<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q/A

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


   For the quarterly period ended                                  June 30, 2002

                                       OR

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

      For the transition period from         ______________ to _____________

      Commission file number                                          1-12527

                             BAYCORP HOLDINGS, LTD.
             (Exact name of registrant as specified in its charter)

         DELAWARE                                   02-0488443
(State or other jurisdiction of                   (I.R.S. Employer
  incorporation or organization)                  Identification No.)

      51 DOW HIGHWAY, SUITE 7                          03903
           ELIOT, MAINE
(Address of principal executive offices)            (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (207) 451-9573


         Indicate by check mark whether the registrant (1) has 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
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  [X]     No [ ]

           Class                                Outstanding at August 2, 2002
---------------------------------------         -----------------------------
Common Stock, $0.01 Par Value per Share                    8,540,869
<PAGE>
                             BAYCORP HOLDINGS, LTD.

                                      INDEX

<TABLE>
<S>                                                                             <C>
PART I - FINANCIAL INFORMATION:

         Item 1 - Financial Statements:

         Consolidated Statements of Income and Comprehensive Income -
               Three and Six Months Ended June 30, 2002 and 2001 ..............   3

         Consolidated Balance Sheets  -
            at June 30, 2002 and December 31,  2001.............................4-5

         Consolidated Statements of Cash Flows -
             Six Months Ended June 30, 2002 and 2001...........................   6

         Notes to Financial Statements..........................................  7
         .
         Item 2 -  Management's Discussion and Analysis of Financial Condition
              and Results of Operations......................................... 14

         Item 3 -  Quantitative and Qualitative Disclosures About Market Risk... 19


PART II - OTHER INFORMATION:


         Item 4 - Submission of Matters to a Vote of Security Holders........... 19

         Item 6 - Exhibits and Reports on Form 8-K.............................. 20


         Signature.............................................................. 21

         Certifications......................................................... 22

         Exhibit Index.......................................................... 24
</TABLE>

                                       2
<PAGE>
                             BAYCORP HOLDINGS, LTD.


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                   (UNAUDITED)

            (Dollars in Thousands, except shares and per share data)

<TABLE>
<CAPTION>
                                                             Three Months Ended June 30,        Six Months Ended June 30,
                                                               2002            2001                2002            2001
                                                           ---------      ---------            ---------       ---------
<S>                                                          <C>            <C>                  <C>             <C>
Operating Revenues                                           $10,126        $19,470              $25,494         $38,737

Operating Expenses

  Production                                                   6,832          5,513               13,418          10,939
  Transmission                                                   291            270                  539             534
  Purchased Power                                                 71          3,589                  263          17,327
  Unrealized Gain on Firm Energy Contracts                         0         (7,006)                   0         (13,320)
  Administrative & General                                     2,269          1,363                4,253           3,178
  Depreciation & Amortization                                    939            998                1,880           1,995
  Decommissioning Cost Accretion                               1,232            815                2,463           1,630
  Decommissioning Trust Fund Income                             (448)          (408)                (805)           (760)
  Taxes other than Income                                        939            951                1,810           1,914
                                                           ---------      ---------            ---------       ---------
      Total Operating Expenses                                12,125          6,085               23,821          23,437
Operating (Loss) Income                                       (1,999)        13,385                1,673          15,300

Other (Income) Deductions:
  Interest and Dividend Income                                  (145)          (154)                (275)           (324)
  Equity Loss in HoustonStreet Investment                          0              0                    0             450
  Other (Income) deductions                                     (131)            (4)                  27              58
                                                           ---------      ---------            ---------       ---------
      Total Other (Income) Deductions                           (276)          (158)                (248)            184
Income (Loss) Before Income Taxes                             (1,723)        13,543                1,921          15,116

Income Taxes                                                       0              0                    0               0
                                                           ---------      ---------            ---------       ---------
Net (Loss) Income                                             (1,723)        13,543                1,921          15,116

Other Comprehensive Loss
  Unrealized Loss on Securities                                 (205)          (249)                (701)           (212)
                                                           ---------      ---------            ---------       ---------
Comprehensive (Loss) Income                                  ($1,928)       $13,294               $1,220         $14,904
                                                           =========      =========            =========       =========
Weighted Average Shares Outstanding - Basic                8,390,226      8,334,264            8,392,390       8,334,264
Weighted Average Shares Outstanding - Diluted              8,390,226      8,613,602            8,692,600       8,574,208
Basic Net Income Per Share                                    ($0.20)         $1.63                $0.23           $1.81
Diluted Net Income Per Share                                  ($0.20)         $1.57                $0.22           $1.76
</TABLE>

 (The accompanying notes are an integral part of these consolidated statements.)

                                       3
<PAGE>
                             BAYCORP HOLDINGS, LTD.

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                   June 30,            December 31,
                                                                                     2002                 2001
                                                                                ----------------      -------------
<S>                                                                             <C>                   <C>
ASSETS
Current Assets:

  Cash & Cash Equivalents                                                                $5,269            $15,278
  Restricted Cash - Escrow                                                                  357              1,903
  Short-term Investments, at market                                                      14,821                  0
  Accounts Receivable (Net of allowance of $1,100)                                        4,621              6,291
  Accounts Receivable from Related Party                                                     25                  0
  Materials & Supplies, net                                                               4,593              4,708
  Prepayments & Other Assets                                                              1,282              1,372
                                                                                ----------------      -------------
      Total Current Assets                                                               30,968             29,552

Property, Plant & Equipment and Fuel:
  Utility Plant Assets                                                                  124,607            123,923
  Less: Accumulated Depreciation                                                        (24,603)           (22,944)
                                                                                ----------------      -------------
  Net Property, Plant & Equipment                                                       100,004            100,979

  Nuclear Fuel                                                                           16,653             23,365
  Less: Accumulated Amortization                                                         (7,356)           (12,096)
                                                                                ----------------      -------------
  Net Nuclear Fuel                                                                        9,297             11,269

      Net Property, Plant & Equipment and Fuel                                          109,301            112,248

Other Assets:
  Decommissioning Trust Fund                                                             32,798             32,048
  Deferred Debits & Other                                                                   379                123
                                                                                ----------------      -------------
      Total Other Assets                                                                 33,177             32,171


TOTAL ASSETS                                                                           $173,446           $173,971
                                                                                ================      =============
</TABLE>
 (The accompanying notes are an integral part of these consolidated statements.)

                                       4
<PAGE>
                             BAYCORP HOLDINGS, LTD.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                                   June 30,            December 31,
                                                                                     2002                 2001
                                                                                ----------------      -------------
<S>                                                                             <C>                   <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts Payable and Accrued Expenses                                                    $238             $1,607
  Accrued Taxes                                                                             703                617
  Accrued Misc. Seabrook Liabilities                                                        570              1,115
  Accrued Legal and Professional Expenses                                                   185                244
  Miscellaneous Current Liabilities                                                          65              3,558
                                                                                ----------------      -------------
          Total Current Liabilities                                                       1,761              7,141

Operating Reserves:
  Decommissioning Liability                                                              87,986             85,523
  Miscellaneous Other                                                                       386                386
                                                                                ----------------      -------------
          Total Operating Reserves                                                       88,372             85,909

Other Liabilities & Deferred Credits                                                      8,317              7,500



Commitments & Contingencies

Stockholders' Equity:
  Common stock, $.01 par value,
      Authorized - 20,000,000 shares,
      Issued and Outstanding - 8,767,250 and 8,586,316, respectively                         88                 86
   Less: Treasury Stock - 226,381 and 185,052 shares,
      respectively, at cost                                                              (1,772)            (1,396)
   Additional Paid-in Capital                                                           101,525            100,383
   Deferred Compensation                                                                   (413)                 0
   Accumulated Other Comprehensive Income (Loss)                                           (478)               223
   Accumulated Deficit                                                                  (23,954)           (25,875)
                                                                                ----------------      -------------
          Total Stockholders' Equity                                                     74,996             73,421

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                             $173,446           $173,971
                                                                                ================      =============
</TABLE>

 (The accompanying notes are an integral part of these consolidated statements.)

                                       5
<PAGE>
                             BAYCORP HOLDINGS, LTD.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                        Six Months            Six Months
                                                                                          Ended                 Ended
                                                                                      June 30, 2002         June 30, 2001
                                                                                    -------------------   -------------------
<S>                                                                                 <C>                   <C>
Net cash flow from operating activities:
    Net income                                                                                  $1,921               $15,116
    Adjustments to reconcile net earnings to net
    cash provided by operating activities:
         Equity loss in HoustonStreet investment                                                     0                   450
         Depreciation and amortization                                                           1,880                 1,995
         Amortization of nuclear fuel                                                            2,070                 2,070
         Unrealized gain on firm energy trading contracts                                            0               (13,320)
         Non-cash compensation expense                                                             563                     0
         Decommissioning trust accretion                                                         2,463                 1,630
         Decommissioning trust interest and other charges                                         (806)                 (439)
         (Increase) decrease in accounts and other receivable                                    1,645                (3,024)
         (Increase) decrease in materials & supplies                                                 4                    (4)
         Increase in prepaids, deferred debits and other assets                                   (166)               (1,435)
         Decrease in accounts payable and accrued expenses                                      (1,368)               (6,722)
         Increase (decrease) in misc. and other liabilities                                     (3,181)                5,439
                                                                                    -------------------   -------------------
Net cash provided by operating activities                                                        5,025                 1,756

Net cash flows from investing activities:
  Capital additions                                                                               (794)                 (902)
  Nuclear fuel additions                                                                           (98)                 (126)
  Payments to decommissioning fund                                                                (697)               (1,308)
  Investment in HoustonStreet                                                                        0                  (450)
  Decrease in restricted cash                                                                    1,546                 1,784
  Purchases of short term investments                                                          (16,625)                    0
  Sales of short term investments                                                                1,857                 2,808
                                                                                    -------------------   -------------------
Net cash (used in) provided by investing activities                                            (14,811)                1,806

Net cash from financing activities:
  Stock option exercise                                                                            153                     0
  Reacquired capital stock                                                                        (376)                    0
  Other investments                                                                                  0                     0
                                                                                    -------------------   -------------------
Net cash used in financing activities                                                             (223)                    0

Net increase (decrease) in cash and cash equivalents                                           (10,009)                3,562
Cash and cash equivalents, beginning of period                                                  15,278                 9,071
                                                                                    -------------------   -------------------
Cash and cash equivalents, end of period                                                        $5,269               $12,633
                                                                                    ===================   ===================
Supplemental Disclosure of Cash Flow Information:
  Cash paid for income taxes                                                                      $705                   $14
Supplemental Disclosure of Non-cash Financing Activities:
  Stock option exercise in exchange for promissory notes                                          $737                    $0
</TABLE>


 (The accompanying notes are an integral part of these consolidated statements.)



                                       6
<PAGE>
                             BAYCORP HOLDINGS, LTD.



EXPLANATORY NOTE

       This Form 10-Q/A amends BayCorp Holdings, Ltd.'s quarterly report on Form
10-Q for the quarter ended June 30, 2002 filed on August 13, 2002 and is being
filed to reflect amendments disclosed in the Company's Form 10-K/A for the
period ended December 31, 2001 filed January 30, 2003. The June 30, 2002 Form
10-Q is amended to (i) reflect an increase in paid in capital and an increase in
accumulated deficit of approximately $6.7 million as a result of the change in
2000 in the value of the Company's investment in HoustonStreet Exchange, Inc.
("HoustonStreet"); this increase in the Company's investment in HoustonStreet
increased the Company's 2000 loss by approximately $6.7 million, (ii) reflect an
increase in accumulated deficit of approximately $210,000 for a net increase in
2001 and 2000 general and administrative expenses including compensation costs
related to repriced and accelerated options, (iii) reflect an increase in
accumulated deficit of $225,000 based on actual taxes incurred in 2001, and (iv)
reclassify decommissioning accretion and decommissioning interest on the
consolidated statements of income from other income/deductions to operating
expenses for all periods presented. These restatements are all non-cash
adjustments to the Company's financial statements. The amendments also include
minor financial statement reclassifications and other modifications to the
footnotes. This report speaks as of the original filing date and, except as
indicated, has not been updated to reflect events occurring subsequent to the
original filing date.

                          NOTES TO FINANCIAL STATEMENTS

NOTE A - THE COMPANY

      BayCorp Holdings, Ltd. ("BayCorp" or the "Company") is a holding company
incorporated in Delaware in 1996. BayCorp owns two subsidiaries that generate
and sell wholesale electricity, Great Bay Power Corporation ("Great Bay") and
Little Bay Power Corporation ("Little Bay"), each of which is wholly-owned as of
June 30, 2002. In addition, BayCorp owns 46.4% of HoustonStreet Exchange, Inc.
("HoustonStreet"), an Internet-based independent crude oil and refined products
trading exchange.

      Great Bay and Little Bay generate and sell wholesale electricity. Their
principal asset is a combined 15% joint ownership interest in the Seabrook
Nuclear Power Project in Seabrook, New Hampshire (the "Seabrook Project" or
"Seabrook"). This ownership interest entitles the companies to approximately 174
megawatts ("MWs") of the Seabrook Project's power output. Great Bay and Little
Bay are exempt wholesale generators ("EWGs") under the Public Utility Holding
Company Act of 1935 ("PUHCA"). Unlike regulated public utilities, Great Bay and
Little Bay have no franchise area or captive customers. The companies sell their
power in the competitive wholesale power markets. HoustonStreet, an equity
investment of BayCorp, developed and operates HoustonStreet.com.

      In October 2000, the Company announced that it reached an agreement with
Northeast Utilities ("NU") under which the Company's generating subsidiaries,
Great Bay and Little Bay, will include their aggregate 15% ownership share of
the Seabrook Project in the current auction of NU's subsidiaries' shares of the
Seabrook Project. Under the terms of the agreement, BayCorp will receive the
sales price established by the auction process. In the event that the sale
yields proceeds for BayCorp of more than $87.2 million, BayCorp and NU will
share the excess proceeds. Should BayCorp's sales proceeds be less than $87.2
million, NU will make up the difference below that amount on a dollar for dollar
basis up to a maximum of $17.4 million. Under the agreement, BayCorp will be
paid separately for nuclear fuel and inventory. The agreement also limits any
top-off amount required to be funded by BayCorp for decommissioning as part of
the sale process at the amount required by the Nuclear Regulatory Commission
("NRC") regulations.



                                       7
<PAGE>
                             BAYCORP HOLDINGS, LTD.



      On April 15, 2002, the Company announced that BayCorp and other selling
owners reached an agreement with FPL Group, Inc. ("FPL Group") for the sale of
approximately 88% of the Seabrook Project. Under the terms of the purchase and
sale agreement and BayCorp's agreement with NU, Baycorp expects to receive
approximately $117 million for its 15% ownership interest in Seabrook, nuclear
fuel and inventory. This amount assumes a December 31, 2002 closing and is based
upon expected balances for nuclear fuel and inventory and other purchase price
adjustments. This amount is net of the sharing of proceeds with NU under the
October 2000 agreement and also net of any top-off amount required to fund
BayCorp's share of the Seabrook decommissioning liability. Under the terms of
the agreement with FPL Group, BayCorp and the other selling owners are required
to top-off the decommissioning trust fund to ensure that the decommissioning
fund balance is sufficient to satisfy the requirements of the New Hampshire
Decommissioning Financing Committee ("NDFC") at the time of closing. The
decommissioning top off and the amount received for nuclear fuel and inventory
are subject to adjustment to reflect actual values at the time of closing.

      As part of the sale, BayCorp will transfer to FPL Group nearly all of its
liabilities associated with Seabrook, including the decommissioning liability.
BayCorp will retain all of its cash and other assets in addition to the sale
proceeds. In addition to the sale proceeds, on December 31, 2002 BayCorp expects
to have net working capital of approximately $22-$25 million assuming a 92%
capacity factor for the balance of the year. This figure includes a reduction
for expected tax liabilities and an increase for the cash that would be received
by the company upon the exercise of all outstanding stock options. Other assets
of BayCorp include an above market power sales contract, an equity interest in
HoustonStreet and expected net operating loss carryforwards of approximately $70
million after the sale of the Seabrook interests. Assuming the exercise of all
options currently outstanding, BayCorp would have approximately 9.49 million
shares outstanding. The sale is subject to BayCorp shareholder approval and
various regulatory approvals, including the New Hampshire Public Utilities
Commission ("NHPUC"), the Connecticut Department of Public Utility Control
("CDPUC"), the Federal Energy Regulatory Commission ("FERC") and the NRC.
BayCorp expects the closing to occur around the end of 2002.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The unaudited financial statements included herein have been prepared on
behalf of the Company pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted or condensed
pursuant to such rules and regulations. The Company believes, however, its
disclosures herein, when read in conjunction with the Company's audited
financial statements for the year ended December 31, 2001 as filed in Form
10-K/A, are adequate to make the information presented not misleading. The
Company's significant accounting policies are described in Note 1 of Notes to
Consolidated Financial Statements included in the Company's 10-K/A. The results
for the interim periods are not necessarily indicative of the results to be
expected for the full fiscal year.

      Previously, Great Bay utilized unit contingent and firm forward sales
contracts to maximize the value of its 174 MW power supply from the Seabrook
Project. The Company follows the provisions of SFAS 133 Accounting for
Derivative Activities and Hedging Activities. The Company marked the related
contracts to market based on the estimated contract replacement value at each
balance sheet date. The Company had not entered into any forward firm energy
contracts as of June 30, 2002, nor does it



                                       8
<PAGE>
                             BAYCORP HOLDINGS, LTD.




expect to in 2002, in light of its expected sale of its ownership interest in
the Seabrook Project in 2002. As a result, as of June 30, 2002, the Company had
no unrealized loss or gain on the mark-to-market of forward firm energy
contracts recorded in accrued expenses. The net change in unrealized gain/loss
on firm forward energy contracts included in the accompanying consolidated
statements of income for the quarters ended June 30, 2002 and June 30, 2001 was
$0 and a gain of approximately $7,006,000, respectively, and for the six months
ended June 30, 2002 and June 30, 2001 was $0 and a gain of approximately
$13,320,000, respectively.

NOTE C - COMMITMENTS AND CONTINGENCIES

Nuclear Power, Energy and Utility Regulation

      The Seabrook Project and Great Bay and Little Bay, as part owners of a
licensed nuclear facility, are subject to the broad jurisdiction of the NRC,
which is empowered to authorize the siting, construction and operation of
nuclear reactors after consideration of public health and safety, environmental
and antitrust matters. Great Bay and Little Bay have been, and will be, affected
to the extent of their proportionate share by the cost of any such requirements
made applicable to the Seabrook Project.

      Great Bay and Little Bay are also subject to the jurisdiction of the FERC
under Parts II and III of the Federal Power Act and, as a result, are required
to file with FERC all contracts for the sale of electricity. FERC has the
authority to suspend the rates at which Great Bay and Little Bay propose to sell
power, to allow such rates to go into effect subject to refund and to modify a
proposed or existing rate if FERC determines that such rate is not "just and
reasonable." FERC's jurisdiction also includes, among other things, the sale,
lease, merger, consolidation or other disposition of facilities, interconnection
of certain facilities, account and services and property records.

      Because they both are EWG's, Great Bay and Little Bay are not subject to
the jurisdiction of the SEC under PUHCA. In order to maintain their EWG status,
Great Bay and Little Bay must continue to engage exclusively in the business of
owning and/or operating all or part of one or more "eligible facilities" and to
sell electricity only at wholesale (i.e. not to end users) and activities
incidental thereto. An "eligible facility" is a facility used for the generation
of electric energy exclusively at wholesale or used for the generation of
electric energy and leased to one or more public utility companies. The term
"facility" may include a portion of a facility. In the case of Great Bay and
Little Bay, their combined 15% joint ownership interest in the Seabrook Project
comprises an "eligible facility."

Utility Deregulation; Public Controversy Concerning Nuclear Power Plants

      The NHPUC and the regulatory authorities with jurisdiction over utilities
in New Hampshire and state legislatures of several other states in which Great
Bay and Little Bay sell electricity are considering or are implementing
initiatives relating to the deregulation of the electric utility industry.
Simultaneously with the deregulation initiatives occurring in each of the New
England states, the New England Power Pool ("NEPOOL") restructured to create and
maintain open, non-discriminatory, competitive, unbundled markets for energy,
capacity, and ancillary services. All of the deregulation initiatives open
electricity markets to competition in the affected states. While Great Bay and
Little Bay believe they are low-cost producers of electricity and will benefit
from the deregulation of the electric industry, it is not possible to predict
the impact of these various initiatives on the companies.



                                       9
<PAGE>
                             BAYCORP HOLDINGS, LTD.




      Nuclear units in the United States have been subject to widespread
criticism and opposition, which has led to construction delays, cost overruns,
licensing delays and other difficulties. Various groups have sought to prohibit
the completion and operation of nuclear units and the disposal of nuclear waste
by litigation, legislation and participation in administrative proceedings. The
Seabrook Project was the subject of significant public controversy during its
construction and licensing and remains controversial. An increase in public
concerns regarding the Seabrook Project or nuclear power in general could
adversely affect the operating license of Seabrook Unit 1. While the Company
cannot predict the ultimate effect of such controversy, it is possible that it
could result in a premature shutdown of the unit.

      In the event of a permanent shutdown of any unit, NRC regulations require
that the unit be completely decontaminated of any residual radioactivity. While
the owners of the Seabrook Project are accumulating monies in a trust fund to
pay decommissioning costs, if these costs exceed the amount of the trust fund,
the current owners at such time will be liable for the excess.

Decommissioning Liability

      Based on the Financial Accounting Standards Board's ("FASB") tentative
conclusions, reflected on the February 7, 1996 Exposure Draft titled "Accounting
for Certain Liabilities Related to Closure and Removal of Long-Lived Assets,"
Great Bay and Little Bay have recognized as a liability their proportionate
share of the present value of the estimated cost of Seabrook Project
decommissioning. For Great Bay, the initial recognition of this liability was
capitalized as part of the Fair Value of the Utility Plant at November 23, 1994.
For Little Bay, the amount was provided for in the purchase price allocation at
the date Little Bay acquired its interest in Seabrook.

      New Hampshire enacted a law in 1981 requiring the creation of a
state-managed fund to finance decommissioning of any nuclear units in the state.
The Seabrook Project's decommissioning estimate and funding schedule is subject
to review each year by the NDFC. This estimate is based on a number of
assumptions. Changes in assumptions for such things as labor and material costs,
technology, inflation and timing of decommissioning could cause these estimates
to change, possibly materially, in the near term. In November 2001, the NDFC
issued an order that established a decommissioning funding schedule in
anticipation of the sale of a majority of the ownership interests in Seabrook.
The NDFC set an accelerated funding schedule for the years 2002 through 2006.
For the years 2007 and beyond, the funding schedule assumes contributions will
be made until 2026. The order also established the requirement for a lump sum
"top-off" payment at closing. The current estimated cost to decommission the
Seabrook Project (based on NDFC Docket 2001-1) is approximately $555.6 million
in 2001 dollars, assuming for decommissioning purposes, a remaining 25-year life
for the facility and a future cost escalation of 5.25% per year. The Company's
pro-rata share of this estimated cost of decommissioning as of June 30, 2002 was
approximately $88 million.

      The Staff of the SEC has questioned certain of the current accounting
practices of the electric utility industry regarding the recognition,
measurement and classification of decommissioning costs for nuclear generating
stations and joint owners in the financial statements of these entities. In
response to these questions, the FASB agreed to review the accounting for
nuclear decommissioning costs and, as a result, in August 2001, the FASB
approved the issuance of Statement of Financial Accounting Standards (SFAS) No.
143, "Accounting for Retirement Obligations." SFAS No. 143 provides accounting
requirements for the recognition and measurement of liabilities associated with
the retirement of long-lived assets and requires entities to record the fair
value of a liability for an asset retirement obligation in the period in which
it is incurred. Great Bay's and Little Bay's accounting for decommissioning is
based

                                       10
<PAGE>
                             BAYCORP HOLDINGS, LTD.




on the initial FASB exposure draft. The new statement requires that an
obligation associated with the retirement of a tangible long-lived asset be
recognized as a liability when incurred, and that the amount of the liability
resulting from (a) the passage of time and (b) revisions to either the timing or
amount of estimated cash flows should also be recognized. The new statement also
requires that, upon initial recognition of a liability for an asset retirement
obligation, an entity capitalize that cost by recognizing an increase in the
carrying amount of the related long-lived asset.

      The new statement requires the initial measurement of the liability to be
based on fair value, where the fair value is the amount that an entity would be
required to pay in an active market to settle the asset retirement obligation in
a current transaction in circumstances other than a forced liquidation or
settlement. Because in most circumstances, a market for settling asset
retirement obligations does not exist, the FASB described an expected present
value technique for estimating fair value. If the new statement is adopted,
Great Bay's and Little Bay's decommissioning liability and annual provision for
decommissioning accretion could change relative to 2002. The new statement is
effective for the Company on January 1, 2003. Great Bay and Little Bay have not
quantified the impact, if any, that the new statement will have on the
consolidated financial statements.

      Great Bay and Little Bay, based on the initial FASB exposure draft, have
been recognizing a liability based on the present value of the estimated future
cash outflows required to satisfy their obligations using a risk free rate. As
of June 30, 2002, the estimated undiscounted cash outflows for Great Bay and
Little Bay, for decommissioning, based on the November 2001 NDFC study, with
decommissioning expenditures starting in 2024 and being completed in 2046, was
$418.3 million, which discounted at an average rate of 5.25%, over the funding
period, to June 30, 2002, represented a liability of approximately $88 million
reflected in the accompanying balance sheet. In accordance with the initial FASB
exposure draft, the company's wholly-owned subsidiaries record any adjustments
to the decommissioning liability due to changes in estimates in the utility
plant account.

      Great Bay and Little Bay accrete their share of the Seabrook Project's
decommissioning liability. This accretion is a non-cash charge and recognizes
their liability related to the closure and decommissioning of their nuclear
plant in current year dollars over the licensing period of the plant. The
non-cash accretion charge recorded in the accompanied consolidated statements of
income was $1,232,000 and $815,000 for the three months ended June 30, 2002 and
June 30, 2001, respectively and $2,463,000 and $1,630,000 for the six months
ended June 30, 2002 and June 30, 2001, respectively. The change in the accretion
between years reflects adjustments to the estimated cost of decommissioning by
the NDFC.

      Funds collected by Seabrook for decommissioning are deposited in an
external irrevocable trust pending their ultimate use. The earnings on the
external trusts also accumulate in the fund balance. The trust funds are
restricted for use in paying the decommissioning of Unit 1. The investments in
the trusts are recorded as investments available for sale. Great Bay and Little
Bay have therefore reported their investment in trust fund assets at market
value and any unrealized gains and losses are reflected in equity. There was an
unrealized holding loss of approximately $532,000 as of June 30, 2002.

      Although the owners of Seabrook are accumulating funds in an external
trust to defray decommissioning costs, these costs could substantially exceed
the value of the trust fund, and the owners, including Great Bay and Little Bay,
would remain liable for the excess.



                                       11
<PAGE>
                             BAYCORP HOLDINGS, LTD.




      In June 1998, the New Hampshire State legislature enacted legislation that
provides that in the event of a default by Great Bay on its payments to the
decommissioning fund, the other Seabrook joint owners would be obligated to pay
their proportional share of such default. As a result of the enactment of this
legislation, the staff of the NRC notified Great Bay in July 1998 of the staff's
determination that Great Bay complies with the decommissioning funding assurance
requirements under NRC regulations.

      In response to the obligations imposed on the other joint owners under the
New Hampshire legislation, Great Bay agreed to make accelerated payments to the
Seabrook decommissioning fund such that Great Bay will have contributed
sufficient funds by the year 2015 to allow sufficient monies to accumulate, with
no further payments by Great Bay to the fund, to the full estimated amount of
Great Bay's decommissioning obligation by the time the current Seabrook
operating license expires in 2026. Based on the currently approved funding
schedule and Great Bay's accelerated funding schedule, Great Bay's
decommissioning payments will be approximately $1.4 million in 2002 and would
escalate at 4% each year thereafter through 2015. Little Bay's share of
decommissioning costs was prefunded by Montaup, the owner of the 2.9% interest
in the Seabrook Project that Little Bay acquired in November 1999, and as such,
periodic payments have not been required. As part of that acquisition, Montaup
transferred approximately $12.4 million into Little Bay's decommissioning
account, an irrevocable trust earmarked for Little Bay's share of Seabrook
decommissioning expenses. As of June 30, 2002 the fair market value of the
Little Bay decommissioning account was approximately $13.6 million.

      On November 15, 1992, Great Bay and its predecessor's former parent,
Eastern Utilities ("EUA") entered into a settlement agreement that resolved
certain proceedings against EUA. Under the settlement agreement in 1992, EUA
agreed to guarantee up to $10 million of Great Bay's future decommissioning
costs of Seabrook Unit 1.

NOTE D - INVESTMENT IN HOUSTONSTREET

      As of December 31, 1999, the Company owned 100% of HoustonStreet. During
2000, HoustonStreet raised additional equity from outside investors and as a
result the Company's ownership fell below 50%. Subsequently, the Company wrote
its investment in HoustonStreet down to zero and suspended recognition of
additional HoustonStreet losses. Prior year financial statements are presented
in conformance with the equity method of accounting. Prior to the
deconsolidation, the Company recognized its share of the losses of HoustonStreet
in the consolidated financial statements. Summarized financial information for
the Company's investment in HoustonStreet, as accounted for by the equity
method, is as follows:

      HoustonStreet:

<TABLE>
<CAPTION>
                                      Six Months           Year ended            Year ended
                                    ended June 30,         December 31,          December 31,
                                         2002                  2001                 2000
                                    --------------         ------------          ------------
<S>                                 <C>                    <C>                   <C>
Total Assets ...............         $  1,070,500          $  1,256,400          $ 11,958,600
Total Liabilities ..........           14,577,300            14,784,100            15,395,800
Commission Revenues ........              516,300             1,899,500               523,400
Other Revenues .............              725,000                    --                    --
Net Loss ...................             (150,300)          (14,936,900)          (40,046,800)
Company's Equity in net loss              (69,700)           (6,856,000)          (22,259,000)
</TABLE>



                                       12
<PAGE>
                             BAYCORP HOLDINGS, LTD.




      As of June 30, 2002, the Company had no investments or receivables from
HoustonStreet recognized on the accompanying balance sheet. The Company
suspended recognition of equity losses beginning in 2000 after its ownership in
HoustonStreet fell below 50%. The Company has no obligations to further fund
HoustonStreet.

NOTE E - EQUITY

      BayCorp has never paid cash dividends on its common stock. Any future
dividends depend on future earnings, BayCorp's financial condition and other
factors.

      In March 2002, in connection with the exercise of stock options, the
Company received limited recourse promissory notes and stock pledge agreements
from its President, Frank Getman, and a director, John Tillinghast. Mr. Getman
was given two separate loans dated March 27, 2002, one for $167,502 and one for
$108,123. On March 7, 2002, Mr. Tillinghast was given a loan for $461,502. The
loans are secured by stock pledge agreements between the individuals and the
Company. The notes, which were approved by the Company's full board of
directors, bear interest at 5%. The notes and agreements were executed in order
to allow for the exercise of certain stock options before they expired. The
notes were given in lieu of cash payments for the exercise price of the options.
The total exercise price of these options was $737,127. Mr. Getman has pledged
56,250 shares under his agreements and Mr. Tillinghast has pledged 94,184 shares
under his agreement. The notes are due on the earlier of (i) December 31, 2003
or (ii) 30 days after the payment to Great Bay, Little Bay and BayCorp or its
common shareholders, as the case may be, of the proceeds of the sale of (a)
Great Bay's and Little Bay's interests in the Seabrook Project or (b) BayCorp
shares of capital stock of Great Bay and Little Bay or (c) the outstanding
shares of capital stock of BayCorp by merger, share exchange or otherwise. The
security agreements provide that the borrowers must maintain at least two times
the principal loan value in the event of partial repayments. The Company has no
agreements, formal or informal, to forgive the loans or change the terms on the
loans.

      Upon maturity, the outstanding balance, and all accrued but unpaid
interest, shall be due and payable in full. The Company's current expectation is
that the Company's sale of its Seabrook asset will take place on November 1,
2002, with proceeds transferred at that time. The promissory notes issued to Mr.
Getman and Mr. Tillinghast will be repaid within 30 days of this closing, or on
or before December 1, 2002. The loans have been reflected in the accompanying
balance sheet as a reduction in equity as required by generally accepted
accounting principles. Compensation expense related to the exercise of these
stock options is measured based on the current market price of the Company's
common stock and the number of options exercised.

      Unrealized gains (losses) on securities held by the Company in its
decommissioning trust fund and short-term investment accounts are recorded as
Accumulated Other Comprehensive Income in the Company's balance sheet.
Accumulated other comprehensive income and the current period charge are as
follows:

<TABLE>
<CAPTION>
                                 Accumulated Other
                                Comprehensive Income
                                --------------------
<S>                             <C>
Beginning Balance ...                $ 223,000
Current Period Charge                 (701,000)
                                     ---------
Ending Balance ......                $(478,000)
                                     =========
</TABLE>

NOTE F - NEW ACCOUNTING PRONOUNCEMENTS

      SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," requires that long-lived assets held and
used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In performing the review of the recoverability, the entity should
estimate the future cash flows expected to result from the use of the asset and
its eventual disposition. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, an impairment loss is recognized. Otherwise, an impairment loss is
not recognized. This statement requires that long-lived assets and certain
identifiable intangibles to be disposed of be

                                       13
<PAGE>
                             BAYCORP HOLDINGS, LTD.




reported at the lower of carrying amount or fair value less cost to sell. The
sales agreement with NU established a minimum expected value for the Company's
investment in the Seabrook plant and the expected deal with FPL Group
established a fair value. The Company estimates that the current carrying amount
for the respective investment is the lower of the carrying amount or fair value
less cost to sell in accordance with SFAS No. 121.

      In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-lived Assets," which replaces SFAS No. 121. This
new statement addresses financial accounting and reporting for the impairment or
disposal of long-lived assets. Although SFAS No. 144 supersedes SFAS No. 121, it
retains the fundamental provisions of SFAS No. 121 regarding measurement of
long-lived assets to be disposed of by sale. Under SFAS No. 144, asset
write-downs from discontinuing a business segment will be treated the same as
other assets held for sale. The new statement also broadens the financial
statement presentation of discontinued operations to include the disposal of an
asset group (rather than a segment of a business segment.) SFAS No. 144 was
effective beginning January 1, 2002. The initial adoption of SFAS No. 144 did
not have an impact on the Company's financial position or results of operations.

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

Overview

      BayCorp derives substantially all of its revenue through its energy sales
activities and its 100% equity interest in Great Bay and Little Bay. Great Bay
and Little Bay are electric generating companies whose principal asset is a
combined 15% joint ownership interest in the Seabrook Project.

      The following discussion focuses solely on operating revenues and
operating expenses that are presented in a substantially consistent manner for
all of the periods presented.

Results of Operations: Second Quarter of 2002 Compared to the Second Quarter of
2001

Operating Revenues

      BayCorp's operating revenues decreased by approximately $9,344,000, or
48%, to $10,126,000 in the second quarter of 2002 as compared to $19,470,000 in
the second quarter of 2001. The decrease in operating revenues was primarily
attributable to a decrease in the Seabrook capacity factor due to the May 2002
refueling outage. The Seabrook capacity factor for the second quarter of 2002
was 66.7% as compared to 99.3% for the second quarter of 2001. During the second
quarter of 2002, Seabrook conducted a twenty-eight day refueling outage from May
4th to May 31st. The twenty-eight day outage represents the shortest refueling
outage in Seabrook's operating history. There was no refueling outage in the
second quarter of 2001. BayCorp incurs losses as a result of scheduled and
unscheduled outages, including scheduled refueling outages, due to the
combination of loss of revenue and recognition of normal recurring operating and
maintenance costs, depreciation and costs associated with the outage.

      During the three months ended June 30, 2002, Great Bay's average selling
price decreased 1.7%, to 3.98 cents per kilowatt hour ("kWh") as compared to an
average selling price of 4.05 cents per kWh for the same period in 2001. Sales
of electricity decreased by approximately 47.1% to 254,671,000 kWhs during the
second quarter of 2002 as compared to approximately 481,662,000 kWhs in the
second

                                       14
<PAGE>
                             BAYCORP HOLDINGS, LTD.




quarter of 2001. The decrease in kWhs sold was primarily attributable to the
loss of Seabrook generation during the scheduled refueling outage that took
place in the second quarter of 2002.

Expenses

      Production and transmission expenses increased approximately $1,340,000,
or 23.2%, to $7,123,000 in the second quarter of 2002 as compared to $5,783,000
in the second quarter of 2001. This increase was primarily attributable to costs
associated with the refueling outage in the second quarter of 2002. There was no
refueling outage in the second quarter of 2001. Purchased power costs decreased
approximately $3,518,000, from $3,589,000 in the second quarter of 2001 to
$71,000 in the second quarter of 2002. During the second quarter of 2001, Great
Bay purchased power for resale pursuant to a Purchase Power Agreement with
Select Energy. There were no significant power purchases made during the second
quarter of 2002. Administrative and general expenses increased approximately
$906,000, or 66.5%, to $2,269,000 in the second quarter of 2002 as compared to
$1,363,000 in the second quarter of 2001. This increase was attributable in part
to higher administrative and general expenses at Seabrook during the second
quarter of 2002 as compared to the second quarter of 2001. Also in the second
quarter of 2002, the Company recorded $209,000 in non-cash compensation costs
for employee stock option costs relating to options that were repriced in 1998.
In addition, during the second quarter of 2002, the Company recorded $323,000 in
non-cash compensation costs for certain options exercised in 2002. See Note E -
Equity. Depreciation expense decreased approximately $59,000, or 5.9%, and taxes
other than income decreased approximately $12,000, or 1.3%, during the second
quarter of 2002 as compared to the same period in 2001.

      In the second quarter of 2001, Great Bay recorded unrealized gains on firm
forward energy sales contracts of $7,006,000. The unrealized gain in the second
quarter of 2001 was due in part to Great Bay committing to sell less power under
firm forward contracts as of June 30, 2001 as compared to December 31, 2000. As
of December 31, 2001 all firm energy sales contracts had been fulfilled. The
Company currently has no firm energy sales contracts. Sales for the quarter
ended June 30, 2002 were made on a unit contingent basis as opposed to firm
sales and as such, there was no replacement power risk and no unrealized gain or
loss to be recorded.

      Decommissioning cost accretion increased $417,000, or 51.2%, to $1,232,000
in the second quarter of 2002 as compared to $815,000 in the second quarter of
2001. This accretion is a non-cash charge that reflects Great Bay's liability
related to the closure and decommissioning of the Seabrook Project in current
year dollars over the period during which the Seabrook Project is licensed to
operate. The change in accretion between periods reflects adjustments to the
estimated decommissioning cost by the NDFC. Other income increased approximately
$127,000, to $131,000 in the second quarter of 2002 as compared to $4,000 in
other income in the second quarter of 2001.

Net Income

      As a result of the above factors, during the second quarter of 2002, the
Company recorded a net loss of approximately $1,723,000, or a loss of
approximately $0.20 per share, as compared to net income of approximately
$13,543,000, or income of approximately $1.63 per share, during the second
quarter of 2001.

Results of Operations: First Six Months of 2002 Compared to the First Six Months
of 2001



                                       15
<PAGE>
                             BAYCORP HOLDINGS, LTD.




Operating Revenues

      BayCorp's operating revenues decreased by approximately $13,243,000, or
34.2%, to $25,494,000 in the first six months of 2002 as compared to $38,737,000
in the first six months of 2001. The decrease in operating revenues was
primarily attributable to lower sales of electricity in the six months ended
June 30, 2002 as compared to sales of electricity in the six months ended June
30, 2001. Sales of electricity decreased by approximately 27.4% to 632,709,000
kWhs in the first six months of 2002 as compared to approximately 872,431,000
kWhs in the first six months of 2001. The Seabrook capacity factor for the first
six months of 2002 was 83.3% as compared to 75.1% for the first six months of
2001. Though Seabrook generation was lower in the first six months of 2001, due
to unscheduled outages for maintenance and repairs, the Company purchased a
significant amount of power for resale during the first six months of 2001 as
compared to the same period in 2002. For the six months ended June 30, 2002,
purchased power expenses were $263,000 as compared to $17,327,000 for the six
months ended June 30, 2001. During the six months ended June 30, 2002, Great
Bay's average selling price decreased 9.2%, to 4.03 cents per kWh as compared to
an average selling price of 4.44 cents per kWh for the same period in 2001.

Expenses

      Production and transmission expenses increased approximately $2,484,000,
or 21.7%, to $13,957,000 in the first six months of 2002 as compared to
$11,473,000 in the first six months of 2001. This increase was primarily
attributable to costs associated with the refueling outage in the first six
months of 2002. Purchased power costs decreased approximately $17,064,000, from
$17,327,000 in the six months ended June 30, 2001 to $263,000 in the six months
ended June 30, 2002. During the six months ended June 30, 2001, Great Bay
purchased power for resale to cover firm sales contracts during unscheduled
outages in addition to purchasing power for resale pursuant to a Purchase Power
Agreement with Select Energy. There were no firm power sales contracts and there
were no significant power purchases made during the six months ended June 30,
2002. Administrative and general expenses increased approximately $1,075,000, or
33.8%, to $4,253,000 in the first six months of 2002 as compared to $3,178,000
in the first six months of 2001. This increase was attributable in part to
higher administrative and general expenses at Seabrook during the first six
months of 2002 as compared to the first six months of 2001. In addition, during
the six months ended June 30, 2002, the Company recorded $240,000 in non-cash
compensation costs for employee stock option costs relating to options that were
repriced in 1998. Also during the six months ended June 30, 2002, the Company
recorded $323,000 in non-cash compensation costs for certain options exercised
during the six month period. See Note E - Equity. Depreciation expense decreased
approximately $115,000, or 5.8%, and taxes other than income decreased
approximately $104,000, or 5.4%, during the first six months of 2002 as compared
to the same period in 2001.

      In the six months ended June 30, 2001, Great Bay recorded unrealized gains
on firm forward energy sales contracts of $13,320,000. The unrealized gain in
the first six months of 2001 was due in part to Great Bay committing to sell
less power under firm forward sales contracts as of June 30, 2001 as compared to
December 31, 2000. As of December 31, 2001 all firm energy sales contracts had
been fulfilled. The Company currently has no firm energy sales contracts. Sales
for the six months ended June 30, 2002 were made on a unit contingent basis as
opposed to firm sales and as such, there was no replacement power risk and no
unrealized gain or loss to be recorded.



                                       16
<PAGE>
                             BAYCORP HOLDINGS, LTD.




      Decommissioning cost accretion increased $833,000, or 51.1%, to $2,463,000
in the six months ended June 30, 2002 as compared to $1,630,000 in the six
months ended June 30, 2001. This accretion is a non-cash charge that reflects
Great Bay's liability related to the closure and decommissioning of the Seabrook
Project in current year dollars over the period during which the Seabrook
Project is licensed to operate. The change in accretion between periods reflects
adjustments to the estimated decommissioning cost by the NDFC.

      BayCorp made no investments in HoustonStreet in the first six months of
2002. BayCorp contributed $450,000 to HoustonStreet in the first six months of
2001 and recorded this contribution as an equity loss in investment.

Net Income

      As a result of the above factors, the Company recorded net income of
approximately $1,921,000, or income of approximately $0.23 per share, for the
first six months of 2002 as compared to net income of approximately $15,116,000,
or approximately $1.81 per share, for the first six months of 2001.

Liquidity and Capital Resources

      As of June 30, 2002, BayCorp had approximately $20,447,000 in cash and
cash equivalents, restricted cash and short-term investments. Approximately
$14,821,000 of the total cash was in short term investments at June 30, 2002.
BayCorp's cash generation for the six months ended June 30, 2002 was sufficient
to cover the ongoing cash requirements of the Company during that period. The
Company believes that its current cash, together with the anticipated proceeds
from the sale of electricity by Great Bay and Little Bay, will be sufficient to
enable the Company to meet its anticipated cash requirements. However, if the
Seabrook Project operates at a capacity factor significantly below historical
levels, or if expenses associated with the ownership or operation of the
Seabrook Project are materially higher than anticipated, or if the prices at
which Great Bay is able to sell its share of the Seabrook Project electricity
decrease significantly from current levels, BayCorp or Great Bay could be
required to raise additional capital, either through a debt financing or an
equity financing, to meet ongoing cash requirements. There can be no assurance
that BayCorp or Great Bay will be able to raise additional capital on acceptable
terms or at all.

      The Company had net income of approximately $1,921,000 during the first
six months ended June 30, 2002. Cash expenditures during the first six months of
2002 included approximately $794,000 for capital additions, $98,000 for nuclear
fuel additions and $697,000 in decommissioning trust fund payments. Additional
cash expenditures included a decrease in accounts payable and accrued expenses
of approximately $1,368,000, primarily attributable to payments made in the
first quarter of 2002 for purchased power that was included in the December 31,
2001 accounts payable balance. A decrease of approximately $3,181,000 in
miscellaneous and other liabilities in the first six months of 2002 was
primarily attributable to costs associated with the Seabrook refueling outage
that were partially accrued for and included in other liabilities. In the first
six months of 2002, the Company repurchased 41,329 shares of its stock for
approximately $376,000.

      Offsetting these cash expenditures were non-cash charges to income of
approximately $1,880,000 for depreciation and amortization, $2,070,000 for
nuclear fuel amortization and $1,657,000 for net decommissioning accretion and
decommissioning trust fund interest and other charges. In addition, there was a
decrease in accounts receivable of approximately $1,645,000 in the first six
months

                                       17
<PAGE>
                             BAYCORP HOLDINGS, LTD.




of 2002 due to higher revenues in the month of December 2001 as compared to
revenues in the month of June 2002.

      During the first six months of 2002, the Company recorded a non-cash
compensation charge of approximately $240,000 for employee stock option costs
relating to repriced options. Certain employee stock options were repriced in
December 1998 based on the current market value of the stock at that time. In
accordance with generally accepted accounting principles, these options are
accounted for as a variable plan which gives rise to compensation expense for
subsequent increases in the market price of the stock. Also during the first six
months of 2002, the Company recorded a non-cash compensation charge of
approximately $323,000 for certain options exercised during the period as
required by generally accepted accounting principles. See Note E - Equity.

      In the first six months of 2002, cash received from stock option exercise
transactions was $153,000.

      The Company anticipates that its share of the Seabrook Project's capital
expenditures for the 2002 fiscal year will total approximately $5.8 million for
nuclear fuel and various capital projects.

      The Seabrook Project from time to time experiences both scheduled and
unscheduled outages. BayCorp incurs losses during outage periods due to the loss
of all revenue from the sale of generation and additional costs associated with
the outages as well as continuing operating and maintenance expenses and
depreciation. Unscheduled outages or operation of the unit at reduced capacity
can occur due to the automatic operation of safety systems following the
detection of a malfunction. In addition, it is possible for the unit to be shut
down or operated at reduced capacity based on the results of scheduled and
unscheduled inspections and routine surveillance by Seabrook Project personnel.
It is not possible for BayCorp to predict the frequency or duration of any
future unscheduled outages; however, it is likely that such unscheduled outages
will occur. Refueling outages are generally scheduled every 18 months depending
upon the Seabrook Project capacity factor and the rate at which the nuclear fuel
is consumed. During the second quarter of 2002, Seabrook conducted a
twenty-eight day refueling outage from May 4th to May 31st. The Company's
portion of refueling outage and maintenance expenses for the 2002 refueling
outage were approximately $5,306,000.

      With continued uncertainty about the possibility of additional terrorist
activities in the United States, the Nation's nuclear power plants, including
the Seabrook Project, remain at a high level of security. Immediately after the
attacks in New York and Washington D.C. on September 11, 2001, management of the
Seabrook Project activated enhanced security measures. On February 25, 2002, the
NRC issued an order to all nuclear plant licensees, requiring them to take
certain additional interim compensatory measures to address the generalized
high-level threat environment. These additional compensatory requirements will
provide the NRC with reasonable assurance that public health and safety and the
common defense and security continue to be adequately protected in the current
generalized high-level threat environment. These requirements will remain in
effect pending notification from the NRC that a significant change in the threat
environment occurs, or until the NRC determines that other changes are needed
following a more comprehensive reevaluation of current safeguards and security
programs. Seabrook remains at a high level of security and the management of
Seabrook has assured the joint owners of Seabrook that it will take actions
necessary to comply with the NRC order setting out the requirements for interim
compensatory measures. Compliance with these requirements will result in
additional incremental operating and capital costs, a proportionate share of
which will be paid by Great

                                       18
<PAGE>
                             BAYCORP HOLDINGS, LTD.




Bay and Little Bay. Should additional security measures be required by the NRC,
additional operating or capital costs could be incurred at the Seabrook Project.

Forward-Looking Statements

      This Quarterly Report on Form 10-Q/A contains forward-looking statements.
For this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes", "expects", "anticipates", "plans",
"intends" and similar expressions are intended to identify forward-looking
statements. Forward looking statements include, without limitation, statements
concerning the closing date of the Seabrook sale and the expected proceeds,
future net working capital and net operating loss carryforwards, forward firm
energy sales contracts, the ability to meet future anticipated cash requirements
and BayCorp's share of Seabrook's 2002 capital expenditures and 2002 refueling
and outage expenses. There are a number of important factors that could cause
the results of BayCorp and/or it subsidiaries to differ materially from those
indicated by such forward-looking statements. Among the important factors that
could cause actual results to differ materially from those indicated by such
forward-looking statements are the factors set forth in the Company's Annual
Report on Form 10-K under the caption Management's Discussion and Analysis of
Financial Condition and Results of Operation - Certain Factors That May Affect
Future Results, which are incorporated by reference herein.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

      The price of electricity is subject to fluctuation resulting from changes
in supply and demand. Great Bay sold a portion of its electricity through
forward, fixed-price energy sales contracts in prior years, including in 2001.
Until December 31, 2001, Great Bay tracked its market exposure for these forward
energy sales contracts in a mark-to-market model that was updated daily with
current market prices and it was reflected in the company's balance sheet. The
positive, or negative, value of Great Bay's portfolio of firm power commitments
represented an estimation of the gain, or loss, that Great Bay would have
experienced if open firm commitments were covered at then-current market prices.
As of December 31, 2001 and as of June 30, 2002, Great Bay had no firm forward,
fixed price energy sales contracts.

PART II - OTHER INFORMATION

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

      The Company held its Annual Meeting of Stockholders on April 24, 2002.
Proxies for the meeting were solicited pursuant to Regulation 14A, and there
were no solicitations in opposition to management's nominees for Directors. All
such nominees were elected. At the Annual Meeting, the following matters were
voted on:

      1.    Seven members were elected to the Board of Directors to serve until
            the next Annual Meeting of Stockholders of the Company and until
            their successors are duly elected and qualified. The following table
            sets forth the number of votes cast for and withheld for each
            nominee for Director.



                                       19
<PAGE>
                             BAYCORP HOLDINGS, LTD.




<TABLE>
<CAPTION>
                 Name                                     For                                 Withheld
                 ----                                     ---                                 --------
<S>                                                    <C>                                    <C>
Alexander Ellis                                        6,717,295                               18,201
Stanley I. Garnett                                     6,717,295                               18,201
Frank W. Getman Jr.                                    6,703,974                               31,522
James S. Gordon                                        6,724,245                               11,251
Michael R. Latina                                      6,721,145                               14,351
Lawrence M. Robbins                                    6,717,295                               18,201
John A. Tillinghast                                    6,728,395                                7,101
</TABLE>


      2.    The stockholders of the Company ratified the adoption of the
            Company's 2001 Non-Statutory Stock Option Plan by a vote of
            4,919,844 in favor of the Plan, 259,015 voted against the Plan, and
            2,901 abstained.

Item 6.  Exhibits and Reports on Form 8-K

      (a)   See Exhibit Index.

      (b)   The following report on Form 8-K was filed during the three month
            period ended June 30, 2002:

              The Company filed a Current Report on Form 8-K on April 13, 2002
              that described an agreement among BayCorp, Great Bay and Little
              Bay, and other selling owners, to sell their interests, which
              amount to approximately 88% of the ownership, in the Seabrook
              Nuclear Power Plant to FPL Group, Inc.

            The Company filed a Current Report on Form 8-K on July 25, 2002 that
            reported the Company's appointment of Deloitte and Touche as its
            independent public accountants for the 2002 fiscal year and
            announced its dismissal of Arthur Andersen LLP.


                                       20
<PAGE>
                             BAYCORP HOLDINGS, LTD.




                                    SIGNATURE

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

                                       BAYCORP HOLDINGS, LTD.


February 4, 2003                       By: /s/ Frank W. Getman Jr.
                                       -----------------------------------------
                                       Frank W. Getman Jr.
                                       President and Chief Executive Officer



                                       21



<PAGE>
                             BAYCORP HOLDINGS, LTD.




                                 CERTIFICATIONS

I, Frank W. Getman Jr., President and CEO of BayCorp Holdings, Ltd., certify
that:

      1.    I have reviewed this quarterly report on Form 10-Q/A of BayCorp
            Holdings, Ltd.;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of BayCorp as of, and for, the periods presented in this
            quarterly report;

      4.    BayCorp's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
            and we have:

            a) designed such disclosure controls and procedures to ensure that
            material information relating to BayCorp, including its consolidated
            subsidiaries, is made known to us by others within those entities,
            particularly during the period in which this quarterly report is
            being prepared;

            b) evaluated the effectiveness of BayCorp's disclosure controls and
            procedures as of a date within 90 days prior to the filing date of
            this quarterly report (the "Evaluation Date"); and

            c) presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

      5.    BayCorp's other certifying officer and I have disclosed, based on
            our most recent evaluation, to BayCorp's auditors and the audit
            committee of BayCorp's board of directors (or persons performing the
            equivalent function):

            a) all significant deficiencies in the design or operation of
            internal controls which could adversely affect BayCorp's ability to
            record, process, summarize and report financial data and have
            identified for BayCorp's auditors any material weaknesses in
            internal controls; and

            b) any fraud, whether or not material, that involves management or
            other employees who have a significant role in BayCorp's internal
            controls; and

      6.    BayCorp's other certifying officer and I have indicated in this
            quarterly report whether or not there were significant changes in
            internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.

Date: February 4, 2003                     /s/ Frank W. Getman Jr.
                                           -----------------------
                                           Frank W. Getman Jr.
                                           President and Chief Executive Officer



                                       22


<PAGE>
                             BAYCORP HOLDINGS, LTD.




I, Patrycia T. Barnard, Chief Accounting Officer and Treasurer of BayCorp
Holdings, Ltd., certify that:

      1.    I have reviewed this quarterly report on Form 10-Q/A of BayCorp
            Holdings, Ltd.;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of BayCorp as of, and for, the periods presented in this
            quarterly report;

      4.    BayCorp's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
            and we have:

            a) designed such disclosure controls and procedures to ensure that
            material information relating to BayCorp, including its consolidated
            subsidiaries, is made known to us by others within those entities,
            particularly during the period in which this quarterly report is
            being prepared;

            b) evaluated the effectiveness of BayCorp's disclosure controls and
            procedures as of a date within 90 days prior to the filing date of
            this quarterly report (the "Evaluation Date"); and

            c) presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

      5.    BayCorp's other certifying officer and I have disclosed, based on
            our most recent evaluation, to BayCorp's auditors and the audit
            committee of BayCorp's board of directors (or persons performing the
            equivalent function):

            a) all significant deficiencies in the design or operation of
            internal controls which could adversely affect BayCorp's ability to
            record, process, summarize and report financial data and have
            identified for BayCorp's auditors any material weaknesses in
            internal controls; and

            b) any fraud, whether or not material, that involves management or
            other employees who have a significant role in BayCorp's internal
            controls; and

      6.    BayCorp's other certifying officer and I have indicated in this
            quarterly report whether or not there were significant changes in
            internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.

Date: February 4, 2003                    /s/ Patrycia T. Barnard
                                          -----------------------
                                          Patrycia T. Barnard
                                          Chief Accounting Officer and Treasurer


                                       23



<PAGE>
                             BAYCORP HOLDINGS, LTD.




EXHIBIT INDEX

Exhibit No.           Description

2.1         Purchase and Sale Agreement for the Seabrook Nuclear Power Station
            by and among North Atlantic Energy Corporation, The United
            Illuminating Company, Great Bay Power Corporation, New England Power
            Company, The Connecticut Light and Power Company, Canal Electric
            Company, Little Bay Power Corporation and New Hampshire Electric
            Cooperative, Inc. as Sellers and North Atlantic Energy Service
            Corporation and FPL Energy Seabrook, LLC as Buyer dated April 13,
            2002 is incorporated by reference to Exhibit 10.1 to the
            registrant's current report on Form 10-Q dated March 31, 2002.

10.1        Promissory Note, dated March 7, 2002, by and between John A.
            Tillinghast in favor of BayCorp Holdings, Ltd. (1)

99.1        Certain Factors That May Affect Future Results, set out on pages
            19-22 of the Company's Annual Report on Form 10-K for the period
            ended December 31, 2001. Such Form 10-K shall not be deemed to be
            filed except to the extent that portions thereof are expressly
            incorporated by reference herein.

99.2        Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
            2002.

99.3        Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
            2002.

            (1) Filed as an exhibit to the Company's Quarterly Report on Form
            10-Q (File No. 1-12527) on August 14, 2002.




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