NE ELECTRIC SEES HIGHER CONSTRUCTION OUTLAYS
New England Electric System <NES>
expects its cash construction spending to reach 205 mln dlrs
this year, up from 188 mln dlrs in 1986, the utility said in
material distributed at an analysts meeting.
    It said spending is expected to advance to 215 mln dlrs in
1988 and 220 mln dlrs in 1989.
    The utility said these totals exclude spending on New
England Hydro-Transmission being built to import electricity
from Quebec Hydro. New England Electric is the operator of this
venture as well as owning 51 pct of the project.
    The venture expects to spend 65 mln dlr this year, 105 mln
dlrs next year and 125 mln dlrs in 1989 to build transmission
lines from northern Quebec into New England, the utility said.
    New England Electric said internally generated funds will
cover all of its power plant construction costs this year and
65 pct of the 108 mln dlrs its retail distribution units plan
to spend in 1987.
    The company said it also expects to spend 60 mln dlrs on
its oil and gas activities this year, adding internally
generated funds are expected to provide 85 pct of this total.
    New England Electric said it plans to issue 30 mln dlrs
worth of pollution control bonds in 1987 and retire additional
higher cost preferred stock. Its Granite State Electric unit
plans to issue five mln dlrs of long term notes early this year
as well.
    The company said it does not plan to offer common shares
this year or in the foreseeable future, but expects to raise
about 40 mln dlrs in equity through the sale of stock under its
dividend reinvestment plan and employee share plans.
    President Samuel Huntington told the analysts the
construction spending projection is based on the expectation
that demand for electricity in the New England electric system
will grow about two pct a year for the next 15 years.
    However, the utility cannot ignore the potential for
sharper growth, he said, pointing out that demand was up 5.2
pct in 1986 and 4.7 pct per year in the past four years.
    He attributed this growth to declining electricity prices
and a strong New England economy.
    Huntington said New England Elecetric has "all but rejected
new coal fired plants" to supply additional power.
    He said the most attractive new power supplies are those
with short lead times which can be built in modules.
    Later, vice president Glenn Schleede said the utility is
looking at gas-fired, combined cycle generating units to supply
most of its new power needs, but has not rejected coal-fired
fluidized bed units.
    He explained that fluidized bed technology is available in
modular units, adding that Huntington was referring to the
traditional coal-fired plant which burns pulverized coal.
 Reuter
