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U.S. Securities and Exchange Commission

National Grid Group plc Acquisition of
New England Electric System
Appendix D: Existing Nees Financing Authority

By order dated October 29, 1997 (Holding Co. Act Release No. 26768), the Commission authorized Massachusetts Electric, Nantucket, Narragansett, Massachusetts Hydro, NEP and the NEES Service Company (collectively, the "Borrowing Companies") to participate in the NEES money pool ("Money Pool") and to issue and sell commercial paper and short-term securities, all through October 31, 2001. The Borrowing Companies were authorized to borrow money and/or issue commercial paper up to the following amounts: $150 million for Massachusetts Electric, $5 million for Nantucket, $100 million for Narragansett, $25 million for Massachusetts Hydro, $375 million for NEP and $12 million for the NEES Service Company. By order dated June 2, 1998 (Holding Co. Act Release No. 26881), the Commission increased the limits on short-term borrowings by NEP from $375 million to $750 million.

By order dated October 9, 1996 (Holding Co. Act Release No. 26589), the Commission authorized NEES to issue and sell short-term notes in a principal amount of up to $100 million at any one time outstanding through October 31, 2001. This authority was increased by order dated December 10, 1997 (Holding Co. Act Release No. 26793), which authorized NEES to borrow up to $500 million. By orders dated March 25, 1998 and November 18, 1998 (Holding Co. Act Release Nos. 26849 and 26942), NEES was also authorized to issue up to two million shares of its common stock, through December 31, 2002, the proceeds of which would be used to acquire the stock or assets of one or more "energy-related companies," within the meaning of rule 58.

By order dated January 27, 1999 (Holding Co. Act Release No. 26969), NEES was authorized to invest up to $50 million in one or more new special purpose subsidiaries that will acquire interests in office and warehouse space that would be leased to associate companies. By order dated September 25, 1998 (Holding Co. Act Release No. 26918), NEP was authorized to repurchase up to five million shares of its common stock from NEES through December 31, 2000.