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NORTHEAST UTILITIES-PSNH AFFILIATION COMPLETED

 NORTHEAST UTILITIES-PSNH AFFILIATION COMPLETED
 MANCHESTER, N.H., June 5 /PRNewswire/ -- Northeast Utilities


(NYSE: NU) (NU) and Public Service of New Hampshire (PSNH) this morning completed an affiliation designed to return PSNH to financial health and save nearly $1 billion for customers of the combined utility system.
 The final step of the affiliation occurred this morning when PSNH became a wholly owned operating subsidiary of NU. PSNH's 35.6 percent share of the Seabrook nuclear power plant is now owned by North Atlantic Energy Corporation (NAEC), a new NU subsidiary.
 As part of the merger arrangements, NU invested $586 million of equity in NAEC and PSNH. Those funds, along with $355 million raised by an NAEC first-mortgage bond sale completed today, will be used primarily to distribute $20 per share for each of PSNH's approximately 39.5 million outstanding shares of common stock.
 The affiliation represents the second step of a two-step plan that was designed in 1989 to return the then-bankrupt PSNH to financial health. The first step occurred in May 1991 when PSNH exited bankruptcy under a $2.3 billion reorganization plan.
 "This affiliation will end the decade of financial difficulty that has plagued PSNH, while allowing the company to retain the strong and dedicated customer service that has been its hallmark," said William B. Ellis, NU chairman and chief executive officer. "It will also bring hundreds of millions of dollars of savings to electric customers in Connecticut, New Hampshire and Western Massachusetts that otherwise would be simply unattainable."
 Ellis said the affiliation will bring significant savings to customers of the original NU system with no additional costs and virtually no risks to those customers. At the same time, it dramatically reduces the risks PSNH customers would have faced in the coming years had the company continued on its own.
 Ellis said PSNH will be operated more autonomously than other NU operating subsidiaries with its own president, Frank R. Locke, based at PSNH headquarters in Manchester, N.H. PSNH will have its own board of directors that will include a mixture of directors from both inside and outside the company.
 Additionally, Ellis announced today that with the merger complete, two New Hampshire residents, Cotton Mather Cleveland and John F. Swope, will join the NU Board of Trustees. Cleveland is president of Mather Associates, a New London, N.H., firm that specializes in human resources and organizational development. Swope is president of Chubb Life Insurance Company of America, based in Concord, N.H.
 NU first expressed interest in affiliating with PSNH in March 1988, two months after PSNH filed for protection from its creditors in United States Bankruptcy Court. In November 1989, after 20 months of negotiations, NU's plan was accepted by the state of New Hampshire and PSNH investors.
 Over the past 30 months, NU and PSNH have secured the endorsement of a number of government bodies, including the New Hampshire Legislature, New Hampshire and Connecuticut utiltity regulators, the United States Bankruptcy Court, the Nuclear Regulatory Commission (NRC), the Federal Energy Regulatory Commission (FERC) and the Securities and Exchange Commission (SEC). The NRC approvals were given at the end of May. As part of the affiliation, NU also becomes responsible for the operation of the Seabrook nuclear plant.
 NU financed the payment for PSNH's shares through both the sale over the past several months of nearly 25 million new NU common shares and today's sale of the NAEC bonds. The bonds, which come due over the next 10 years, were sold today and carry an interest rate of 9.05 percent.
 -0- 5/5/92
 /CONTACT: Jeffrey R. Kotkin, 203-665-3366 (office), 203-563-6463 (after hours); or Ian G. Wilson, 603-634-2572 (office), 603-669-4000 (after hours), of Northeast Utilities/
 (NU) CO: Northeast Utilities ST: New Hampshire, Connecticut IN: OIL SU: TNM


PB-CN -- NE008 -- 7466 06/05/92 12:39 EDT
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Date:Jun 5, 1992
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