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DUFF & PHELPS: NARRAGANSETT ELECTRIC COMPANY $20 MILLION PERPETUAL PREFERRED STOCK RATED 'A' (PARENT: NEW ENGLAND ELECTRIC SYSTEM)

 CHICAGO, July 22 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A' (Single-A) to Narragansett Electric Company's offering for $20 million of perpetual preferred stock. Proceeds will be used to refund outstanding preferred stock and for general corporate purposes.
 Narragansett Electric's financial protection measures will be constrained as construction spending increases with conversion of the Manchester Street Station. This joint project with affiliate New England Power is expected to provide an additional 300 mw of capacity by 1995. Narragansett Electric has responsibility for 10 percent of the generation-related improvements and 100 percent of the transmission improvements. Over the next several years, the majority of construction will require external financings. Earnings retention and capital contributions from parent, New England Electric System, are expected to contain the debt leverage. A continuance of supportive regulation from the Rhode Island Commission will be necessary.
 The New England Electric System (NES), Narragansett Electric's parent, took a one-time $17.5 million after-tax charge associated with an early retirement and special severance package. The package was offered to 400 non-union employees throughout the NES system (including Narragansett) of which 344 accepted. This effort to streamline operations should improve the company's competitive posture and help mitigate increasing regulatory pressures.
 Narragansett Electric Company, a subsidiary of New England Electric System, provides electric service to a territory encompassing 82 percent of the area of Rhode Island. Most of Narragansett Electric's power supplies are provided by its Federal Energy Regulatory Commission regulated affiliate, New England Power Company.
 -0- 7/22/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/
 (NES)


CO: Narragansett Electric Company ST: Rhode Island IN: UTI SU: RTG

CK -- NY061 -- 4582 07/22/93 13:04 EDT
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Publication:PR Newswire
Date:Jul 22, 1993
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