March 6, 1998             Trustee                  /s/ William J. Pape II
                                                       William J. Pape II

March 6, 1998             Trustee                  /s/ Robert E. Patricelli
                                                       Robert E. Patricelli


March 6, 1998             Trustee                  /s/ John F. Swope
                                                       John F. Swope


March 6, 1998             Trustee                  /s/ John F. Turner
                                                       John F. Turner


                    THE CONNECTICUT LIGHT AND POWER COMPANY

                                   SIGNATURES


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


                                   THE CONNECTICUT LIGHT AND POWER COMPANY

                                             (Registrant)


Date:  March 6, 1998                 By /s/ Michael G. Morris
                                            Michael G. Morris
                                            Chairman


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

Date                       Title                   Signature



March 6, 1998              Chairman and            /s/ Michael G. Morris
                           a Director                  Michael G. Morris


March 6, 1998              President and           /s/ Hugh C. MacKenzie
                           a Director                  Hugh C. MacKenzie


March 6, 1998              Executive Vice          /s/ John H. Forsgren
                           President and               John H. Forsgren
                           Chief Financial
                           Officer and a
                           Director


March 6, 1998              Vice President          /s/ John J. Roman
                           and Controller              John J. Roman


March 6, 1998              Director                /s/ Bruce D. Kenyon
                                                       Bruce D. Kenyon


                    PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

                                   SIGNATURES


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

                              PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

                                           (Registrant)


Date:  March 6, 1998          By /s/ Michael G. Morris

                                     Michael G. Morris
                                     Chairman and
                                     Chief Executive Officer


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


Date                    Title                     Signature



March 6, 1998           Chairman and Chief        /s/ Michael G. Morris
                        Executive Officer             Michael G. Morris
                        and a Director


March 6, 1998           President and             /s/ William T. Frain, Jr.
                        Chief Operating               William T. Frain, Jr.
                        Officer and
                        a Director


March 6, 1998           Executive Vice            /s/ John H. Forsgren
                        President and                 John H. Forsgren
                        Chief Financial
                        Officer and a
                        Director


March 6, 1998           Vice President            /s/ John J. Roman
                        and Controller                John J. Roman





                    PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

                              SIGNATURES (CONT'D)


Date                       Title                   Signature

                                  

March 6, 1998              Director                /s/ John C. Collins
                                                       John C. Collins


March 6, 1998              Director                /s/ Bruce D. Kenyon
                                                       Bruce D. Kenyon


March 6, 1998              Director                /s/ Gerald Letendre
                                                       Gerald Letendre


March 6, 1998              Director                /s/ Hugh C. MacKenzie
                                                       Hugh C. MacKenzie


March 6, 1998              Director                /s/ Jane E. Newman
                                                       Jane E. Newman



                     WESTERN MASSACHUSETTS ELECTRIC COMPANY

                                   SIGNATURES


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

                              WESTERN MASSACHUSETTS ELECTRIC COMPANY

                                           (Registrant)



Date:  March 6, 1998               By /s/ Michael G. Morris
                                          Michael G. Morris
                                          Chairman


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



Date                      Title                    Signature



March 6, 1998             Chairman and             /s/ Michael G. Morris
                          a Director                   Michael G. Morris


March 6, 1998             President and            /s/ Hugh C. MacKenzie
                          a Director                   Hugh C. MacKenzie


March 6, 1998             Executive Vice           /s/ John H. Forsgren
                          President and                John H. Forsgren
                          Chief Financial
                          Officer and a
                          Director


March 6, 1998             Vice President           /s/ John J. Roman
                          and Controller               John J. Roman


March 6, 1998             Director                 /s/ Bruce D. Kenyon
                                                       Bruce D. Kenyon



                       NORTH ATLANTIC ENERGY CORPORATION

                                   SIGNATURES




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


                                   NORTH ATLANTIC ENERGY CORPORATION

                                         (Registrant)

Date: March 6, 1998                  By /s/ Michael G. Morris
                                            Michael G. Morris
                                            Chairman


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

Date                      Title                   Signature




March 6, 1998             Chairman and            /s/ Michael G. Morris
                          a Director                  Michael G. Morris



March 6, 1998             President and           /s/ Bruce D. Kenyon
                          Chief Executive             Bruce D. Kenyon
                          Officer and
                          a Director



March 6, 1998             Executive Vice          /s/ John H. Forsgren
                          President and               John H. Forsgren
                          Chief Financial
                          Officer and a
                          Director



March 6, 1998             Vice President          /s/ John J. Roman
                          and Controller              John J. Roman


             REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES



We have audited in accordance with generally accepted auditing standards, the
financial statements included in Northeast Utilities' annual report to 
shareholders and The Connecticut Light and Power Company's and 
Western Massachusetts Electric Company's annual reports, incorporated by 
reference in this Form 10-K, and have issued our reports thereon dated 
February 20, 1998.  Our audit was made for the purpose of forming an
opinion on the basic financial statements taken as a whole.  The schedules
listed in the accompanying Index to Financial Statements Schedules are the
responsibility of the companies' management and are presented for purposes of
complying with the Securities and Exchange Commission's rules and are not part
of the basic financial statements.  These schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.



                                   /s/ ARTHUR ANDERSEN LLP
                                       ARTHUR ANDERSEN LLP
 



Hartford, Connecticut
February 20, 1998

             REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES


We have audited in accordance with generally accepted auditing standards, the
financial statements included in North Atlantic Energy Corporation's and Public
Service Company of New Hampshire's annual reports to shareholders, incorporated
by reference in this Form 10-K and have issued our reports thereon dated
February 20, 1998.  Our reports included an explanatory paragraph regarding the
existence of conditions which raise substantial doubt about the companies'
abilities to continue as going concerns.  Our audit was made for the purpose of
forming an opinion on the basic financial statements taken as a whole.  The
schedules listed in the accompanying Index to Financial Statements Schedules are
the responsibility of the companies' management and are presented for purposes
of complying with the Securities and Exchange Commission's rules and are not
part of the basic financial statements. These schedules have been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.



                                   /s/ ARTHUR ANDERSEN LLP
                                       ARTHUR ANDERSEN LLP



Hartford, Connecticut
February 20, 1998



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS




As independent public accountants, we hereby consent to the incorporation of our
reports included (or incorporated by reference) in this Form 10-K, into the
Company's previously filed Registration Statements No. 33-55279 of The
Connecticut Light and Power Company, No. 33-56537 of CL&P Capital, LP and No.
33-34622, No. 33-44814, No. 33-63023, and No. 33-40156 of Northeast Utilities.



                                 /s/ ARTHUR ANDERSEN LLP
                                     ARTHUR ANDERSEN LLP



Hartford, Connecticut
March 6, 1998



INDEX TO FINANCIAL STATEMENTS SCHEDULES

Schedule

I.    Financial Information of Registrant:
        Northeast Utilities (Parent) Balance
        Sheets 1997 and 1996                                           S-5

        Northeast Utilities (Parent) Statements
        of Income 1997, 1996, and 1995                                 S-6

        Northeast Utilities (Parent) Statements
        of Cash Flows 1997, 1996, and 1995                             S-7

II.   Valuation and Qualifying Accounts and Reserves
      1997, 1996, and 1995:                                       
        Northeast Utilities and Subsidiaries                        S-8 - S-10
        The Connecticut Light and Power Company
          and Subsidiaries                                         S-11 - S-13
        Public Service Company of New Hampshire                    S-14 - S-16
        Western Massachusetts Electric Company
          and Subsidiary                                           S-17 - S-19


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




                                     SCHEDULE I
                            NORTHEAST UTILITIES (PARENT)

                        FINANCIAL INFORMATION OF REGISTRANT

                                  BALANCE SHEETS  

                           AT DECEMBER  31, 1997 AND 1996

                               (Thousands of Dollars)

<TABLE>
<CAPTION>

                                                              1997           1996
                                                           ----------     ----------

<S>                                                        <C>            <C>
ASSETS
------
Other Property and Investments:
  Investments in subsidiary companies, at
   equity...............................................  $2,271,902     $2,506,254
  Investments in transmission companies, at equity......      19,635         21,186
  Other, at cost........................................         402            413
                                                          -----------    -----------
                                                           2,291,939      2,527,853
                                                          -----------    -----------
Current Assets:                                         
  Cash..................................................          10             10
  Notes receivable from affiliated companies............      34,200          5,475
  Notes and accounts receivable.........................         711            813
  Receivables from affiliated companies.................         961          7,106
  Prepayments...........................................         265            224
                                                          -----------    -----------
                                                              36,147         13,628
                                                          -----------    -----------
Deferred Charges:                                       
  Accumulated deferred income taxes.....................       5,692          5,293
  Unamortized debt expense..............................         232            524
  Other.................................................          47             46
                                                          -----------    -----------
                                                               5,971          5,863
                                                          -----------    -----------
       Total Assets.....................................  $2,334,057     $2,547,344
                                                          ===========    ===========

CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
  Common Shareholders' Equity:
    Common shares, $5 par value--Authorized
    225,000,000 shares; 136,842,170 shares issued and
    130,182,736 shares outstanding in 1997 and
    136,051,938 shares issued and                       
    128,444,373 outstanding in 1996.....................  $  684,211     $  680,260
  Capital surplus, paid in..............................     932,493        940,446
  Deferred benefit plan--employee stock ownership plan..    (154,141)      (176,091)
  Retained earnings.....................................     664,678        832,520
                                                          -----------    -----------
    Total common shareholders' equity...................   2,127,241      2,277,135
  Long-term debt........................................     177,000        194,000
                                                          -----------    -----------
    Total capitalization................................   2,304,241      2,471,135
                                                          -----------    -----------
Current Liabilities:                                    
  Notes payable to banks................................        -            38,750
  Long-term debt and preferred stock--current portion...      17,000         16,000
  Accounts payable......................................       1,857         15,504
  Accounts payable to affiliated companies..............         216            600
  Accrued taxes.........................................       7,860          2,158
  Accrued interest......................................       2,343          2,602
  Dividend reinvestment plan............................          90           -
  Other.................................................        -                 2
                                                          -----------    -----------
                                                              29,366         75,616
                                                          -----------    -----------
Other Deferred Credits..................................         450            593
                                                          -----------    -----------
    Total Capitalization and Liabilities                  $2,334,057     $2,547,344
                                                          ===========    ===========
</TABLE>
                                             S-5



                                      SCHEDULE I
                             NORTHEAST UTILITIES (PARENT)

                         FINANCIAL INFORMATION OF REGISTRANT

                                STATEMENTS OF INCOME 

                    YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995

                   (Thousands of Dollars Except Share Information)

<TABLE>
<CAPTION>
                                       1997           1996           1995
                                  -------------  -------------  -------------

<S>                                <C>            <C>            <C>
Operating Revenues............... $       -      $       -      $       -
                                  -------------  -------------  -------------
Operating Expenses:              
  Other..........................        8,657          8,920         14,267
  Federal income taxes...........      (10,697)       (10,390)        (8,585)
                                  -------------  -------------  -------------
   Total operating expenses......       (2,040)        (1,470)         5,682
                                  -------------  -------------  -------------
Operating Income (Loss)..........        2,040          1,470         (5,682)
                                  -------------  -------------  -------------
Other Income:                    
  Equity in earnings of          
   subsidiaries..................     (123,941)        18,272        310,025
  Equity in earnings of          
   transmission companies........        2,968          3,306          3,561
  Other, net.....................        2,184            368            329
                                  -------------  -------------  -------------
    Other income, net............     (118,789)        21,946        313,915
                                  -------------  -------------  -------------
    Income before interest       
     charges.....................     (116,749)        23,416        308,233
                                  -------------  -------------  -------------
Interest Charges ................       18,959         21,585         25,799
                                  -------------  -------------  -------------
Earnings for Common Shares ...... $   (135,708)  $      1,831   $    282,434
                                  =============  =============  =============

Earnings Per Common Share........ $      (1.05)  $       0.01   $       2.24
                                  =============  =============  =============
Common Shares Outstanding        
 (average).......................  129,567,708    127,960,382    126,083,645
                                  =============  =============  =============








</TABLE>





                                                SCHEDULE I
                                       NORTHEAST UTILITIES (PARENT)
                                   FINANCIAL INFORMATION OF REGISTRANT
                                         STATEMENT OF CASH FLOWS
                                YEARS ENDED DECEMBER 31, 1997, 1996, 1995
                                         (Thousands of Dollars)

<TABLE>
<CAPTION>

                                                               1997          1996           1995
                                                           ------------ -------------- --------------
<S>                                                           <C>            <C>            <C>
Operating Activities:
  Net (loss) income                                        $  (135,708) $       1,831  $     282,434
  Adjustments to reconcile to net cash
   from operating activities:
    Equity in earnings of subsidiary companies                 123,941        (18,272)      (310,025)
    Cash dividends received from subsidiary companies          132,994        247,101        272,350
    Deferred income taxes                                        1,558          3,868            772
    Other sources of cash                                       11,738         17,961          6,916
    Other uses of cash                                          (2,101)        (3,065)          (528)
    Changes in working capital:
      Receivables                                                6,247         (7,312)         1,991
      Accounts payable                                         (14,031)        (3,183)        15,381
      Other working capital (excludes cash)                      5,490        (13,724)         7,396
                                                           ------------ -------------- --------------
Net cash flows from operating activities                       130,128        225,205        276,687
                                                           ------------ -------------- --------------

Financing Activities:
  Issuance of common shares                                      6,502         10,622         47,218
  Net decrease in short-term debt                              (38,750)       (18,750)       (46,500)
  Reacquisitions and retirements of long-term debt             (16,000)       (14,000)       (12,000)
  Cash dividends on common shares                              (32,134)      (176,276)      (221,701)
                                                           ------------ -------------- --------------
Net cash flows used for financing activities                   (80,382)      (198,404)      (232,983)
                                                           ------------ -------------- --------------

Investment Activities:
  NU System Money Pool                                         (28,725)         4,200         (7,700)
  Investment in subsidiaries                                   (22,583)       (33,217)       (38,963)
  Other investment activities, net                               1,562          2,208          2,935
                                                           ------------ -------------- --------------
Net cash flows used for investments                            (49,746)       (26,809)       (43,728)
                                                           ------------ -------------- --------------
Net decrease in cash for the period                                  0             (8)           (24)
Cash - beginning of period                                          10             18             42
                                                           ------------ -------------- --------------
Cash - end of period                                       $        10  $          10  $          18
                                                           ============ ============== ==============

Supplemental Cash Flow Information
Cash paid during the year for:
  Interest, net of amounts capitalized                     $    18,960  $      21,770  $      26,430
                                                           ============ ============== ==============
  Income taxes (refund)                                    $   (16,000) $      (7,700) $      (8,418)
                                                           ============ ============== ==============

</TABLE>


<TABLE>
                           NORTHEAST UTILITIES AND SUBSIDIARIES                         SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1997
                                   (Thousands of Dollars)
<CAPTION>
------------------------------------------------------------------------------------------------------
Column A                                  Column B        Column C         Column D       Column E

                                                          Additions
                                                     --------------------
                                                        (1)         (2)

                                                                Charged to
                                          Balance at Charged to   other                     Balance
                                          beginning  costs and  accounts-  Deductions-      at end
Description                               of period  expenses   describe   describe        of period
------------------------------------------------------------------------------------------------------
<S>                                         <C>       <C>          <C>      <C>            <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts   $   17,062 $   14,854 $     -    $   29,864 (a) $    2,052
                                          =========  =========  =========  =========      =========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                    $   99,460 $  150,342 $     -    $  142,365 (b) $  107,437
                                          =========  =========  =========  =========      =========

(a)  Amounts written off, net of recoveries.                     
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, nuclear compliance expenditures and expenses in connection therewith. 

</TABLE>


 
<TABLE>

                           NORTHEAST UTILITIES AND SUBSIDIARIES                       SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1996
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------
Column A                               Column B       Column C          Column D       Column E

                                                      Additions
                                                 --------------------
                                                    (1)         (2)

                                                            Charged to
                                       Balance atCharged to   other                      Balance
                                       beginning costs and  accounts-   Deductions-      at end
Description                            of period expenses   describe    describe        of period
-------------------------------------------------------------------------------------------------
<S>                                      <C>       <C>         <C>        <C>            <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $  14,379 $  21,761 $     -      $   19,078 (a) $   17,062
                                       ========= =========  =========   ==========     ==========
  Asset valuation reserves            $  10,266 $         $     -      $   10,266     $        0
                                       ========= =========  =========   ==========     ==========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $  38,409 $  71,597 $     -      $   10,546 (b) $   99,460
                                       ========= =========  =========   ==========     ==========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 


</TABLE>


<TABLE>
                           NORTHEAST UTILITIES AND SUBSIDIARIES                          SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1995
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------------
Column A                                Column B         Column C            Column D      Column E

                                                         Additions
                                                    --------------------
                                                       (1)         (2)

                                                               Charged to
                                        Balance at  Charged to   other                       Balance
                                        beginning   costs and  accounts-     Deductions-     at end
Description                             of period   expenses   describe      describe       of period
-------------------------------------------------------------------------------------------------------
<S>                                       <C>         <C>         <C>          <C>           <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $   16,826 $    18,010 $     -       $   20,458 (a)$   14,378
                                        =========   =========  =========     =========     =========
  Asset valuation reserves            $    8,684 $     1,582 $     -       $     -       $   10,266
                                        =========   =========  =========     =========     =========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $   34,721 $    11,475 $     -       $    7,787 (b)$   38,409
                                        =========   =========  =========     =========     =========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 



  
</TABLE>


 <TABLE>
                  THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES              SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1997
                                   (Thousands of Dollars)
<CAPTION>
------------------------------------------------------------------------------------------------------
Column A                                  Column B        Column C         Column D       Column E

                                                          Additions
                                                     --------------------
                                                        (1)         (2)

                                                                Charged to
                                          Balance at Charged to   other                     Balance
                                          beginning  costs and  accounts-  Deductions-      at end
Description                               of period  expenses   describe   describe        of period
------------------------------------------------------------------------------------------------------
<S>                                         <C>       <C>          <C>      <C>            <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts   $   13,241 $   10,509 $     -    $   23,450 (a) $      300
                                          =========  =========  =========  =========      =========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                    $   69,379 $  118,174 $     -    $  113,891 (b) $   73,662
                                          =========  =========  =========  =========      =========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, nuclear compliance expenditures and expenses in connection therewith. 

</TABLE>


<TABLE>
                  THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES            SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1996
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------
Column A                               Column B       Column C          Column D       Column E

                                                      Additions
                                                 --------------------
                                                    (1)         (2)

                                                            Charged to
                                       Balance atCharged to   other                      Balance
                                       beginning costs and  accounts-   Deductions-      at end
Description                            of period expenses   describe    describe        of period
-------------------------------------------------------------------------------------------------
<S>                                      <C>       <C>          <C>        <C>            <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $  10,567 $  15,704 $     -      $   13,030 (a) $   13,241
                                       ========= =========  =========   ==========     ==========
  Asset valuation reserves            $  10,266 $    -    $     -      $   10,266     $        0
                                       ========= =========  =========   ==========     ==========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $  19,874 $  56,209 $     -      $    6,704 (b) $   69,379
                                       ========= =========  =========   ==========     ==========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 


</TABLE>

  

<TABLE>
                  THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES               SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1995
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------------
Column A                                Column B         Column C            Column D      Column E

                                                         Additions
                                                    --------------------
                                                       (1)         (2)

                                                               Charged to
                                        Balance at  Charged to   other                       Balance
                                        beginning   costs and  accounts-     Deductions-     at end
Description                             of period   expenses   describe      describe       of period
-------------------------------------------------------------------------------------------------------
<S>                                       <C>         <C>         <C>          <C>           <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $   12,778 $    12,722 $     -       $   14,933 (a)$   10,567
                                        =========   =========  =========     =========     =========
  Asset valuation reserves            $    8,684 $     1,582 $     -       $     -       $   10,266
                                        =========   =========  =========     =========     =========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $   19,529 $     5,633 $     -       $    5,288 (b)$   19,874
                                        =========   =========  =========     =========     =========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 



</TABLE>  

<TABLE>

                           PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE                      SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1997
                                   (Thousands of Dollars)
<CAPTION>
------------------------------------------------------------------------------------------------------
Column A                                  Column B        Column C         Column D       Column E

                                                          Additions
                                                     --------------------
                                                        (1)         (2)

                                                                Charged to
                                          Balance at Charged to   other                     Balance
                                          beginning  costs and  accounts-  Deductions-      at end
Description                               of period  expenses   describe   describe        of period
------------------------------------------------------------------------------------------------------
<S>                                          <C>        <C>       <C>         <C>            <C>           
                                                                                 
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts   $    1,700 $    3,259 $     -    $    3,257 (a) $    1,702
                                          =========  =========  =========  =========      =========

RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                    $    8,165 $    2,970 $     -    $    2,847 (b) $    8,288
                                          =========  =========  =========  =========      =========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, nuclear compliance expenditures and expenses in connection therewith. 


</TABLE>






<TABLE>
                           PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE                    SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                      YEAR ENDED DECEMBER 31, 1996
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------
Column A                               Column B       Column C          Column D       Column E

                                                      Additions
                                                 --------------------
                                                    (1)         (2)

                                                            Charged to
                                       Balance atCharged to   other                      Balance
                                       beginning costs and  accounts-   Deductions-      at end
Description                            of period(expenses   describe    describe        of period
-------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>         <C>        <C>            <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $   1,582 $   2,906 $     -      $    2,788 (a) $    1,700
                                       ========= =========  =========   ==========     ==========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $   8,142     1,940 $     -      $    1,917 (b) $    8,165
                                       ========= =========  =========   ==========     ==========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 



</TABLE>



<TABLE>


                           PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE                       SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1995
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------------
Column A                                Column B         Column C            Column D      Column E

                                                         Additions
                                                    --------------------
                                                       (1)         (2)

                                                               Charged to
                                        Balance at  Charged to   other                       Balance
                                        beginning   costs and  accounts-     Deductions-     at end
Description                             of period(a)expenses   describe      describe       of period
-------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>       <C>            <C>           <C>
                                                                                           
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $    2,015 $     2,454 $     -       $    2,887 (a)$    1,582
                                        =========   =========  =========     =========     =========
RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $    5,113 $     3,668 $     -       $      639 (b)$    8,142
                                        =========   =========  =========     =========     =========

(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 


</TABLE>

<TABLE>

                   WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY                SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1997
                                   (Thousands of Dollars)
<CAPTION>
------------------------------------------------------------------------------------------------------
Column A                                  Column B        Column C         Column D       Column E

                                                          Additions
                                                     --------------------
                                                        (1)         (2)

                                                                Charged to
                                          Balance at Charged to   other                     Balance
                                          beginning  costs and  accounts-  Deductions-      at end
Description                               of period  expenses   describe   describe        of period
------------------------------------------------------------------------------------------------------
<S>                                         <C>        <C>         <C>       <C>            <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts   $    2,121 $    1,086 $     -    $    3,157 (a) $       50
                                          =========  =========  =========  =========      =========

RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                    $   17,375 $   27,722 $     -    $   25,794 (b) $   19,303
                                          =========  =========  =========  =========      =========

(a)  Amounts written off, net of recoveries.          
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, nuclear compliance expenditures and expenses in connection therewith. 

</TABLE>



<TABLE>
                            WESTERN MASSACHUSETTS ELECTRIC COMPANY                    SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1996
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------
Column A                               Column B       Column C          Column D       Column E

                                                      Additions
                                                 --------------------
                                                    (1)         (2)

                                                            Charged to
                                       Balance atCharged to   other                      Balance
                                       beginning costs and  accounts-   Deductions-      at end
Description                            of period expenses   describe    describe        of period
-------------------------------------------------------------------------------------------------
<S>                                       <C>       <C>         <C>        <C>            <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $   2,230 $   3,097 $     -      $    3,206 (a) $    2,121
                                       ========= =========  =========   ==========     ==========


RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $   5,144 $  13,022 $     -      $      791 (b) $   17,375
                                       ========= =========  =========   ==========     ==========
(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 


</TABLE>


<TABLE>
                            WESTERN MASSACHUSETTS ELECTRIC COMPANY                      SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                YEAR ENDED DECEMBER 31, 1995
                                   (Thousands of Dollars)
<CAPTION>
-------------------------------------------------------------------------------------------------------
Column A                                Column B         Column C            Column D      Column E

                                                         Additions
                                                    --------------------
                                                       (1)         (2)

                                                               Charged to
                                        Balance at  Charged to   other                       Balance
                                        beginning   costs and  accounts-     Deductions-     at end
Description                             of period   expenses   describe      describe       of period
-------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>         <C>          <C>           <C>
RESERVES DEDUCTED FROM ASSETS
 TO WHICH THEY APPLY:

  Reserves for uncollectible accounts $    2,032 $     2,836 $     -       $    2,638 (a)$    2,230
                                        =========   =========  =========     =========     =========


RESERVES NOT APPLIED AGAINST ASSETS:

  Operating reserves                  $    4,674 $     1,340 $     -       $      870 (b)$    5,144
                                        =========   =========  =========     =========     =========
(a)  Amounts written off, net of recoveries.
(b)  Principally payments for environmental remediation, various injuries and damages, employee 
     medical expenses, and expenses in connection therewith. 

</TABLE>



  



                               EXHIBIT INDEX


     Each document described below is incorporated by reference to the files of
the Securities and Exchange Commission, unless the reference to the document is
marked as follows:

     *  - Filed with the 1997 Annual Report on Form 10-K for NU and herein
     incorporated by reference from the 1997 NU Form 10-K, File No. 1-5324 into
     the 1997 Annual Reports on Form 10-K for CL&P, PSNH, WMECO and NAEC.

     #  - Filed with the 1997 Annual Report on Form 10-K for NU and herein
     incorporated by reference from the 1997 NU Form 10-K, File No. 1-5324 into
     the 1997 Annual Report on Form 10-K for CL&P.

     @  - Filed with the 1997 Annual Report on Form 10-K for NU and herein
     incorporated by reference from the 1997 NU Form 10-K, File No. 1-5324 into
     the 1997 Annual Report on Form 10-K for PSNH.

     ** - Filed with the 1997 Annual Report on Form 10-K for NU and herein
     incorporated by reference from the 1997 NU Form 10-K, File No. 1-5324 into
     the 1997 Annual Report on Form 10-K for WMECO.

     ## - Filed with the 1997 Annual Report on Form 10-K for NU and herein
     incorporated by reference from the 1997 Form 10-K, File No. 1-5324 into the
     1997 Annual Report on Form 10-K for NAEC.

Exhibit
Number                        Description


 3    Articles of Incorporation and By-Laws

     3.1  Northeast Utilities

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

     3.2  The Connecticut Light and Power Company

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

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

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


     3.3  Public Service Company of New Hampshire

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

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

     3.4  Western Massachusetts Electric Company

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

**          3.4.2   By-laws of WMECO, as amended to February 11, 1998.

     3.5  North Atlantic Energy Corporation

            3.5.1   Articles of Incorporation of NAEC dated September 20, 1991.
                    (Exhibit 3.5.1, 1993 NU Form 10-K, File No. 1-5324)

            3.5.2   Articles of Amendment dated October 16, 1991 and June 2,
                    1992 to Articles of Incorporation of NAEC. (Exhibit 3.5.2,
                    1993 NU Form 10-K, File No. 1-5324)

            3.5.3   By-laws of NAEC, as amended to November 8, 1993.  (Exhibit
                    3.5.3, 1993 NU Form 10-K, File No. 1-5324)

 4   Instruments defining the rights of security holders, including indentures

     4.1  Northeast Utilities

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

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

          4.1.3     Second Supplemental Indenture dated as of March 1, 1992
                    between Northeast Utilities and IBJ Schroder Bank & Trust
                    Company with respect to the issuance of 8.38% Amortizing
                    Notes.  (Exhibit 4.1.3, 1992 NU Form 10-K, File No. 1-5324)
    
          4.1.4     Credit Agreements among CL&P, NU, WMECO, NUSCO (as Agent)
                    and 3 Commercial Banks dated December 3, 1992 (Three-Year
                    Facility). (Exhibit C.2.38, 1992 NU Form U5S, File No. 30-
                    246)

          4.1.5     Credit Agreements among CL&P, WMECO, NU, Holyoke Water Power
                    Company, RRR, NNECO and NUSCO (as Agent) and 1 commercial
                    bank dated December 3, 1992 (Three-Year Facility).  (Exhibit
                    C.2.39, 1992 NU Form U5S, File No. 30-246)

          4.1.6     Credit Agreement among NU, CL&P and WMECO and several
                    commercial banks, dated as of November 21, 1996.  (Exhibit
                    No. B.1, File No. 70-8875)

          4.1.7     First Amendment and Waiver dated as of May 30, 1997 to
                    Credit Agreement dated as of November 21, 1996 among NU,
                    CL&P, WMECO, and the Co-Agents and Banks named therein.
                    (Exhibit B.4(a) (Execution Copy), File No. 70-8875)

          4.1.8     Credit Agreement dated as of February 10, 1998 among NU, the
                    Lenders named therein, and Toronto Dominion (Texas), Inc.,
                    as Administrative Agent, TD Securities (USA) Inc., as
                    Arranger. (Exhibit B.9 (Execution Copy), File No. 70-8875)

     4.2  The Connecticut Light and Power Company

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

          4.2.2     December 1, 1969. (Exhibit 4.20, File No. 2-60806)

          4.2.3     June 30, 1982. (Exhibit 4.33, File No. 2-79235)

          4.2.4     December 1, 1989. (Exhibit 4.1.26, 1989 NU Form 10-K, File
                    No. 1-5324)

          4.2.5     July 1, 1992. (Exhibit 4.31, File No. 33-59430)

          4.2.6     July 1, 1993. (Exhibit A.10(b),  File No. 70-8249)

          4.2.7     July 1, 1993. (Exhibit A.10(b),  File No. 70-8249)

          4.2.8     December 1, 1993. (Exhibit 4.2.14, 1993 NU Form 10-K, File
                    No. 1-5324)

          4.2.9     February 1, 1994. (Exhibit 4.2.15, 1993 NU Form 10-K, File
                    No. 1-5324)

          4.2.10    February 1, 1994. (Exhibit 4.2.16, 1993 NU Form 10-K, File
                    No. 1-5324)

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

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

          4.2.13    June 1, 1996. (Exhibit 4.2.16, 1996 NU Form 10-K, File No.
                    1-5324)

          4.2.14    January 1, 1997. (Exhibit 4.2.17, 1996 NU Form 10-K, File
                    No. 1-5324)

          4.2.15    May 1, 1997.   (Exhibit 4.19, File No. 333-30911)

          4.2.16    June 1, 1997. (Exhibit 4.20, File No. 333-30911)

#         4.2.17    June 1, 1997.

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

                    4.2.18.1  Letter of Credit and Reimbursement Agreement
                              (Pollution Control Bonds, 1986 Series) dated as of
                              August 1, 1994.  (Exhibit 1 (Execution Copy),
                              File No. 70-7320)

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

                    4.2.19.1  Letter of Credit (Pollution Control Bonds,
                              1988  Series) dated October 27, 1988.  (Exhibit
                              4.2.17.1, 1995 NU Form 10-K, File No. 1-5324)


                    4.2.19.2  Reimbursement and Security Agreement
                              (Pollution  Control Bonds, 1988 Series) dated as
                              of October 1, 1988.  (Exhibit 4.2.17.2, 1995 NU
                              form 10-K, File No. 1-5324)

          4.2.20    Financing Agreement between Industrial Development Authority
                    of the State of New Hampshire and CL&P (Pollution Control
                    Bonds) dated as of December 1, 1989.  (Exhibit C.1.39, 1989
                    NU Form U5S, File No. 30-246)

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

                    4.2.21.1  Letter of Credit and Reimbursement Agreement
                              (Pollution Control Bonds, 1992 Series A) dated as
                              of December 1, 1992.  (Exhibit 4.2.19.1, 1995 NU
                              Form 10-K, File No. 1-5324)

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

                    4.2.22.1  Letter of Credit and Reimbursement Agreement
                              (Pollution Control Bonds - Series A, Tax Exempt
                              Refunding) dated as of September 1, 1993.
                              (Exhibit 4.2.23, 1993 NU Form 10-K, File No. 1-
                              5324)

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

                    4.2.23.1  Letter of Credit and Reimbursement Agreement
                              (Pollution Control Bonds - Series B, Tax Exempt
                              Refunding) dated as of September 1, 1993.
                              (Exhibit 4.2.24, 1993 NU Form 10-K, File No. 1-
                              5324)
  
          4.2.24    Amended and Restated Loan Agreement between Connecticut
                    Development Authority and CL&P (Pollution Control Revenue
                    Bond - 1996A Series) dated as of May 1, 1996 and Amended and
                    Restated as of January 1, 1997.  (Exhibit 4.2.24, 1996 NU
                    Form 10-K, File No. 1-5324)

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

                    4.2.24.2  Standby Bond Purchase Agreement among CL&P,
                              Societe Generale, New York Branch and the Trustee,
                              dated January 23, 1997. (Exhibit 4.2.24.2, 1996 NU
                              Form 10-K, File No. 1-5324)

 #                  4.2.24.3  Amendment No. 1, dated January 21, 1998,
                              to the Standby Bond Purchase Agreement, 
                              dated January 23, 1997.
 
                    4.2.24.4  AMBAC Municipal Bond Insurance Policy issued
                              by the Connecticut Development Authority (CL&P
                              Pollution Control Revenue Bond-1996A Series),
                              effective January 23, 1997.  (Exhibit 4.2.24.3,
                              1996 NU Form 10-K, File No. 1-5324)

          4.2.25    Amended and Restated Limited Partnership Agreement (CL&P
                    Capital, L.P.) among CL&P, NUSCO, and the persons who became
                    limited partners of CL&P Capital, L.P. in accordance with
                    the provisions thereof dated as of January 23, 1995 (MIPS).
                    (Exhibit A.1 (Execution Copy), File No. 70-8451)

          4.2.26    Indenture between CL&P and Bankers Trust Company, Trustee
                    (Series A Subordinated Debentures), dated as of January 1,
                    1995 (MIPS).  (Exhibit B.1 (Execution Copy), File No. 70-
                    8451)

          4.2.27    Payment and Guaranty Agreement of CL&P dated as of January
                    23, 1995 (MIPS).  (Exhibit B.3 (Execution Copy), File No.
                    70-8451)

     4.3  Public Service Company of New Hampshire

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

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

          4.3.2     Revolving Credit Agreement, dated as of May 1, 1991
                    (includes a collateral mortgage). (Exhibit 4.12, PSNH
                    Current Report on Form 8-K, File No. 1-6392)

                    4.3.2.1   Amended and Restated Revolving Credit
                              Agreement, dated as of April 1, 1996
                              (includes amendment to collateral
                              mortgage). (Exhibit 4.3.2, 1996 NU Form 10-K,
                              File No. 1-5324)


          4.3.3     Series A (Tax Exempt New Issue) PCRB Loan and Trust
                    Agreement dated as of May 1, 1991.  (Exhibit 4.2, PSNH
                    Current Report on Form 8-K dated February 10, 1992, File No.
                    1-6392)

          4.3.4     Series B (Tax Exempt Refunding) PCRB Loan and Trust
                    Agreement dated as of May 1, 1991.  (Exhibit 4.3, PSNH
                    Current Report on Form 8-K dated February 10, 1992, File No.
                    1-6392)

          4.3.5     Series C (Tax Exempt Refunding) PCRB Loan and Trust
                    Agreement dated as of May 1, 1991.  (Exhibit 4.4, PSNH
                    Current Report on Form 8-K dated February 10, 1992, File No.
                    1-6392)


          4.3.6     Series D (Taxable New Issue) PCRB Loan and Trust Agreement
                    dated as of May 1, 1991.  (Exhibit 4.5, PSNH Current Report
                    on Form 8-K dated February 10, 1992, File No. 1-6392)

                    4.3.6.1   First Supplement to Series D (Tax Exempt Refunding
                              Issue) PCRB Loan and Trust Agreement dated as of
                              December 1, 1992. (Exhibit  4.4.5.1, 1992 NU Form
                              10-K, File No. 1-5324)

                    4.3.6.2   Second Series D (May 1, 1991 Taxable New Issue and
                              December 1, 1992 Tax Exempt Refunding Issue) PCRB
                              Letter of Credit and Reimbursement Agreement dated
                              as of May 1, 1995 (Exhibit B.4, Execution Copy,
                              File No. 70-8036)

          4.3.7     Series E (Taxable New Issue) PCRB Loan and Trust Agreement
                    dated as of May 1, 1991.  (Exhibit 4.6, PSNH Current Report
                    on Form 8-K dated February 10, 1992, File No. 1-6392)

                    4.3.7.1   First Supplement to Series E (Tax Exempt Refunding
                              Issue) PCRB Loan and Trust Agreement dated as of
                              December 1, 1993. (Exhibit 4.3.8.1, 1993 NU Form
                              10-K, File No. 1-5324)

                    4.3.7.2   Second Series E (May 1, 1991 Taxable New Issue and
                              December 1, 1993 Tax Exempt Refunding Issue) PCRB
                              Letter of Credit and Reimbursement Agreement dated
                              as of May 1, 1995. (Exhibit B.5, (Execution Copy),
                              File No. 70-8036)


4.4  Western Massachusetts Electric Company


          4.4.1     First Mortgage Indenture and Deed of Trust between WMECO and
                    Old Colony Trust Company, Trustee, dated as of August 1,
                    1954.  (Exhibit 4.4.1, 1993 NU Form 10-K, File No. 1-5324)

                    Supplemental Indentures thereto dated as of:

          4.4.2     October 1, 1954.(Exhibit 4.2, File No. 33-51185)

**        4.4.3     March 1, 1967.

          4.4.4     July 1, 1973.  (Exhibit 2.10. File No. 2-68808)

          4.4.5     December 1, 1992. (Exhibit 4.15, File No. 33-55772)

          4.4.6     January 1, 1993. (Exhibit 4.5.13, 1992 NU Form 10-K, File
                    No. 1-5324)

          4.4.7     March 1, 1994. (Exhibit 4.4.11, 1993 NU Form 10-K, File No.
                    1-5324)

          4.4.8     March 1, 1994. (Exhibit 4.4.12, 1993 NU Form 10-K, File No.
                    1-5324)

          4.4.9     May 1, 1997. (Exhibit 4.11, File No. 33-51185)

**        4.4.10    July 1, 1997.

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

                    4.4.11.1  Letter of Credit and Reimbursement Agreement
                              (Pollution Control Bonds - Series A, Tax Exempt
                              Refunding) dated as of September 1, 1993.
                              (Exhibit 4.4.14, 1993 NU Form 10-K, File No. 1-
                              5324)

     4.5  North Atlantic Energy Corporation

          4.5.1     First Mortgage Indenture and Deed of Trust between NAEC and
                    United States Trust Company of New York, Trustee, dated as
                    of June 1, 1992.  (Exhibit 4.6.1, 1992 NU Form 10-K, File
                    No. 1-5324)

          4.5.2     Term Credit Agreement dated as of November 9, 1995.
                    (Exhibit 4.5.2, 1995 NU Form 10-K, File No. 1-5324)


10   Material Contracts

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

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

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

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

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

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

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

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

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

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

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

 #@**10.6 Stockholder Agreement dated as of May 20, 1968 among stockholders of
          MYAPC.

 #@**10.7 Form of Power Contract dated as of May 20, 1968 between MYAPC and
          each of CL&P, HELCO, PSNH and WMECO.

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

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

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

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

 #@**10.8 Capital Funds Agreement dated as of May 20, 1968 between MYAPC
          and CL&P, PSNH, HELCO and WMECO.

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

 #@**10.9 Sponsor Agreement dated as of August 1, 1968 among the
          sponsors of Vermont Yankee Nuclear Power Corporation
          (VYNPC).

 #@**10.10 Form of Power Contract dated as of February 1, 1968 between    VYNPC
           and each of CL&P, HELCO, PSNH and WMECO.

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

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

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

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

          10.10.5   Form of Fifth Amendment to Power Contract dated as of May 6,
                    1988 between VYNPC and each of CL&P, PSNH and WMECO.
                    (Exhibit 10.10.5, 1990 NU Form 10-K, File No. 1-5324)

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

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

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

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

 #@**10.11 Capital Funds Agreement dated as of February 1, 1968 between VYNPC 
           and CL&P, HELCO, PSNH and WMECO.

 #@**     10.11.1   Form of First Amendment to Capital Funds Agreement dated as
                    of March 12, 1968 between VYNPC and CL&P, HELCO, PSNH and
                    WMECO.

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

    10.12 Amended and Restated Millstone Plant Agreement dated as of  December
          1, 1984 by and among CL&P, WMECO and Northeast Nuclear Energy Company
          (NNECO).  (Exhibit 10.12, 1994 NU Form 10-K, File No. 1-5324)

    10.13 Sharing Agreement dated as of September 1, 1973 with respect to 1979
          Connecticut nuclear generating unit (Millstone 3). (Exhibit 6.43, File
          No. 2-50142)

          10.13.1   Amendment dated August 1, 1974 to Sharing Agreement -  1979
                    Connecticut Nuclear Unit.  (Exhibit 5.45, File No. 2-52392)

          10.13.2   Amendment dated December 15, 1975 to Sharing Agreement -
                    1979 Connecticut Nuclear Unit.  (Exhibit 7.47, File No. 2-
                    60806)

          10.13.3   Amendment dated April 1, 1986 to Sharing Agreement -  1979
                    Connecticut Nuclear Unit.  (Exhibit 10.17.3, 1990 NU Form
                    10-K, File No. 1-5324)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          10.19.1    Form of First Amendment to Exhibit 10.19. (Exhibit 10.4.8,
                     File No. 33-35312)

          10.19.2    Form (Composite) of Second Amendment to Exhibit 10.19.
                     (Exhibit 10.18.2, 1993 NU Form 10-K, File No. 1-5324)

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

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

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

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

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


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

          10.21.2    Service Contract dated as of June 5, 1992 between NAEC and
                     the Service Company.  (Exhibit 10.12.5, 1992 NU Form 10-K,
                     File No. 1-5324)

          10.21.3    Form of Service Agreement dated as of June 29, 1992 between
                     PSNH and North Atlantic Energy Service Corporation, and the
                     First Amendment thereto. (Exhibits B.7 and B.7.1, File No.
                     70-7787)

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

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

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

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

    10.23 New England Power Pool Agreement effective as of November 1, 1971, as
          amended to December 1, 1996.  (Exhibit 10.15, 1988 NU Form 10-K, File
          No. 1-5324.)

          10.23.1    Twenty-sixth Amendment to Exhibit 10.23 dated as of  March
                     15, 1989.  (Exhibit 10.15.1, 1990 NU Form 10-K, File No. 1-
                     5324)

          10.23.2    Twenty-seventh Amendment to Exhibit 10.23 dated as of
                     October 1, 1990.  (Exhibit 10.15.2, 1991 NU Form 10-K, File
                     No. 1-5324)

          10.23.3    Twenty-eighth Amendment to Exhibit 10.23 dated as of
                     September 15, 1992.  (Exhibit 10.18.3, 1992 NU Form 10-K,
                     File No. 1-5324)

          10.23.4    Twenty-ninth Amendment to Exhibit 10.23 dated as of May 1,
                     1993.  (Exhibit 10.22.4, 1993 NU Form 10-K, File No. 
                     1-5324)

          10.23.5    Thirty-second Amendment (Amendments 30 and 31 were
                     withdrawn) to Exhibit 10.23 dated as of September 1, 1995.
                     (Exhibit 10.23.5, 1995 NU Form 10-K, File No. 1-5324)

          10.23.6    Thirty-third Amendment to Exhibit 10.23 dated as of 
                     December 31, 1996 and Form of Interim Independent System 
                     Operator (ISO) Agreement.  (Exhibit 10.23.6, 1996 NU Form 
                     10-K, File No. 1-5324)

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

    10.25 Trust Agreement dated February 11, 1992, between State Street Bank and
          Trust Company of Connecticut, as Trustor, and Bankers Trust Company,
          as Trustee, and CL&P and WMECO, with respect to NBFT.  (Exhibit 10.23,
          1991 NU Form 10-K, File No. 1-5324)

          10.25.1    Nuclear Fuel Lease Agreement dated as of February 11, 1992,
                     between Bankers Trust Company, Trustee, as Lessor, and CL&P
                     and WMECO, as Lessees.  (Exhibit 10.23.1, 1991 NU Form 
                     10-K, File No. 1-5324)


    10.26 Simulator Financing Lease Agreement, dated as of February 1, 1985, by
          and between ComPlan and NNECO.  (Exhibit 10.25, 1994 NU Form 10-K,
          File No. 1-5324)

    10.27 Simulator Financing Lease Agreement, dated as of May 2, 1985, by and
          between The Prudential Insurance Company of America and NNECO.
          (Exhibit No. 10.26, 1994 NU Form 10-K, File No. 1-5324)

    10.28 Lease dated as of April 14, 1992 between The Rocky River Realty
          Company (RRR) and Northeast Utilities Service Company (NUSCO) with
          respect to the Berlin, Connecticut headquarters (office lease).
          (Exhibit 10.29, 1992 NU Form 10-K, File No. 1-5324)

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

    10.29 Millstone Technical Building Note Agreement dated as of December 21,
          1993 between, by and between The Prudential Insurance Company of
          America and NNECO.  (Exhibit 10.28, 1993 NU Form 10-K, File No. 1-
          5324)

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

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

*         10.31.1    Amendment to Note Agreement, dated September 26, 1997.

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

*                    10.31.2.1   Extension of Note Guaranty, dated September 26,
                                 1997.


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

*                    10.31.3.1   Modification of and Confirmation of
                                 Assignment of Leases, Rents and Profits, 
                                 Security Agreement and Negative Pledge, 
                                 dated as of September 26, 1997.

*         10.31.4    Purchase and Sale Agreement, dated July 28, 1997 by and
                     between RRR and the Sellers and Purchasers named therein.

*         10.31.5    Purchase and Sale Agreement, dated September 26, 1997 by 
                     and between RRR and the Purchaser named therein.

    10.32 Master Trust Agreement dated as of September 2, 1986 between CL&P and
          WMECO and Colonial Bank as Trustee, with respect to reserve funds for
          Millstone 1 decommissioning costs.  (Exhibit No. 10.32, 1996 NU Form
          10-K, File No. 1-5324)

          10.32.1    Notice of Appointment of Mellon Bank, N.A. as Successor
                     Trustee, dated November 20, 1990, and Acceptance of
                     Appointment.  (Exhibit 10.41.1, 1992 NU Form 10-K, File No.
                     1-5324)

    10.33 Master Trust Agreement dated as of September 2, 1986 between CL&P and
          WMECO and Colonial Bank as Trustee, with respect to reserve funds for
          Millstone 2 decommissioning costs. (Exhibit No. 10.33, 1996 NU Form
          10-K, File No. 1-5324)

          10.33.1    Notice of Appointment of Mellon Bank, N.A. as Successor
                     Trustee, dated November 20, 1990, and Acceptance of
                     Appointment.  (Exhibit 10.42.1, 1992 NU Form 10-K, File No.
                     1-5324)

    10.34 Master Trust Agreement dated as of April 23, 1986 between CL&P and
          WMECO and Colonial Bank as Trustee, with respect to reserve funds for
          Millstone 3 decommissioning costs. (Exhibit No. 10.34, 1996 NU Form
          10-K, File No. 1-5324)

          10.34.1    Notice of Appointment of Mellon Bank, N.A. as Successor
                     Trustee, dated November 20, 1990, and Acceptance of
                     Appointment.  (Exhibit 10.43.1, 1992 NU Form 10-K, File No.
                     1-5324)

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

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

          10.36.1    Amendment 1 to Exhibit 10.36, effective as of August 1,
                     1993.  (Exhibit 10.35.1, 1993 NU Form 10-K, File No. 
                     1-5324)

          10.36.2    Amendment 2 to Exhibit 10.36, effective as of January 1,
                     1994.  (Exhibit 10.35.2, 1993 NU Form 10-K, File No. 
                     1-5324)

          10.36.3    Amendment 3 to Exhibit 10.36, effective as of January 1,
                     1996.  (Exhibit 10.36.3, 1995 NU Form 10-K, File No. 
                     1-5324)

    10.37 Special Severance Program for Officers of NU System Companies, as
          adopted on June 9, 1997. (Exhibit No. 10.33, File No. 333-30911)
 
    10.38 Loan Agreement dated as of December 2, 1991, by and between NU and
          Mellon Bank, N.A., as Trustee, with respect to NU's loan of $175
          million to an ESOP Trust.  (Exhibit 10.46, 1991 NU Form 10-K, File No.
          1-5324)

          10.38.1    First Amendment to Exhibit 10.37 dated February 7, 1992.
                     (Exhibit 10.36.1, 1993 NU Form 10-K, File No. 1-5324)

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

          10.38.3    Second Amendment to Exhibit 10.37 dated April 9, 1992.
                     (Exhibit 10.36.3, 1993 NU Form 10-K, File No. 1-5324)

*   10.39 Employment Agreement with Michael G. Morris.

    10.40 Transition and Retirement Agreement with Bernard M. Fox.  (Exhibit
          10.39, 1996 NU Form 10-K, File No. 1-5324)

    10.41 Employment Agreement with Bruce M. Kenyon.  (Exhibit 10.40, 1996 NU
          Form 10-K, File No. 1-5324)

    10.42 Employment Agreement with John H. Forsgren.  (Exhibit 10.41, 1996 NU
          Form 10-K, File No. 1-5324)

    10.43 Employment Agreement with Hugh C. MacKenzie.  (Exhibit 10.42, 1996 NU
          Form 10-K, File No. 1-5324)

*   10.44 Employment Agreement with Robert P. Wax.
 
    10.45 Northeast Utilities Deferred Compensation Plan for Trustees, Amended
          and Restated December 13, 1994.  (Exhibit 10.39, 1995 NU Form 10-K,
          File No. 1-5324)

    10.46 Deferred Compensation Plan for Officers of Northeast Utilities System
          Companies adopted September 23, 1986.  (Exhibit 10.40, 1995 NU Form
          10-K, File No. 1-5324)

    10.47 Northeast Utilities Deferred Compensation Plan for Executives, adopted
          January 13, 1998.  (Exhibit A.5, File No. 70-09185)

    10.48 Reciprocal Support Agreement Among NNECO, NAESCO, CYAPC, YAEC and
          NUSCO dated January 1, 1996.  (Exhibit 10.41, 1995 NU Form 10K, File
          No. 1-5324)

#   10.49 Receivables Purchase and Sale Agreement (CL&P and CL&P Receivables
          Corporation), dated as of September 30, 1997.

#         10.49.1    Purchase and Contribution Agreement (CL&P and CL&P
                     Receivables Corporation), dated as of September 30, 1997.

**  10.50 Receivables Purchase Agreement (WMECO and WMECO Receivables
          Corporation), dated as of May 22, 1997.

**        10.50.1    Purchase and Sale Agreement (WMECO and WMECO
                     Receivables Corporation), dated as of May 22, 1997.

    10.51 Master Lease Agreement between General Electric Capital Corporation
          and CL&P, dated as of June 21, 1996.  (Exhibit 10.50, 1996 NU Form 
          10-K, File No. 1-5324)


#         10.51.1    Amendment No. 1 to Master Lease Agreement, dated as of
                     August 29, 1997.

 13  Annual Report to Security Holders  (Each of the Annual Reports is filed
     only with the Form 10-K of that respective registrant.)

*    13.1 Portions of the Annual Report to Shareholders of NU (pages 12-53) 
          that have been incorporated by reference into this Form 10-K.

     13.2 Annual Report of CL&P.

     13.3 Annual Report of WMECO.

     13.4 Annual Report of PSNH.

     13.5 Annual Report of NAEC.

*21  Subsidiaries of the Registrant.

 27  Financial Data Schedules (Each Financial Data Schedule is filed only with
     the Form 10-K of that respective registrant.)

     27.1 Financial Data Schedule of NU.

     27.2 Financial Data Schedule of CL&P.

     27.3 Financial Data Schedule of WMECO.

     27.4 Financial Data Schedule of PSNH.

     27.5 Financial Data Schedule of NAEC.