NE ELECTRIC <NES> AUDITORS QUALIFY ANNUAL REPORT
New England Electric System's auditors
have again qualified the utility's annual report because of
uncertainty about whether its oil and gas subsidiary can
recover its investments.
    The qualification was noted in the annual report which New
England Electric released at a security analysts meeting today.
The auditors also qualified the company's 1985 report for the
same reason, noting the sharp drop in oil and gas prices in
early 1986.
    President Samuel Huntington told analysts the utility will
have to take a write-down of about 235 mln dlrs if Federal
regulators do not allow the company to pass on the losses cited
by the accountants to its rate payers.
 Reuter
