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<P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>

<P ALIGN="CENTER">Washington, D. C. 20549</P>

<P ALIGN="CENTER">FORM 10-Q</P>

<P ALIGN="CENTER">Quarterly Report Under Section 13 or 15(d) of</P>

<P ALIGN="CENTER">The Securities Exchange Act of 1934</P>

<P ALIGN="CENTER">For Quarter Ended<U> March 31, 2000 </U></P>

<P ALIGN="CENTER">Commission File No. <U> 1-3429 </U></P>

<P ALIGN="CENTER"><U> Maine Public Service Company </U></P>

<P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</P>

<P ALIGN="CENTER"><U> Maine </U> </P>

<P ALIGN="CENTER">(State or other jurisdiction of incorporation or organization)</P>

<P ALIGN="CENTER"><U> 01-0113635 </U> </P>

<P ALIGN="CENTER">(I.R.S. Employer Identification No.)</P>

<P ALIGN="CENTER"><U> 209 State Street, Presque Isle, Maine </U></P>

<P ALIGN="CENTER">(Address of principal executive offices)</P>

<P ALIGN="CENTER"><U> 04769 </U></P>

<P ALIGN="CENTER">(Zip Code)</P>

<P ALIGN="CENTER">Registrant's telephone number, including area code <U> 207-768-5811 </U> </P>

<BR WP="BR1"><BR WP="BR2">
<P>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 <U> X </U>. No <U> </U>.</P>

<P ALIGN="CENTER">(APPLICABLE ONLY TO CORPORATE ISSUERS:)</P>

<P>Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period
covered by this report.</P>

<P ALIGN="CENTER">Common Stock, $7.00 par value - 1,607,250 shares</P>

<BR WP="BR1"><BR WP="BR2">
<P ALIGN="RIGHT">Form 10-Q</P>

<P ALIGN="CENTER"><U>PART 1. FINANCIAL INFORMATION</U></P>

<P><U>Item 1.</U> <U>Financial Statements</U></P>

<P>See the following exhibits - Maine Public Service Company and Subsidiaries Condensed Consolidated Financial
Statements, including a statement of consolidated operations for the quarter ended March 31, 2000, and for the
corresponding period of the preceding year; a consolidated balance sheet as of March 31, 2000, and as of December
31,1999, the end of the Company's preceding fiscal year; and a statement of consolidated cash flows for the period January
1 (beginning of the fiscal year) through March 31, 2000, and for the corresponding period of the preceding year.</P>

<P>In the opinion of management, the accompanying unaudited condensed consolidated financial statements present fairly the
financial position of the Companies at March 31, 2000 and December 31, 1999, and the results of their operations for the
three months ended March 31, 2000 and their cash flows for the three months ended March 31, 2000, and for the
corresponding period of the preceding year.</P>

<BR WP="BR1"><BR WP="BR2">
<BR WP="BR1"><BR WP="BR2">
<BR WP="BR1"><BR WP="BR2">
<P ALIGN="CENTER">-2-</P>

<P><FONT FACE="Times New Roman" SIZE="-1">MAINE PUBLIC SERVICE COMPANY AND SUBSIDIARIES</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">STATEMENTS OF CONSOLIDATED OPERATIONS</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">(Unaudited)</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">(Dollars in Thousands Except Per Share Amounts)</FONT>
<TABLE WIDTH="100%">
<TR VALIGN="TOP"><TD WIDTH="412"></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="110"><FONT FACE="Times New Roman" SIZE="-1">Three Months Ended</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD COLSPAN="2" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">March 31,</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">2000</FONT></TD>
<TD ALIGN="CENTER" WIDTH="98"><FONT FACE="Times New Roman" SIZE="-1">1999</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Operating Revenues</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$17,567</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$17,469</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> EA-Standard Offer Service Margin</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">312</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total Revenues</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17,879</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17,469</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Operating Expenses</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Purchased Power</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">9,289</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">9,098</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Other Operation and Maintenance</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,996</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">3,305</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Depreciation</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">580</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">601</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Amortization of Stranded Costs</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">804</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Amortization</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">252</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">385</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Taxes Other Than Income</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">346</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">447</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Provision for Income Taxes</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,151</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,144</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total Operating Expenses</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">15,418</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">14,980</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Operating Income</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,461</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,489</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Other Income (Deductions)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Equity in Income of Associated Companies</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">80</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">277</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Allowance for Equity Funds Used During Construction</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">10</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Provision for Income Taxes</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(226)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(34)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Other - Net</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">517</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(11)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">372</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">242</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Income Before Interest Charges</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,833</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,731</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Interest Charges</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Long-Term Debt and Notes Payable</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,016</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">979</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1"> Less Carrying Costs-Stranded Costs and Allowance</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> for Borrowed Funds used During Construction</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(74)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(7)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">942</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 972</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Net Income Available for Common Stock</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,891</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,759</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Average Shares Outstanding (000's)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,612</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,617</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Basic Earnings Per Share of Common Stock</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1.17</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1.09</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Dividends Declared per Common Share</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$0.30</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$0.25</FONT></TD></TR></TABLE>

<P><FONT FACE="Times New Roman" SIZE="-1">The accompanying notes are an integral part of these financial statements.</FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">-3-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">MAINE PUBLIC SERVICE COMPANY AND SUBSIDIARIES</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">CONSOLIDATED BALANCE SHEETS</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">(Dollars in Thousands)</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1"> </FONT>
<TABLE BORDER="1" WIDTH="648">
<TR VALIGN="TOP"><TD WIDTH="372"></TD>
<TD ALIGN="CENTER" WIDTH="136"><FONT FACE="Times New Roman" SIZE="-1">Mar. 31, 2000</FONT></TD>
<TD ALIGN="CENTER" WIDTH="140"><FONT FACE="Times New Roman" SIZE="-1"> December 31, 1999</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> ASSETS </FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1"> (Unaudited)</FONT></TD>
<TD ALIGN="CENTER"></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Utility Plant</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Electric Plant in Service </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$75,369</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$75,531</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Less Accumulated Depreciation</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">35,146</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">34,701</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Net Electric Plant in Service </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">40,223</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">40,830</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Construction Work-in-Progress</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,629</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,052</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">41,852</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">41,882</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Investment in Associated Companies</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Maine Yankee Atomic Power Company </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">3,703</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">3,753</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Maine Electric Power Company, Inc. </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">297</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">279</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">4,000</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">4,032</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Net Utility Plant and Investments </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 45,852</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">45,914</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Current Assets</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Cash and Cash Equivalents </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,449</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">6,985</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Deposits with Trustee-Asset Sale </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">16,194</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">18,242</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Accounts Receivable - Net</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">6,548</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">7,043</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Unbilled Base Revenue </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,317</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,149</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Inventory</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">692</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">509</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Prepayments </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">531</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">643</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">26,731</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">34,571</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Regulatory Assets</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Uncollected Maine Yankee Decommissioning Costs </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">31,510</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">32,158</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Recoverable Seabrook Costs </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">18,051</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">23,451</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Regulatory Assets - SFAS 109 & 106 </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">7,634</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">10,459</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Deferred Fuel and Purchased Energy Costs </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">11,284</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">11,217</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Regulatory Asset - Power Purchase Agreement Restructuring </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">8,706</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">8,706</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Unamortized Debt Expense </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">929</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,014</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Deferred Regulatory Costs, less accumulated amortization</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">361</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">581</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">78,475</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">87,586</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Other Assets</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Restricted Investments </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,390</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,402</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Miscellaneous </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">692</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,075</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">3,082</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">3,477</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total Assets </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$154,140</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$171,548</FONT></TD></TR>
<TR VALIGN="TOP"><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">CAPITALIZATION AND LIABILITIES</FONT></TD>
<TD COLSPAN="2"></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Capitalization</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1"> Common Shareholders' Equity</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Common Stock </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$13,071</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$13,071</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Paid-in Capital </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">38</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">38</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Retained Earnings </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">31,170</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">29,765</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Treasury Stock, at cost </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(5,886)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(5,714)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">38,393</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">37,160</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Long-Term Debt (less current maturities) </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">41,965</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">41,990</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Current Liabilities</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Long-Term Debt Due Within One Year </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">25</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">25</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Notes Payable </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,700</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">3,600</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Accounts Payable </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">3,335</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">5,717</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Accounts Payable - Standard Offer Service </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,402</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Current Deferred Income Taxes </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">195</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Dividends Declared </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">485</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">485</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Customer Deposits </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">22</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Interest and Taxes Accrued </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,516</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">9,788</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">9,485</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">19,827</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT FACE="Times New Roman" SIZE="-1">Deferred Credits</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Uncollected Maine Yankee Decommissioning Costs </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">31,510</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">32,158</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Deferred Income Tax </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17,223</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17,160</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Investment Tax Credits </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">279</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">288</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Deferred Gain & Related Accounts - Generating Asset Sale</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">12,461</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">20,227</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Miscellaneous </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,824</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,738</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">64,297</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">72,571</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total Capitalization and Liabilities </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$154,140</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$171,548</FONT></TD></TR></TABLE>

<P><FONT FACE="Times New Roman" SIZE="-1"> </FONT><FONT FACE="Times New Roman" SIZE="-1">The accompanying notes are an integral part of these financial statements.</FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1"> </FONT><FONT FACE="Times New Roman" SIZE="-1">-4-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">MAINE PUBLIC SERVICE COMPANY AND SUBSIDIARIES</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">Statements of Consolidated Cash Flows</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">(Unaudited)</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">(Dollars in Thousands)</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1"> </FONT>
<TABLE BORDER="1" WIDTH="654">
<TR VALIGN="TOP"><TD WIDTH="400"></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="133"><FONT FACE="Times New Roman" SIZE="-1">Three Months Ended</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> </FONT></TD>
<TD COLSPAN="2" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">March 31,</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">2000</FONT></TD>
<TD ALIGN="CENTER" WIDTH="121"><FONT FACE="Times New Roman" SIZE="-1">1999</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Cash Flow From Operating Activities</FONT></TD>
<TD></TD>
<TD></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Net Income </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,891</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,759</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Adjustments to Reconcile Net Income to Net Cash Provided By Operations </FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Depreciation </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">580</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">601</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Amortization </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">274</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">394</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Amortization of Deferred Gain from Asset Sale </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(510)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Income on Tax Exempt Bonds-Restricted Funds </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(4)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Deferred Income Taxes - Net </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">592</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">585</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> AFUDC </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(17)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Accrued Interest on Generating Asset Sale Deferred Gain </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">161</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Rate Stabilization Plan Revenue </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(379)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Change in Deferred Fuel & Purchased Energy</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(67)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(647)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Change in Deferred Regulatory and Debt Issuance Costs </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">309</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">235</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Change in Deferred Regulatory Asset - Power Purchase Restructuring</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(37)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Gain on Sale of Non-Utility Property </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(205)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Change in Deferred Revenues </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">36</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Change in Benefit Obligation </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">125</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">168</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Change in Current Assets and Liabilities</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1,021)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1,194)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Other </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">336</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">311</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Net Cash Flow Provided By Operating Activities </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,048</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,227</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Cash Flow From Financing Activities</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Dividend Payments </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(485)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(404)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Drawdown of Asset Sale Proceeds with Trustee </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,500</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Deposit of Non-Utility Property Sale Proceeds with Trustee </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(211)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> FAME Financing Costs </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(6)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Purchase of Common Stock </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(171)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Retirements on Long-Term Debt </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(25)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(25)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Short-Term Borrowings (Repayments), Net </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(900)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1,300)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Net Cash Flow Provided By (Used In) Financing Activities </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">708</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1,735)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Cash Flow From Investing Activities</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Payment of Taxes on Generating Asset Sale Deferred Gain</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(7,853)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Proceeds from Sale of Non-Utility Property </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">208</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">0</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Investment in Electric Plant </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(647)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(632)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Net Cash Flow Used For Investment Activities</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(8,292)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(632)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Decrease in Cash and Cash Equivalents</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(5,536)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(140)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Cash and Cash Equivalents at Beginning of Year </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">6,985 </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,454</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Cash and Cash Equivalents at End of Period</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,449</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,314</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Change in Current Assets and Liabilities Providing (Utilizing)</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Cash From Operating Activities</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Accounts Receivable </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> $495</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">($1,280)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Unbilled Revenue </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(168)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">382</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Inventory </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(183)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(195)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Prepayments </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">112</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">84</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Accounts Payable & Accrued Expenses</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(1,282)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(183)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Other Current Liabilities </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">5</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(2)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Total Change</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">($1,021)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">($1,194)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Supplemental Disclosure of Cash Flow Information:</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Cash Paid During the Period For:</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Interest</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,368</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,366</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> Income Taxes (Includes $7.8 million payment in February, 2000</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> to Revenue Canada for 1999 asset sale taxes)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$8,060</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$40 </FONT></TD></TR></TABLE>
</P>
<BR WP="BR1"><BR WP="BR2">
<P><FONT FACE="Times New Roman" SIZE="-1">The accompanying notes are an integral part of these financial statements.</FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1"> </FONT><FONT FACE="Times New Roman" SIZE="-1">-5-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1"><STRONG>NOTES TO CONSOLIDATED STATEMENTS</STRONG></FONT></P>

<P>1. <FONT FACE="Times New Roman" SIZE="-1">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">The accompanying unaudited consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary, Maine and New
Brunswick Electrical Power Company, Limited (ME&NB) and its unregulated marketing subsidiary, Energy Atlantic, LLC (EA).</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">The Company is subject to the regulatory authority of the Maine Public Utilities Commission (MPUC) and, with respect to wholesale rates, the Federal
Energy Regulatory Commission (FERC).</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1"> The accompanying unaudited consolidated financial statements should be read in conjunction with the 1999 Annual Report, an integral part of Form
10-K. Certain financial statement disclosures have been condensed or omitted but are an integral part of the 1999 Form 10-K. These statements reflect all
adjustments that are, in the opinion of management, necessary to a fair statement of results for interim periods presented. All such adjustments are of a
normal recurring nature. The Company's significant accounting policies are described in the Notes to Consolidated Financial Statements of the Company's
Annual Report filed with the Form 10-K. For interim reporting purposes, these same accounting policies are followed.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1"> As of March 1, 2000, the Company bills customers for the energy supplied by standard offer and competitive energy providers. The Company is at risk
for the collection of the standard offer supply, as it is required to remit funds within 26 days of the billing date. Competitive energy providers are paid only
after the funds are collected from customers. The Company records accounts receivable for the amounts billed to Standard Offer Service (SOS) customers
and a corresponding accounts payable for the amounts due to the energy supplier. No revenue is recognized as the Company is acting as an agent.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1"> For purposes of the statements of consolidated cash flows, the Company considers all highly liquid securities with a maturity, when purchased, of three
months or less to be cash equivalents.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1"> Certain reclassifications have been made to the 1999 financial statement amounts in order to conform to the 2000 presentation.</FONT></P>

<P>2. <FONT FACE="Times New Roman" SIZE="-1">ENERGY ATLANTIC</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">In January, 1999, Energy Atlantic, the Company's wholly-owned unregulated marketing subsidiary, formally began operations. This marketing subsidiary
was involved in wholesale energy transactions during 1999 and the first two months of 2000, and began selling to retail customers on March 1, 2000, the
commencement of retail competition in the State of Maine.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">Energy Atlantic's retail activity comprises standard offer service (SOS) and competitive energy supply (CES), both of which utilize power provided via a
contract with Engage Energy (Engage). Revenues are received and expenses are paid directly by an escrow agent which is controlled by Engage. EA
receives a percentage of the net profit from the sale of energy. EA is the SOS provider for approximately 525,000 residential and small non-residential
customers in the Central Maine Power (CMP) service territory and was awarded 20% of the medium non-residential customer base in the Company's
service territory. The utilities bear SOS account collection risk, as they are required to remit the amounts billed 26 days after the billing date to EA's
escrow account and maintain the billing and customer service relationship. EA records the accrued net margin of the SOS activity as revenue in the
financial statements. EA's CES activity is principally two large industrial customers in CMP's service territory, as well as residential and small
non-residential customers throughout Maine. For CES sales, EA negotiates the price directly with the customer, maintains customer service responsibility
and has collection risk. CES activity is recorded on a gross basis to include the related revenues and purchased power expenses.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">Energy Atlantic is subject to risk in scheduling electric load in the New England retail market. Under the terms of its Wholesale Power Sales Agreement
with Engage, EA is required to forecast its expected hourly load in the New England market with the New England system operator, ISO-NE. If EA
underforecasts that load, ISO-NE will provide the deficiency at the spot price in the New England market, which is essentially the highest marginal cost in
that market during that hour. If that spot price is higher than the price at which EA has contracted to purchase power during that hour, EA is responsible
for a portion of that difference under the terms of its Sale Agreement with Engage. By way of illustration, prices </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">-6-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">in ISO-NE rose as high as $6,000 per MWH during the afternoon of May 8, 2000. During that same period, EA had underforecasted its actual load by 4 %
to 5%. Although the final numbers have not yet been determined, this underforecast could result in costs to EA of as much as $500,000. Prices of $6,000
per MWH are approximately 197 times the average ISO-NE market price of $30.50 per MWH for year-to-date May 7, 2000, and management considers
this event unusual and infrequent. Steps are considered taken to mitigate the risks of such occurrences in the future.</FONT> </P>

<P><FONT SIZE="-1">The Company has determined that EA's activity and related energy contracts are considered non-trading in accordance with EITF 98-10 "Accounting for
Companies Involved in Energy Trading and Risk Management Activities". </FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-1">During the quarter ended March 31, 1999, the Company adopted Statement of Financial Accounting Standards (FAS) No. 131, "Disclosure about
Segments of an Enterprise and Related Information", which became applicable as a result of the start-up of Energy Atlantic. The accounting policies of
the segments are the same as those described in Note. 1, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES". The Company provides certain
administrative support services to Energy Atlantic, which are billed to that entity at cost based on a combination of direct charges and allocations. The
Company is organized on the basis of products and services. The Company's reportable segments include the electric utility portion of the business,
consisting of Maine Public Service Company and Maine and New Brunswick Electrical Power Company, Limited (MPS), and the energy marketing
portion of the business, consisting of Energy Atlantic (EA). In June, 1999, ME&NB sold its generating assets and ceased operations.</FONT></P>

<BR WP="BR1"><BR WP="BR2">
<TABLE BORDER="1" WIDTH="706">
<TR VALIGN="TOP"><TD COLSPAN="3" WIDTH="245"></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="81"><FONT FACE="Times New Roman" SIZE="-1">Three Months Ended</FONT></TD>
<TD COLSPAN="2" WIDTH="81"></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"></TD>
<TD COLSPAN="2" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">(Dollars in Thousands)</FONT></TD>
<TD COLSPAN="2"></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="2"></TD>
<TD WIDTH="75">
<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">3/31/00</FONT></TD>
<TD COLSPAN="2"></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">3/31/99</FONT></TD>
<TD WIDTH="75"></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="2"></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1"> </FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">Total</FONT></TD>
<TD ALIGN="CENTER" WIDTH="80"></TD>
<TD ALIGN="CENTER"></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">Total</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1"> </FONT></TD>
<TD ALIGN="CENTER" WIDTH="69"><FONT FACE="Times New Roman" SIZE="-1">EA</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">MPS</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">Company</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">EA</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">MPS</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">Company</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Operating Revenues</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$2,436</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$15,131</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$17,567</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,461</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$16,008</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$17,469</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">EA Standard Offer Service Margin</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">312</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> - </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">312</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> - </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">- </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">- </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total Revenues</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,748</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">15,131</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17,879</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,461</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">16,008</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17,469</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Operations & Maintenance Expense</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,609</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">11,312</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">13,921</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,547</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">12,289</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">13,836</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Taxes</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">49</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 1,448</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 1,497</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(34)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,178</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,144</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total Operating Expenses</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,658</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">12,760</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">15,418</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1,513</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">13,467</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">14,980</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Operating Income (Loss)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">90</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,371</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,461</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(52)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,541</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,489</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Other Income & Deductions</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">1</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">371</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">372</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">-</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">242</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">242</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Income (Loss) Before Interest Charges</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 91</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 2,742</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> 2,833</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">(52)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,783</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2,731</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Interest Charges</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">17</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">925</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">942</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">2</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">970</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">972</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Net Income (Loss)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> $74</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,817</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1"> $1,891</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$(54)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,813</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,759</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-1">Total Assets</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,920</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$152,220</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$154,140</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$1,158</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$163,069</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-1">$164,227</FONT></TD></TR></TABLE>

<P><FONT SIZE="-1">3. RESTRUCTURING AND IMPLEMENTATION OF MULTI-YEAR RATE PLANS</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> <U>Four-Year Rate Plan From January, 1996 to February, 2000</U></FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">A four-year rate plan, approved by the MPUC on November 13, 1995, provided retail rate increases of 4.4% on January 1, 1996, 2.9% on February 1, 1997, and 3.9% on February 1, 1998. On April 6, 1999,
the MPUC approved a Stipulation between the Office of the Public Advocate (OPA) and the Company. Under this stipulation and with the MPUC approval of the sale of the Company's generating assets,
customer rates did not increase on April 1, 1999.</FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">-7-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> Principal provisions of the Stipulation are as follows:</FONT></P>

<P><FONT SIZE="-1">(a) </FONT><FONT FACE="Times New Roman" SIZE="-2">The Company was entitled to a 3.66% specified rate increase as of April 1, 1999. Rather than increasing customer rates, the Company recognized the revenues related to this rate increase,
approximately $1,695,000 through March 1, 2000, with $379,000 recognized in the first quarter of 2000. Subsequently, the MPUC allowed the deferred gain from the asset sale to be reduced in an amount
corresponding to the specified rate increase.</FONT></P>

<P><FONT SIZE="-1">(b) </FONT><FONT FACE="Times New Roman" SIZE="-2">The Company agreed to begin amortizing on April 1, 1999 an additional $150,000 per month of Maine Yankee replacement power costs or a total of $1,650,000 for the remaining eleven months
of the
rate plan, with $300,000 recognized in the first quarter of 2000. </FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> <U>Restructuring</U></FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> As previously reported, on May 29, 1997, legislation titled "An Act to Restructure the State's Electric Industry" was signed into law by the Governor of Maine. The principal provisions with accounting
impact on the Company are described in the Company's 1999 Form 10-K, which is incorporated herein by reference.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> The MPUC has conducted several rulemaking proceedings associated with the new restructuring law.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> In accordance with EITF 97-4, after the details of the restructuring plan were determined by the MPUC rulemaking, the Company discontinued application of the Statement of Financial Accounting
Standards No. 71 (SFAS 71), "Accounting for the Effects of Certain Types of Regulations", for the retail generation segment of its business in the fourth quarter of 1999. As a result the Company continues
to defer certain costs as regulatory assets in instances where recovery through future regulatory cash flows is anticipated.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> At March 31, 2000, $78.5 million of regulatory assets remained on the Company's books. These assets are being amortized over various periods in accordance with the MPUC approved Phase II filing. The
major components include the remaining investment in Seabrook and recovery of fuel expense deferrals related to Wheelabrator-Sherman, the obligation for remaining operating expenses and recovery of
the Company's remaining investment in Maine Yankee, and the recovery of several other regulatory assets.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> <U>Two -Year Rate Plan Effective March 1, 2000</U></FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> On October 14, 1998, and subsequently amended on February 9, 1999 and August 11, 1999, the Company filed its determination of stranded costs, transmission and distribution costs and rate design with
the</FONT><FONT FACE="Times New Roman" SIZE="-2"> MPUC. The Company's amended testimony supports its $95.7 million estimate of stranded costs, net of available value from the sale of the generating assets, when deregulation began on March 1,
2000. The major components include the remaining investment in Seabrook, the above market costs of the amended power purchase agreement and recovery of fuel expense deferrals related to
Wheelabrator-Sherman, the obligation for remaining operating expenses and recovery of the Company's remaining investment in Maine Yankee, and the recovery of several other regulatory assets. </FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> On October 15, 1999, the Company filed with the MPUC a Stipulation resolving the revenue requirement and rate design issues for the Company's Transmission and Distribution (T&D) utility. This
Stipulation has been signed by the Public Advocate and approval will be recommended by the MPUC staff. Under the Stipulation, the Company's total annual T&D revenue requirement will be
$16,640,000, effective March 1, 2000. This revenue requirement includes a 10.7% return on equity with a capital structure based on 51% common equity. The Stipulation further provides that the precise
level of stranded cost recovery cannot be determined until final determination of all costs associated with the sale of the Company's generating assets, but does set forth some general principles concerning
the Company's ultimate stranded costs recovery, including agreement that the major components of the Company's stranded costs are</FONT><FONT FACE="Times New Roman" SIZE="-2"> legitimate, verifiable and unmitigable, and therefore subject to recovery
in rates, and that the 3.66% recovery foregone in Docket 98-865 shall be added to stranded cost recovery in the manner specified in the stipulation in that Docket. The stipulation also provides that the
Company's recovery of unamortized investment tax credits and excess deferred income taxes associated with the Company's generating assets must await a final determination ruling from the IRS, which
ruling has been sought by Central Maine Power Company. On December 1, 1999, the MPUC approved this Stipulation. In early January, 2000, CMP received its ruling from the IRS which concluded that
the unamortized investment tax credits and excess deferred income taxes associated with the sale of the generating assets could not be used to reduce customer rates without violating the tax normalization
rules for public utilities. </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">-8-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> On January 27, 2000, the MPUC approved a Stipulation in Phase II of Docket No. 98-577 that provided for the recovery in rates of the Company's stranded investment. The major element of the Phase II
Stipulation</FONT><FONT FACE="Times New Roman" SIZE="-2"> was the $12.5 million of stranded investment recoverable annually beginning March 1, 2000. This revenue requirement includes a return on unrecovered stranded investment based on the capital
structure approved by the MPUC in its December 1, 1999 Order. The approved capital structure will consist of 51% common equity with an authorized return on equity of 10.7%. The Phase II Stipulation
also allowed the Company to offset its unrecovered stranded investment in Seabrook by approximately $7 million, representing an amount equal to 35% of the available value from the sale of the
generation assets. The parties to the Phase II Stipulation also resolved several rate design issues, principally the elimination of the inclining block rate for residential customers. In addition, the Company
was granted several accounting orders incorporating certain accounting methodologies used in determining the elements of stranded costs. The annual revenue requirement associated with the recovery of
stranded costs will be reviewed every two years.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> With the award of the standard offer rate on November 18, 1999, and orders approving the Company's T&D rates and stranded investment recovery rates described above, the MPUC has established all
elements of customer rates effective March 1, 2000, the beginning of deregulation in Maine. On average, our customers' rates will be reduced by approximately 6%. </FONT></P>

<P><FONT SIZE="-1">4. </FONT><FONT FACE="Times New Roman" SIZE="-2">INCOME TAXES</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> A summary of Federal and State income taxes charged to income is presented below. For accounting and ratemaking purposes, income tax provisions included in "Operating Expenses" reflect taxes
applicable to </FONT><FONT FACE="Times New Roman" SIZE="-2"> revenues and expenses allowable for rate making purposes, with the exception of Energy Atlantic activity, which is above the line and not allowable for ratemaking purposes. The tax effect of
items not included in rate base is allocated as "Other Income (Deductions)".</FONT> </P>

<BR WP="BR1"><BR WP="BR2">
<TABLE BORDER="1" WIDTH="452">
<TR VALIGN="TOP"><TD WIDTH="243"></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="94"><FONT FACE="Times New Roman" SIZE="-2">(Dollars in Thousands)</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD COLSPAN="2" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">Three Months Ended</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD COLSPAN="2">
<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-1">March 31,</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2"> </FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">2000</FONT></TD>
<TD ALIGN="CENTER" WIDTH="115"><FONT FACE="Times New Roman" SIZE="-2">1999</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Current income taxes</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$670 </FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2"> $593</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Deferred income tax</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">716</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">601</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Investment credits</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(9)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(16)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Total income taxes</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$1,377</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$1,178</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Allocated to:</FONT></TD>
<TD ALIGN="RIGHT"></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Operating Income</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$1,151</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$1,144</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Other income</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">226</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">34</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Total</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$1,377</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$1,178</FONT></TD></TR></TABLE>

<P><FONT FACE="Times New Roman" SIZE="-2"> For the three months ended March 31, 2000 and 1999, the effective income tax rates were 42.1% and 40.1%, respectively. The principal reason for the effective tax rates differing from the US federal
income </FONT><FONT FACE="Times New Roman" SIZE="-2"> tax rate are the contribution to net income of the Company's Canadian subsidiary, flow through items required by regulation and state income taxes. Current income taxes recorded on the
Company's deferred gain from the generating asset sale are offset by corresponding deferred income taxes. </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">-9-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> The following summarizes accumulated deferred income taxes established on temporary differences under SFAS 109 as of March 31, 2000 and December 31, 1999.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> </FONT><FONT SIZE="-1"> </FONT>
<TABLE BORDER="1" WIDTH="522">
<TR VALIGN="TOP"><TD WIDTH="254"></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="135"><FONT FACE="Times New Roman" SIZE="-1">(Dollars in Thousands)</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">March 31 ,</FONT></TD>
<TD ALIGN="CENTER" WIDTH="133"><FONT FACE="Times New Roman" SIZE="-2">December 31,</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">2000</FONT></TD>
<TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">1999</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Seabrook</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$9,263</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$12,922</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Property</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">6,232</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">6,249</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Deferred fuel</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">4,464</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">4,164</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Pension and postretirement benefits</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(203)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(206)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Generating asset sale</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(4,552)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(7,666)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">W-S up-front payment</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">2,465</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">2,129</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Other</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(446)</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(432)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Net accumulated deferred income taxes</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$17,223</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$17,160 </FONT></TD></TR></TABLE>

<P><FONT SIZE="-1">5. </FONT><FONT FACE="Times New Roman" SIZE="-2">MAINE YANKEE</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">The Company owns 5% of the Common Stock of Maine Yankee, which operated an 860 MW nuclear power plant (the "Plant") in Wiscasset, Maine. On August 6, 1997, the Board of Directors of Maine
Yankee voted to permanently cease power operations and to begin decommissioning the Plant. The Plant experienced a number of operational and regulatory problems and did not operate after December
6, 1996. The decision to close the Plant permanently was based on an economic analysis of the costs, risks and uncertainties associated with operating the Plant compared to those associated with closing
and decommissioning it. The Plant's operating license from the Nuclear Regulatory Commission (NRC) was due to expire on October 21, 2008.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> The Maine Public Utilities Commission (MPUC) stayed an investigation of the prudency of the shutdown decision and the operation of Maine Yankee prior to the shutdown decision, pending the outcome
of Maine Yankee's rate case before the Federal Energy Regulatory Commission (FERC). </FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> During 1998 and early 1999 the active interveners, including among others the MPUC Staff, the OPA, the Company and other owners, the Secondary Purchasers, and a Maine environmental group (the
"Settling Parties"), engaged in extensive discovery and negotiations which resulted in the filing of a settlement agreement with the FERC on January 19, 1999. A separate negotiated settlement filed with the
FERC on February 5, 1999 resolved the issues raised by the Secondary Purchasers by limiting the amounts they will pay for decommissioning the Plant and by settling other points of contention affecting
individual Secondary Purchasers. Both settlements were found to be in the public interest and approved by the FERC on June 1, 1999. The settlements constitute a full settlement of all issues raised in the
FERC proceeding including decommissioning-cost issues and issues pertaining to the prudence of management, operation and decision to permanently cease operation of the Plant.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> The primary settlement provided for Maine Yankee to collect $33.1 million in the aggregate annually, effective August 1, 1999, including both decommissioning costs and costs related to Maine Yankee's </FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> planned independent spent fuel storage installation (ISFSI). The 1997 FERC filing had called for an aggregate annual collection rate of $36.4 million for decommissioning and the ISFSI, based on a 1997
estimate. Pursuant to the approved settlement the amount collected annually has been reduced to approximately $25.6 million, effective October 1, 1999, as a result of 1999 Maine legislation allowing
Maine Yankee to (1) use for decommissioning the ISFSI funds held in trust under Maine law for spent-fuel disposal, and (2) access approximately $6.8 million held by the State of Maine for eventual
payment to the State of Texas pursuant to a compact for low-level nuclear waste disposal, the future of which is now in question after rejection of the selected disposal site in west Texas by a Texas
regulatory agency. </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2"> </FONT><FONT FACE="Times New Roman"> </FONT><FONT FACE="Times New Roman" SIZE="-2">-10-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">The settlement also provides for recovery of all unamortized investment (including fuel) in the Plant, together with a return on equity of 6.50 percent, effective January 15, 1998, on equity balances up to
maximum allowed equity amounts, which resulted in a pro-rata refund of $9.3 million (including tax impacts) to the sponsors on July 15, 1999. The Settling Parties also agreed not to contest the
effectiveness of the Amendatory Agreements submitted to FERC as part of the original filing, subject to certain limitations including the right to challenge any accelerated recovery of unamortized
investment under the terms of the Amendatory Agreements after a required informational filing with the FERC by Maine Yankee. In addition, the settlement contains incentives for Maine Yankee to
achieve further savings in its decommissioning and ISFSI-related costs and resolves issues concerning restoration and future use of the Plant site and environmental matters of concern to certain of the
intervenors in the proceeding.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">Under the Maine Agreement, the Company would continue to recover its Maine Yankee costs in accordance with its most recent Rate Stabilization Plan ("RSP") order from the MPUC without any
adjustment reflecting the outcome of the FERC proceeding. To the extent that the Company has collected from its retail customers a return on equity in excess of the 6.50 percent contemplated by the
settlement, no refunds would be required, but such excess amounts would be credited to the customers to the extent required by the RSP.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">Finally, the Maine Agreement requires the Maine owners, for the period from March 1, 2000 through December 1, 2004, to hold their Maine retail ratepayers harmless from the amounts by which the
replacement power costs for Maine Yankee exceed the replacement power costs assumed in the report to the Maine Yankee Board of Directors that served as a basis for the Plant shutdown decision, up to a
maximum cumulative amount of $41 million. The Company's share of the maximum amount would be $4.1 million for the period. Based on the results of the two year entitlement auction already
completed, the Company will not incur any liability for this provision in 2000 and does not believe that it will incur any liability in 2001.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> With the closing of Maine Yankee, a provision of the Company's rate plan allowing the deferral of 50% of the Maine Yankee replacement power costs went into effect on June 6, 1997. Beginning in May,
1998, </FONT><FONT FACE="Times New Roman" SIZE="-2"> Maine Yankee replacement power costs have been offset by net savings from the restructured Purchase Power Agreement with Wheelabrator-Sherman, in accordance with the rate plan stipulation.
Beginning in April, 1999 the Company began amortizing an additional $150,000 per month as part of a stipulation described in Note 3, "Implementation of Multi-Year Rate Plan". As of March 31, 2000,
the Company has a deferred Maine Yankee replacement power cost balance of approximately $3.0 million, subject to recovery in accordance with the rate plan.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">On September 1, 1997, Maine Yankee estimated the sum of the future payments for the closing, decommissioning and recovery of the remaining investment in Maine Yankee to be approximately $930
million, of which the Company's 5% share would be approximately $46.5 million. In December, 1998 and again in June, 1999, Maine Yankee updated its estimate of decommissioning costs based on the
Settlement, as discussed above. Legislation enacted in Maine in 1997 calls for restructuring the electric utility industry and provides for recovery of decommissioning costs, to the extent allowed by federal
regulation, through the rates charged by the transmission and distribution companies.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">Based on the Maine legislation and regulation precedent established by the FERC in its opinion relating to the decommissioning of the Yankee Atomic nuclear plant, the Company believes that it is entitled
to recover substantially all of its share of such costs from its customers and, as of March 31, 2000, is carrying on its consolidated balance sheet a regulatory asset and a corresponding liability in the amount
of $31.5 million, which is the September, 1997 cost estimate of $46.5 million discussed above reduced by the Company's post-September 1, 1997 cost-of-service payments to Maine Yankee and reflects the
cost adjustments agreed to in the settlement. The MPUC on January 27, 2000, approved a Stipulation providing for the recovery of stranded investment, which includes the Company's share of Maine
Yankee decommissioning expenses, Maine Yankee replacement costs, and the remaining Maine Yankee investment. </FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> On May 4, 2000, Maine Yankee notified its decommissioning operations contractor, Stone & Webster Engineering Corporation ("Stone & Webster"), that it was terminating its decommissioning operations
contract pursuant to the terms of the contract. Subsequently, Stone & Webster notified Maine Yankee that it was disputing Maine Yankee's grounds for terminating the contract. On May 8, 2000, Stone &
Webster announced that it had signed a letter of intent with Jacobs Engineering Group, Inc. ("Jacobs"), regarding a proposed transaction in which Jacobs would acquire substantially all of Stone &
Webster's assets in exchange for an immediate $50 million secured credit facility and other stated consideration, including cash and stock. Stone & Webster said that the credit facility was intended to
enable it to address its current liquidity </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">-11-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> difficulties and continue to operate its businesses until the asset sale is consummated. In addition, Stone &</FONT><FONT SIZE="-1"> </FONT><FONT FACE="Times New Roman" SIZE="-2"> Webster announced that, as a
condition to the proposed transactions with Jacobs, it intended to
seek bankruptcy court approval of the asset sale and credit agreement, and therefore intended to file a </FONT><FONT FACE="Times New Roman" SIZE="-2"> voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code after it signed a
</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> definitive sale agreement with Jacobs, which it expected to occur later in May.</FONT><FONT SIZE="-1"> </FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">Maine Yankee has stated that it remains committed to the successful completion of the decommissioning project, and on May 10, 2000, entered into an interim agreement with Stone & Webster for the
purpose of avoiding the adverse consequences of an abrupt or inefficient demobilization from the Plant site and allowing decommissioning work to continue through June 30, 2000. During that period
Maine Yankee will also continue to evaluate all available long-term alternatives for safely and efficiently completing the decommissioning project. However, we cannot predict at this time what effect the
financial difficulties of Stone & Webster, the interim agreement, or any subsequent arrangement with Stone & Webster or a new general contractor will have on the cost or schedule of the decommissioning
project.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">6. GENERATING ASSET DIVESTITURE</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">On July 7, 1998, the Company and WPS Power Development, Inc. (WPD-PDI) signed a purchase and sale agreement for the Company's electric generating assets. WPS-PDI agreed to purchase 91.8
megawatts of generating capacity for $37.4 million, which is 3.2 times higher than the net book value of the assets. This </FONT><FONT FACE="Times New Roman" SIZE="-2"> sale of assets is required by the State's electric industry restructuring law and
required the approvals of the MPUC and the FERC.</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2">On June 8, 1999, after receiving all of the major regulatory approvals, the Company completed the sale to WPD-PDI for $37.4 million. The Company's 5% ownership in Maine Yankee was not part of the
sale, since the plant is being decommissioned. After paying Canadian, Federal and State income taxes, the remaining proceeds will be used to reduce the Company's debt. The gain from the sale is currently
deferred, and is being recognized according to the Maine Public Utilities Commission's (MPUC) decision on the Company's determination of stranded costs, transmission and distribution costs and rate
design. The components of the deferred gain are as follows:</FONT>
<CENTER>
<TABLE ALIGN="CENTER" BORDER="1" WIDTH="470">
<TR VALIGN="TOP"><TD WIDTH="335"></TD>
<TD WIDTH="135"><FONT FACE="Times New Roman" SIZE="-2">(Dollars in Millions)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Gross proceeds</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$37.5</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Settlement adjustment</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(.1)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Net proceeds</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">37.4</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Net book value</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(11.5)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Excess taxes on sale of Canadian assets</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(3.4)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Transition costs, net</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(1.8)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Other</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">.7</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Available deferred gain</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">21.4</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Utilization of available value per MPUC orders</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">(9.2)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2">Remaining deferred gain, net of tax*</FONT></TD>
<TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE="-2">$12.2</FONT></TD></TR></TABLE>
</CENTER>

<P><FONT FACE="Times New Roman" SIZE="-2"> *The $12.2 million deferred gain above is the $12.4 million "Deferred Gain and Related Accounts-Generating Asset Sale" as of March 31, 2000 reduced by the remaining deferral of transition costs
allowed by the MPUC. </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE="-2">-12-</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> The Company offset a portion of its Recoverable Seabrook costs with available value from its deferred asset sale gain as follows:</FONT></P>

<P><FONT FACE="Times New Roman" SIZE="-2"> </FONT><FONT SIZE="-1"> </FONT>
<CENTER>
<TABLE ALIGN="CENTER" BORDER="1" WIDTH="453">
<TR VALIGN="TOP"><TD WIDTH="381"><FONT FACE="Times New Roman" SIZE="-2"> - Write-off of recoverable Seabrook costs</FONT></TD>
<TD WIDTH="72"><FONT FACE="Times New Roman" SIZE="-2">$5,060</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="2"><FONT FACE="Times New Roman" SIZE="-2"> - Write-off of deferred tax liability associated</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2"> with recoverable Seabrook costs</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-2">$3,644</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2"> - Recognition of deferred asset sale gain</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-2">$7,006</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="2"><FONT FACE="Times New Roman" SIZE="-2"> - Write-off of deferred tax associated with deferred</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2"> asset sale gain </FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-2">$2,795</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="2"><FONT FACE="Times New Roman" SIZE="-2"> - Write-off of SFAS 109 Regulatory Asset</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT FACE="Times New Roman" SIZE="-2"> associated with Seabrook</FONT></TD>
<TD><FONT FACE="Times New Roman" SIZE="-2">$2,795</FONT></TD></TR></TABLE>
</CENTER>

<P><FONT SIZE="-2"> </FONT>Upon formal liquidation of the subsidiary in December, 1999, approximately $14.1 million of the proceeds were transferred to the first mortgage trustee for paydown of long-term debt.
In addition, the $16.2 million classified as Deposits with Trustee-Asset Sale are proceeds from the parent's generating assets, and is also restricted to the pay down of long-term debt.
With the sale of the Company's generating assets in June, 1999, the Company purchased energy from the new owners, PDI, under an agreement that expired February 29, 2000, and
these purchases are classified as purchased energy .</P>

<P><FONT SIZE="-2">As part of the generating assets sale on June 8,1999, the Company has entered into two indemnity obligations with the purchaser, WPS-PDI. First, the
Company will be liable, with certain limitations, for certain Aroostook River flowage damage. This liability will continue for ten years after the sale and
shall not exceed $2,000,000 in the aggregate. Second, the Company has warranted the condition of the sites sold to WPS-PDI, with an aggregate limit of
$3,000,000 for two years after the date of sale, and five years after the sale for environmental claims. The Company is unaware of any pending claims
under either of these indemnity obligations.</FONT></P>

<P>7. <FONT SIZE="-2">ACCOUNTING PRONOUNCEMENTS</FONT></P>

<P><FONT SIZE="-2"> In June, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". It requires companies to record derivatives on their balance sheet at their fair value
depending on the intended use of the derivative. The new standard applies to all entities and the original effective date was June 15, 1999. On May 19, 1999, the FASB determined that the implementation
of the statement should be delayed for one year. Based on current business activities, the Company is reviewing the impact, if any, that EA's energy contracts will have when this pronouncement is
implemented in the future.</FONT></P>

<BR WP="BR1"><BR WP="BR2">
<P ALIGN="CENTER"><FONT SIZE="-2">-13-</FONT></P>

<P ALIGN="RIGHT"><FONT SIZE="-1">Form 10-Q</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1"><U>PART 1. FINANCIAL INFORMATION</U></FONT></P>

<P><FONT SIZE="-1"><U>Item 2.Management's Analysis of Quarterly Income Statements</U></FONT></P>

<P><FONT SIZE="-1"><U>Forward-Looking Statements</U></FONT></P>

<P><FONT SIZE="-1">The discussion below may contain "forward-looking statements", as defined in the Private Securities Litigation Reform Act of 1995, related to expected
future performance or our plans and objectives. Actual results could potentially differ materially from these statements. Therefore, there can be no
assurance that actual results will not materially differ from expectations.</FONT></P>

<P><FONT SIZE="-1">Factors that could cause actual results to differ materially from our projections include, among other matters, electric utility restructuring; future economic
conditions; changes in tax rates, interest rates or rates of inflation; developments in our legislative, regulatory, and competitive environment; and the
decommissioning cost of Maine Yankee.</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1"><U>Results of Operations</U></FONT></P>

<P><FONT SIZE="-1">Earnings per share and the net income available for common stock for the three months ended March 31, 2000 along with the corresponding information
for the previous year are as follows:</FONT>
<TABLE BORDER="1" WIDTH="550">
<TR VALIGN="TOP"><TD WIDTH="254"></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="164"><FONT SIZE="-1">Three Months Ended</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD COLSPAN="2" ALIGN="CENTER"><FONT SIZE="-1">March 31,</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">2000</FONT></TD>
<TD ALIGN="CENTER" WIDTH="132"><FONT SIZE="-1">1999</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Earnings per share </FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">$ 1.17</FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">$ 1.09</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Net income in thousands</FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">$ 1,891</FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">$ 1,759</FONT></TD></TR></TABLE>

<P><FONT SIZE="-1">For the first quarter of 2000 compared to the same quarter last year, the increase in consolidated earnings per share (EPS) of $.08 is attributable to the
following:</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1">-14-</FONT></P>

<BR WP="BR1"><BR WP="BR2">
<P ALIGN="RIGHT"><FONT SIZE="-1">Form 10-Q</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1"><U>PART 1. FINANCIAL INFORMATION</U></FONT></P>

<P><FONT SIZE="-1"><U>Item 2. Management's Analysis of Quarterly Income Statements</U></FONT></P>

<P><FONT SIZE="-1"><U>Results of Operations</U> (Continued)</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1">Change in EPS - First Quarter of 2000</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1"><U>Compared to First Quarter of 1999</U></FONT>
<CENTER>
<TABLE ALIGN="CENTER" BORDER="1" WIDTH="752">
<TR VALIGN="TOP"><TD WIDTH="625"></TD>
<TD ALIGN="CENTER" WIDTH="127"><FONT SIZE="-1">EPS</FONT></TD></TR>
<TR VALIGN="TOP"><TD></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">Increase (Decrease)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Decreased retail revenues and sales for resale due to deregulation starting March 1, 2000</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(.37)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Decrease in power procurement and Maine Yankee expenses, offset by amortization of stranded costs according to rate
stipulation beginning March 1, 2000</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">.30 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Reduction in net interest costs</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1"> .12 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Increase in Energy Atlantic net income</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">.08 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Gain on sale of land</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">.08 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Decrease in other revenues, principally earnings from investment in associated companies</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(.07)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Change in operating and maintenance expenses, principally legal, consulting, postage and salaries</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(.06)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">$ .08 </FONT></TD></TR></TABLE>
</CENTER>

<P><FONT SIZE="-1">With the start of retail competition on March 1, 2000, the Company's retail revenues will reflect transmission and distribution charges. Therefore, for the
first quarter of 2000 compared to the same quarter last year, retail revenues decreased, resulting in a $.37 decrease in earnings. Correspondingly, the
decrease in power procurement expenses reflects the elimination of purchased power expenses with the start of retail competition, resulting in a $.30
increase in earnings. Reduced net interest costs, which increased earnings per share by $.12, were a result of interest earned on the generating asset sale
proceeds, as well as the reduction of interest expense after a portion of the proceeds was used to reduce debt, partially offset by carrying charges on the
deferred gain on the generating asset sale. With the start of retail competition on March 1, 2000, Energy Atlantic, the Company's energy marketing
subsidiary, began serving retail customers as an independent energy supplier. Energy Atlantic's increase in net income resulted in an $.08 increase in
earnings per share. The Company sold a parcel of land in the first quarter of 2000, which also increased earnings per share by $.08. The decrease in other
revenues reflects a reduction in earnings from MEPCO due to the sale of a gas right-of-way in the first quarter of 1999, resulting in a $.07 decrease in
earnings per share. Additional operation and maintenance expenses decreased earnings by $.06 per share, primarily due to increased legal and consulting
expenses, and increased customer service and postage expenses resulting from the switch to monthly meter reading and billing. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1">-15-</FONT></P>

<P ALIGN="RIGHT"><FONT SIZE="-1">Form 10-Q</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1">PART 1. FINANCIAL INFORMATION</FONT></P>

<P><FONT SIZE="-1"><U>Item 2. Management's Analysis of Quarterly Income Statements</U></FONT></P>

<P><FONT SIZE="-1"><U>Results of Operations</U> (Continued) </FONT></P>

<P><FONT SIZE="-1">Consolidated operating revenues for the quarters ended March 31, 2000 and 1999, are as follows:</FONT>
<TABLE BORDER="1" WIDTH="735">
<TR VALIGN="TOP"><TD WIDTH="187"></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="118"><FONT SIZE="-1">2000</FONT></TD>
<TD COLSPAN="2" ALIGN="CENTER" WIDTH="128"><FONT SIZE="-1">1999</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">(Dollars in Thousands) </FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">$</FONT></TD>
<TD ALIGN="CENTER" WIDTH="152"><FONT SIZE="-1">MWH</FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">$</FONT></TD>
<TD ALIGN="CENTER" WIDTH="150"><FONT SIZE="-1">MWH</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Retail </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">14,576</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">146,102</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">15,141</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">134,155 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Sales for Resale </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">260</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">5,580</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">558</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">18,008</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Total Primary Sales</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">14,836</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">151,682</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">15,699</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">152,163</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Secondary Sales</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,922</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">67,437</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,875</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">66,265</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Other Revenues/Rev. Adjust.</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(191)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">- </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(105)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">- </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Total Operating Revenues</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">17,567</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">219,119</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">17,469</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">218,428</FONT></TD></TR></TABLE>

<P><FONT SIZE="-1">As explained earlier, because revenues do not include energy supply, comparisons with periods after February, 2000 are difficult. Primary sales in the first
quarter of 2000 were 151,682 MWH, a decrease of 481 MWH (.3%) from sales in the first quarter of 1999. Retail sales increased by 8.9% (11,947
MWH), reflecting increases in all customer classes: large commercial (22%), medium commercial (5.4%), residential (3.3%), and small commercial
(3.7%). Offsetting these increases was a decrease in Sales for Resale due to the termination of the sales agreement with Perth-Andover after the
generating asset sale on June 8, 1999. The new owners of the generating assets now provide service to Perth-Andover. Secondary sales increased by 1,172
MWH, reflecting an increase in sales by the Company's wholly-owned marketing subsidiary, Energy Atlantic, LLC (EA), to retail customers, offset by a
decrease in sales of Wyman output after the generating asset sale.</FONT></P>

<P><FONT SIZE="-1">Retail sales to customers for the first quarter of 2000 were $14,576,000 compared to $15,141,000 for the same period of 1999. The $1,047,000 increase in
secondary sales to $2,922,000 for the first quarter of 2000 is a result of the increased sales by EA noted above.</FONT></P>

<BR WP="BR1"><BR WP="BR2">
<P ALIGN="CENTER"><FONT SIZE="-1">-16-</FONT></P>

<P ALIGN="RIGHT"><FONT SIZE="-1">Form 10-Q</FONT></P>

<P ALIGN="CENTER"><FONT SIZE="-1">PART 1. FINANCIAL INFORMATION</FONT></P>

<P><FONT SIZE="-1"><U>Item 2. Management's Analysis of Quarterly Income Statements</U></FONT></P>

<P><FONT SIZE="-1"><U>Results of Operations</U> (Continued) </FONT></P>

<P><FONT SIZE="-1">For the quarters ended March 31, 2000 and 1999, total operating expenses were $15,418,000 and $14,980,000, respectively. The changes in operating
expenses and energy sources are as follows: </FONT>
<CENTER>
<TABLE ALIGN="CENTER" BORDER="1" WIDTH="100%">
<TR VALIGN="TOP"><TD></TD>
<TD COLSPAN="2" ALIGN="CENTER"><FONT SIZE="-1">Increase/(Decrease)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">(Dollars in Thousands)</FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">$</FONT></TD>
<TD ALIGN="CENTER"><FONT SIZE="-1">MWH</FONT></TD></TR>
<TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1">Purchased Power Expenses</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Maine Yankee</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(339)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">- </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Wheelabrator-Sherman </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(1693)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(15,195)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">NB Power </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">494 </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">15,940 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">PDI</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">273 </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">2,055 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Northeast Empire </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(536)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(15,876)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Other Purchases </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">1,300 </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">9,773 </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Deferred Fuel - amortization </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">692 </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">- </FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Total Purchased Power Expenses</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">191 </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(3,303)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Generating Expenses </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(566)</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(48,243)</FONT></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Other Operation & Maintenance Expenses </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">257 </FONT></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Depreciation </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(21)</FONT></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Amortization </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(133)</FONT></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Amortization of Stranded Costs</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">804 </FONT></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Income Taxes </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">7 </FONT></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Taxes Other than Income</FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(101)</FONT></TD>
<TD ALIGN="RIGHT"></TD></TR>
<TR VALIGN="TOP"><TD><FONT SIZE="-1">Total </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">438 </FONT></TD>
<TD ALIGN="RIGHT"><FONT SIZE="-1">(51,546)</FONT></TD></TR></TABLE>
</CENTER>

<P><FONT SIZE="-1">The 51,546 MWH decrease in energy supply reflects the start of retail competition on March 1, 2000, with the Company providing transmission and
distribution (delivery) services but no longer selling energy supply. The 48,243 MWH decrease in generation is a result of the sale of the Company's
generating assets on June 8, 1999 and, under an agreement that expired on February 29, 2000, the Company purchased the output from the new owners,
PDI. Wheelabrator-Sherman (W-S) purchases also decreased by $1,693,000 (15,195 MWH). Beginning on March 1, 2000, as a result of competitive
bidding, PDI is paying market price to the Company for the W-S output, and the above-market amount is included in stranded cost amortization, i.e.,
$1,082,000 for March, 2000. Purchases from NB Power increased 15,940 MWH and other purchases increased by 9,773 MWH because of the increase in
power marketing activities classified as secondary sales. Purchases from Northeast </FONT><FONT FACE="Times New Roman" SIZE="-1">Empire decreased by 15,876 MWH due to</FONT></P>

<P ALIGN="CENTER">-17-</P>

<P ALIGN="RIGHT">Form 10-Q</P>

<P ALIGN="CENTER">PART 1. FINANCIAL INFORMATION</P>

<P><U>Item 2. Management's Analysis of Quarterly Income Statements</U></P>

<P><U>Results of Operations</U> (Continued) </P>

<P><FONT FACE="Times New Roman">the termination of those purchases on March 1, 2000. From February, 1998 until March 1, 2000, Northeast Empire
principally provided dispatchable Maine Yankee replacement power. The Company's share of Maine Yankee capacity
expenses decreased by $339,000. The increase in deferred fuel expense of $692,000 reflects the net increase in amortization
of Maine Yankee replacement power and the termination of the W-S fuel deferral in December, 1999. Generating expenses
decreased by $566,000 with the sale of generating assets as previously mentioned. Other operation and maintenance
expenses increased by $257,000 reflecting increases in legal and consulting expenses, and increases in customer service
and postage expenses due to the switch to monthly meter reading and billing. The amortization of stranded costs of
$804,000 reflects the recognition of stranded costs beginning March 1, 2000, including the W-S above-market costs
discussed above, in accordance with the Stipulation approved by the MPUC on January 27, 2000 (discussed further in Item
(b) of the Legal Proceedings section) providing for recovery of the Company's stranded investment. </FONT></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman"><U>Energy Atlantic Operations</U></FONT></P>

<P><FONT FACE="Times New Roman">Energy Atlantic's (EA) retail activity comprises standard offer service (SOS) and competitive energy supply (CES), both of
which utilize power provided via a contract with Engage Energy (Engage). Revenues are received and expenses are paid
directly by an escrow agent which is controlled by Engage. EA receives a percentage of the net profit from the sale of
energy. EA is the SOS provider for approximately 525,000 residential and small non-residential customers in the Central
Maine Power (CMP) service territory and was awarded 20% of the medium non-residential customer base in the
Company's service territory. The utilities bear SOS account collection risk, as they are required to remit the amounts billed
26 days after the billing date to EA's escrow account and maintain the billing and customer service relationship. EA records
the accrued net margin of the SOS activity as revenue in the financial statements. EA's CES activity is principally two large
industrial customers in CMP's service territory, as well as residential and small non-residential customers throughout
Maine. For CES sales, EA negotiates the price directly with the customer, maintains customer service responsibility and
has collection risk. CES activity is recorded on a gross basis to include the related revenues and purchased power expenses.</FONT></P>

<P><FONT FACE="Times New Roman">Energy Atlantic is subject to risk in scheduling electric load in the New England retail market. Under the terms of its
Wholesale Power Sales Agreement with Engage, EA is required to forecast its expected hourly load in the New England
market with the New England system operator, ISO-NE. If EA underforecasts that load, ISO-NE will provide the deficiency
at the spot price in the New England market, which is essentially the highest marginal cost in that market during that hour.
If that spot price is higher than the price at which EA has contracted to purchase power during that hour, EA is responsible
for a portion of that difference under the terms of its Sale Agreement with Engage. By way of illustration, prices in ISO-NE
rose as high as $6,000 per MWH during the afternoon of May 8, 2000. During that same period, EA had underforecasted its
actual load by 4% to 5%. Although the final numbers have not yet been determined, this underforecast could result in costs
to EA of as much as $500,000. Prices of $6,000 per MWH are approximately 197 times the average ISO-NE market price
of $30.50 per MWH for year-to-date May 7, 2000, and management considers this</FONT></P>

<BR WP="BR1"><BR WP="BR2">
<P ALIGN="CENTER">-18-</P>

<P ALIGN="RIGHT">Form 10-Q</P>

<P ALIGN="CENTER">PART 1. FINANCIAL INFORMATION</P>

<P><U>Item 2. Management's Analysis of Quarterly Income Statements</U></P>

<P><U>Results of Operations</U> (Continued)</P>

<P><FONT FACE="Times New Roman">event unusual and infrequent. Steps are being considered to mitigate the risks of such occurrences in the future.</FONT></P>

<P ALIGN="CENTER"><U>Liquidity</U></P>

<P><FONT FACE="Times New Roman">Net cash flows from operating activities were $2,048,000 for the first three months of 2000. For the period, the Company
paid $485,000 in dividends, used $25,000 to reduce long-term debt, drew down $2,500,000 of the asset sale proceeds from
the trustee and deposited $211,000 of proceeds from the sale of land into the trustee account. The Company also
repurchased 10,000 shares of common stock for $171,000 in order to manage its capital structure to limit common equity to
51%, as explained in Item (c) of the Legal Proceedings section, and reduced short-term borrowings by $900,000. For the
period, the Company invested $647,000 in electric plant, paid $7,853,000 in Canadian income taxes on the generating asset
sale, and received proceeds of $208,000 from the sale of land.</FONT></P>

<P>Net cash flows from operating activities were $2,227,000 for the first quarter of 1999. For the period, the Company
invested $632,000 in electric plant, paid $404,000 in dividends and used $25,000 to reduce long-term debt. Final financing
costs of $6,000 were paid related to the issuance of FAME's $11,540,000 Taxable Electric Rate Stabilization Revenue
Notes on behalf of the Company in 1998. Short-term borrowings decreased by $1,300,000 because of the cash flows from
operations.</P>

<P><U>Item 3. Quantitative and Qualitative Disclosures about Market Risk</U></P>

<P>(a) The Company has interest rate risk with two variable rate debt issues of the regulated business for purposes other than
trading. These issues are discussed in detail in the Company's 1999 Annual Report, which is Exhibit 13 of the Company's
1999 Form 10-K, which information is incorporated herein by reference. The discussion occurs in Note 9, "Long-Term
Debt", of the Notes to Consolidated Financial Statements.</P>

<P>(b) The Company's unregulated marketing subsidiary, Energy Atlantic, LLC (EA) is engaged in retail and wholesale energy
transactions for purposes other than trading. This activity exposes EA to a number of risks such as market liquidity,
forecasting, deliverability and credit risk. EA seeks to assure that risks are identified, evaluated and actively managed.</P>

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<P ALIGN="CENTER">-19-</P>

<P ALIGN="RIGHT">Form 10-Q</P>

<P ALIGN="CENTER"><U>PART II. OTHER INFORMATION</U></P>

<BR WP="BR1"><BR WP="BR2">
<P><U>Item 1. Legal Proceedings</U></P>

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<P>(a) <U>Restructuring of Maine's Electric Utility Industry</U></P>

<P>In the Company's Form 10-K's for December 31, 1996, 1997, 1998 and 1999, the Company described electric utility
restructuring efforts in Maine, including the Maine Public Utilities Commission's (MPUC) recommendation to the
legislature. After months of hearings and deliberations, the Maine legislature passed L.D. 1804, "An Act to Restructure the
State's Electric Industry", which the Governor signed into law on May 29, 1997.</P>

<P>The principal provisions of the law are as follows:</P>

<P>1) Beginning on March 1, 2000, all consumers of electricity have the right to purchase generation services directly from
competitive electricity suppliers who will not be subject to rate regulation.</P>

<P>2) By March 1, 2000, the Company, Central Maine Power Company (CMP) and Bangor Hydro-Electric Company (BHE)
must divest of all generation related assets and business functions except for:</P>

<P>(a) contracts with qualifying facilities, such as the Company's power contract with Wheelabrator-Sherman (W-S), and
conservation providers;</P>

<P>(b) nuclear assets, namely, the Company's investment in the Maine Yankee Atomic Power Company, however, the MPUC
may require divestiture on or after January 1, 2009;</P>

<P>(c) facilities located outside the United States, i.e., the Company's hydro facility in New Brunswick, Canada; and</P>

<P>(d) assets that the MPUC determines necessary for the operation of the transmission and distribution services. The MPUC
can grant an extension of the divestiture deadline if the extension will improve the selling price. For assets not divested, the
utilities are required to sell the rights to the energy and capacity from these assets. The Company sold its generating assets
on June 8, 1999.</P>

<P>3) Billing and metering services will be subject to competition beginning March 1, 2002, but permits the MPUC to
establish an earlier date, no sooner than March 1, 2000.</P>

<P>4) The Company, through an unregulated affiliate, may market and sell electricity both within and outside its current
service territory, without limitation. Both CMP and BHE are limited to 33% of the load within their respective service
territories, but may sell an unlimited amount outside their service territories. Consumer-owned utilities are allowed to
market and sell within their service territories, but the MPUC can limit or prohibit competition in their service territory, if
the tax-exempt status of the consumer-owned utility is threatened.</P>

<P>5) The Company will continue to provide transmission and distribution services which will be subject to continued
regulation by the MPUC.</P>

<P ALIGN="CENTER">-20-</P>

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<P ALIGN="RIGHT">Form 10-Q</P>

<P ALIGN="CENTER"><U>PART II. OTHER INFORMATION</U></P>

<P><U>Item 1. Legal Proceedings</U> - continued</P>

<P>6) Maine electric utilities will be permitted a reasonable opportunity to recover legitimate, verifiable and unmitigable costs
that are otherwise unrecoverable as a result of retail competition in the electric utility industry. The MPUC shall determine
these stranded costs by considering:</P>

<P>a) the utility's regulatory assets related to generation, i.e., the Company's unrecovered Seabrook investment;</P>

<P>b) the difference between net plant investment in generation assets compared to the market value for those assets; and</P>

<P>c) the difference between future contract payments and the market value of the purchased power contracts, i.e., the W-S
contract.</P>

<P>On January 27, 2000, the MPUC approved a Stipulation, as detailed further in Item 1(b) below, that provided for recovery
in rates of the Company's stranded investment.</P>

<P>The MPUC shall include in the rates to be charged by the transmission and distribution utility decommissioning expenses
for Maine Yankee. By 2003 and no later than every three years thereafter until the stranded costs are recovered, the MPUC
shall review and revaluate the stranded cost recovery.</P>

<P>7) All competitive providers of retail electricity must be licensed and registered with the MPUC and meet certain financial
standards, comply with customer notification requirements, adhere to customer solicitation requirements and are subject to
unfair trade practice laws. Competitive electricity providers must have at least 30% renewable resources in their energy
portfolios, including hydro-electric generation.</P>

<P>8) A standard offer service will be available, ensuring access for all customers to reasonably priced electric power.
Unregulated affiliates of CMP and BHE providing retail electric power are prohibited from providing more than 20% of the
load within their respective service territories under the standard offer service, while any unregulated affiliate of the
Company does not have a similar restriction.</P>

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<P>9) Unregulated affiliates of CMP and BHE marketing and selling retail electric power must adhere to specific codes of
conduct, including, among others:</P>

<P>a) employees of the unregulated affiliate providing retail electric power must be physically separated from the regulated
distribution affiliate and cannot be shared;</P>

<P>b) the regulated distribution affiliate must provide equal access to customer information;</P>

<P>c) the regulated distribution company cannot participate in joint advertising or marketing programs with the unregulated
affiliate providing retail electric power;</P>

<P>d) the distribution company and its unregulated affiliated provider of retail electric power must keep separate books of
accounts and records; and</P>

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<P ALIGN="CENTER">-21-</P>

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<P ALIGN="RIGHT">Form 10-Q</P>

<P ALIGN="CENTER"><U>PART II. OTHER INFORMATION</U></P>

<P><U>Item 1. Legal Proceedings</U> - continued</P>

<P>e) the distribution company cannot condition or tie the provision of any regulated service to the provision of any service
provided by the unregulated affiliated provider of electricity.</P>

<P>The MPUC shall determine the extent of separation required in the case of the Company to avoid cross-subsidization and
shall consider all similar relevant issues as well as the Company's small size.</P>

<P>(10) Employees, other than officers, displaced as a result of retail competition will be entitled to certain severance benefits
and retraining programs. These costs will be recovered through charges collected by the regulated distribution company.</P>

<P>(11) Other provisions of the new law include provisions for:</P>

<P>a) consumer education;</P>

<P>b) continuation of low-income programs and demand side management activities;</P>

<P>c) consumer protection provisions;</P>

<P>d) new enforcement authority for the MPUC to protect consumers.</P>

<P>(b) <U>Maine Public Service Company Investigation of Stranded Costs, Transmission and Distribution Utility Revenue
Requirements and Rate Design, Docket No. 98-577</U></P>

<P>On October 14, 1998, and subsequently amended on February 9, 1999 and August 11, 1999, the Company filed its
determination of stranded costs, transmission and distribution costs and rate design with the MPUC. The Company's
amended testimony supports its $95.7 million estimate of stranded costs, net of available value from the sale of the
generating assets, when deregulation began on March 1, 2000. The major components include the remaining investment in
Seabrook, the above market costs of the amended power purchase agreement and recovery of fuel expense deferrals related
to Wheelabrator-Sherman, the obligation for remaining operating expenses and recovery of the Company's remaining
investment in Maine Yankee, and the recovery of several other regulatory assets.</P>

<P>On October 15, 1999, the Company filed with the MPUC a Stipulation resolving the revenue requirement and rate design
issues for the Company's Transmission and Distribution (T&D) utility. This Stipulation has been signed by the Public
Advocate and approval will be recommended by the MPUC staff. Under the Stipulation, the Company's total annual T&D
revenue requirement will be $16,640,000, effective March 1, 2000. This revenue requirement includes a 10.7% return on
equity with a capital structure based on 51% common equity. The Stipulation further provides that the precise level of
stranded cost recovery cannot be determined until final determination of all costs associated with the sale of the Company's
generating assets, but does set forth some general principles concerning the Company's ultimate stranded costs recovery,
including agreement that the major components of the Company's stranded costs are legitimate, verifiable and unmitigable,
and therefore subject to recovery in rates, and that the 3.66% recovery foregone in Docket 98-865 shall be added to
stranded cost recovery in the manner specified in the stipulation in that Docket. The stipulation also provides that the
Company's recovery of unamortized investment tax credits and excess deferred </P>

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<P ALIGN="CENTER">-22-</P>

<P ALIGN="RIGHT">Form 10-Q</P>

<P ALIGN="CENTER"><U>PART II. OTHER INFORMATION</U></P>

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<P><U>Item 1. Legal Proceedings</U> - continued</P>

<P>income taxes associated with the Company's generating assets must await a final determination ruling from the IRS, which
ruling has been sought by Central Maine Power Company. On December 1, 1999, the MPUC approved this Stipulation. In
early January, 2000, CMP received its ruling from the IRS which concluded that the unamortized investment tax credits
and excess deferred income taxes associated with the sale of the generating assets could not be used to reduce customer
rates without violating the tax normalization rules for public utilities. </P>

<P>On January 27, 2000, the MPUC approved a Stipulation in Phase II of Docket No. 98-577 that provided for the recovery in
rates of the Company's stranded investment. The major element of the Phase II Stipulation was the $12.5 million of
stranded investment recoverable annually beginning March 1, 2000. This revenue requirement includes a return on
unrecovered stranded investment based on the capital structure approved by the MPUC in its December 1, 1999 Order. The
approved capital structure will consist of 51% common equity with an authorized return on equity of 10.7%. The Phase II
Stipulation also allowed the Company to offset its unrecovered stranded investment in Seabrook by approximately $7
million, representing an amount equal to 35% of the available value from the sale of the generation assets. The parties to
the Phase II Stipulation also resolved several rate design issues, principally the elimination of the inclining block rate for
residential customers. In addition, the Company was granted several accounting orders incorporating certain accounting
methodologies used in determining the elements of stranded costs. The annual revenue requirement associated with the
recovery of stranded costs will be reviewed every two years.</P>

<P>With the award of the standard offer rate on November 18, 1999, and orders approving the Company's T&D rates and
stranded investment recovery rates described above, the MPUC has established all elements of customer rates effective
March 1, 2000, the beginning of deregulation in Maine. On average, our customers' rates will be reduced by approximately
6%. </P>

<P>(c) <U>Maine Public Utilities Commission Approves Common Stock Repurchase Program, Docket No. 99-610</U></P>

<P>Reference is made to Item 3(e) of the Company's Form 10-K, in which the Company reported that stipulations resolving
revenue requirements and rate design issues for transmission and distribution rates, as well as stranded investment, have
been approved by the Maine Public Utilities Commission (MPUC). In the Stipulations, approved by the MPUC, the parties
also agreed to a capital structure consisting of 51% common equity and 49% of debt. After paying off debt with proceeds
from the sale of the Company's generating assets, as required under the Company's mortgage indentures, the Company
projects that the percentage of common equity as a component in its capital structure would exceed 51%. </P>

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<P>In order to manage its capital structure to limit common equity to 51%, the MPUC on November 17, 1999, approved the
Company's request to repurchase up to 500,000 shares of its common stock over a period of five years. The shares will be
repurchased through an open-market program. Previously over a five-year period from September, 1989 to September,
1994, the Company purchased 250,000 shares at a cost of $5.7 million, all of </P>

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<P ALIGN="CENTER">-23-</P>

<P ALIGN="RIGHT">Form 10-Q</P>

<P><U> PART II. OTHER INFORMATION</U></P>

<P><U>Item 1. Legal Proceedings</U> - continued</P>

<P>which are held in treasury shares, in order to maintain the Company's capital structure at levels appropriate for an
investor-owned electric utility. During the first quarter of 2000, the Company purchased 10,000 shares at a cost of
$171,000.</P>

<P><U>Item 4. Submission of Matters to a Vote of Security Holders</U></P>

<P>None </P>

<P><U>Item 5. Other Information</U></P>

<P>None</P>

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<P><U>Item 6. Exhibits and Reports on Form 8-K</U></P>

<P>(a) Exhibits - None</P>

<P>(b) A Form 8-K was filed on: February 8, 2000, under Item 5, Other Events.</P>

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<P ALIGN="CENTER"><U>SIGNATURE</U></P>

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<P>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.</P>

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<P><U>MAINE PUBLIC SERVICE COMPANY</U></P>

<P>(Registrant)</P>

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<P>Date: May 12, 2000 </P>

<P>By:<U> /s/ Larry E. LaPlante </U></P>

<P>Larry E. LaPlante</P>

<P>Vice President, Treasurer and</P>

<P>Chief Financial Officer </P>

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<P ALIGN="CENTER">24-</P>

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