<DOCUMENT>
<TYPE>U-1/A
<SEQUENCE>1
<FILENAME>u1a.txt
<DESCRIPTION>AMENDMENT NO. 2 TO FORM U-1 APPLICATION
<TEXT>
                                                               File No. 70-10227

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                ------------------------------------------------
                                 AMENDMENT NO. 2
                                       TO
                                    FORM U-1
                             APPLICATION-DECLARATION
                                      UNDER
                 THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
               ------------------------------------------------
           Emera Incorporated                 Bangor Hydro-Electric Company
              P.O. Box 910                           33 State Street
          Halifax, Nova Scotia                     Bangor, Maine 04401
                 Canada
                 B3J2W5

         Emera US Holdings Inc.          And the direct and indirect subsidiary
           BHE Holdings Inc.             companies of Emera Incorporated listed
           1209 Orange Street                     on Exhibit A hereto.
    New Castle, Wilmington, DE 19801

                ------------------------------------------------
                               Emera Incorporated

                (Name of top registered holding company parent of
                          each applicant or declarant)
                ------------------------------------------------

                                Richard J. Smith
                     Corporate Secretary and General Counsel
                                   Emera Inc.
                                  P.O. Box 910
                              Halifax, Nova Scotia
                                     Canada
                                     B3J2W5
                 -----------------------------------------------
                     (Name and address of agent for service)

<PAGE>


      The Commission is requested to send copies of all notices, orders and
             communications in connection with this application to:


                                 Markian Melnyk
                    LeBoeuf, Lamb, Greene & MacRae, L.L.P.
                             1875 Connecticut Avenue
                           Washington, D.C. 20009-5728

                                ph (202) 986-8000
                               fax (202) 986-8102




<PAGE>


                                TABLE OF CONTENTS


Item 1.     Description Of Proposed Transactions.............................1
   A. Introduction...........................................................1
   B. Description of the Companies...........................................1
   C. The Proposed Transactions..............................................3
      1.    Summary of Financing Authorization Requested.....................4
      2.    Parameters for Financing Authorization...........................5
      3.    Existing Capital Structure of Emera and BHE......................8
      4.    Description of Proposed Financing Program.......................10
      a.    Emera's External Financing......................................10
      b.    Common Stock....................................................10
      c.    Preferred Stock.................................................12
      d.    Long-Term Debt..................................................13
      e.    Short-Term Debt.................................................14
      f.    Hedges and Interest Rate Risk Management........................15
      g.    Guarantees......................................................17
      h.    Subsidiary Financing............................................18
      i.    Changes in Capital Stock of Wholly-Owned Subsidiaries...........22
      j.    Payment of Dividends Out of Capital or Unearned Surplus.........23
      k.    Financing Entities..............................................24
   D. Intermediate Subsidiaries and Nonutility Reorganizations..............26
   E. Canadian Energy Related Subsidiaries..................................30
   F. EWG and FUCO Investments..............................................31
   G. Reporting.............................................................38

Item 2.     Fees, Commissions And Expenses..................................41

Item 3.     Applicable Statutory Provisions.................................41
   A. Applicable Provisions.................................................41
   B. Legal Analysis........................................................41

Item 4.     Regulatory Approvals............................................42

Item 5.     Procedure.......................................................42

Item 6.     Exhibits And Financial Statements...............................42

Item 7.     Information As To Environmental Effects.........................43


                                       i

<PAGE>


Item 1.  Description Of Proposed Transactions

     A.   Introduction.

     Emera Incorporated ("Emera"), a registered public utility holding company
under the Public Utility Holding Company Act of 1935 (the "Act") requests
authorization for the financing program for Emera and its subsidiaries (the
"Emera Group") for the period beginning with the effective date of an order
issued pursuant to this filing and continuing through June 30, 2007
("Authorization Period"). Applicants request that the Commission reserve
jurisdiction over the transactions requested in this application for the period
from October 30, 2004 to June 30, 2007 until the record is complete, or as
further authorized by the Commission.

     B.   Description of the Companies

     Emera was formed under the laws of the Province of Nova Scotia, Canada in
1998. Emera became a registered holding company on October 11, 2001, after the
acquisition of the outstanding common stock of Bangor Hydro-Electric Company
("BHE"), a Maine electric public utility company. The acquisition of BHE was
authorized by Commission order dated October 1, 2001, Holding Co. Act Release
No. 27445 ("Acquisition Order"). In connection with the acquisition, Emera
organized two companies, Emera US Holdings Inc. ("Emera USH") and BHE Holdings
Inc. ("BHEH") to hold Emera's interest in BHE. Emera USH is a wholly-owned
direct subsidiary of Emera and BHEH is a wholly-owned direct subsidiary of Emera
USH. Emera USH and BHEH are registered holding companies under the Act.

     Emera's common stock is listed and traded on the Toronto Stock Exchange
("TSE"). The securities commissions of each of the provinces of Canada regulate
securities issuances by Emera and the company also is subject to the rules and
regulations of the TSE. Emera's public disclosure documents such as annual
reports and proxy statements are available on SEDAR, an electronic document
management system like


                                       1

<PAGE>


EDGAR, that is administered by the Canadian Securities Administrators, an
association of the provincial securities commissions.

     Emera is the parent of Nova Scotia Power Inc. ("NSPI"), a Canadian electric
utility company that owns and operates a vertically integrated electric utility
system in Nova Scotia. NSPI, which is classified as a foreign utility company or
"FUCO" under the Act, serves 440,000 customers in Nova Scotia with 2,183 MW of
generating capacity, approximately 5,200 km of transmission lines, 24,000 km of
distribution lines, associated substations and other facilities. Emera also owns
several other nonutility subsidiaries that are applicants herein and are
described in more detail in Exhibit A.

     For the twelve months ending December 31, 2003, Emera had revenues of
approximately CDN $1,231.3 million and income of CDN $129.2 million (US $878.9
and US $92.2, respectively). As of December 31, 2003, Emera had assets of
approximately CDN $3,840.9 million (US $2,971.9)./1

     BHE is a public utility and holding company exempt under Section 3(a)(1) of
the Act pursuant to the Acquisition Order. BHE provides the transmission and
distribution system for the delivery of electricity to approximately 123,000
Maine customers. The Maine Public Utilities Commission ("MPUC") regulates BHE
with respect to rates, maintenance of accounting records and various other
service and safety matters. BHE holds a 14.2% equity interest in Maine Electric
Power Company ("MEPCO"), a Maine utility that owns and operates electric
transmission facilities from Wiscasset, Maine to the Maine-New Brunswick border.
MEPCO is also owned by the unaffiliated entities, Central Maine Power Company
(78.3%) and Maine Public Service Company (7.5%). In addition, BHE owns a 50%
general partnership interest in Chester SVC Partnership ("Chester SVC"), through
BHE's wholly-owned subsidiary Bangor Var Co., Inc. ("Bangor Var"). Chester SVC
is a single-purpose financing entity formed to

--------------------
1 For convenience, 2003 revenue and income figures are translated from Canadian
to US dollars at CDN $1 = US $0.714. Asset figures as of December 31, 2003 are
translated at CDN $1 = US $0.774.


                                       2

<PAGE>


own a static var compensator, which is electrical equipment that supports the
New England Power Pool (NEPOOL)/Hydro Quebec Phase II transmission line. BHE
also owns several non-utility subsidiary companies, most of which are inactive,
that are described in more detail in Exhibit A.

     For the twelve months ending December 31, 2003, BHE had approximately
$143.1 million of utility operating revenues and income of $14.4 million. As of
December 31, 2003, BHE had utility assets of approximately $563.9 million.

     C.   The Proposed Transactions

     Emera, BHE, Emera USH, BHEH and the subsidiaries identified on Exhibit A
(collectively, the "Applicants") request authorization to engage in the
financing transactions set forth herein during the period from the effective
date of the order granted pursuant to this Application through the Authorization
Period. The financing authorization granted by the Acquisition Order expires on
June 30, 2004.

     Proceeds from the sale of securities in financing transactions will be used
for general corporate purposes, including financing the capital expenditures and
working capital requirements of the Emera Group, the acquisition, retirement or
redemption of securities previously issued by Emera Group companies, and for
authorized investments in companies organized in accordance with Rule 58 under
the Act, Canadian Energy Related Subsidiaries (defined infra), exempt wholesale
generators ("EWGs"), foreign utility companies ("FUCOs"), exempt
telecommunications companies ("ETCs") and for other lawful purposes.

     Applicants represent that no financing proceeds will be used to acquire the
securities of any company unless such acquisition has been approved by
Commission order, or it is in accordance with an available exemption under the
Act or the rules under the Act, including Sections 32, 33 and 34 and Rule 58.
Financing and guarantees used to fund investments in Rule 58 Subsidiaries will
be subject to the limitations of that rule.


                                       3

<PAGE>


     The authorizations sought by this Application should give the Applicants
flexibility to respond quickly and efficiently to their financing needs and to
changes in market conditions, permitting them to carry on business activities
designed to provide benefits to their customers and Emera's shareholders.
Approval of this Application is consistent with the Acquisition Order and
existing Commission precedent./2

          1.   Summary of Financing Authorization Requested

          Applicants seek the following Commission authorization:

          a.   Emera requests authorization to issue and sell through the
               Authorization Period up to $2 billion of securities at any one
               time outstanding (the "Emera External Limit") and to issue
               guarantees and other forms of credit support in an aggregate
               amount of $500 million at any one time outstanding (the "Emera
               Guarantee Limit");/3

          b.   Emera requests authority to enter into hedging transactions,
               including anticipatory hedges, with respect to its indebtedness
               to manage and minimize interest rate costs and to lock-in current
               interest rates;

          c.   Emera requests authorization to finance certain of its nonutility
               subsidiaries at a mark up to Emera's cost of funds.

          d.   Emera USH and BHEH request authorization to issue and sell
               securities to Emera, to finance one another through the issuance
               and acquisition of securities, and to finance BHE by acquiring
               its securities.

          e.   Emera requests authorization to change the terms of any
               wholly-owned subsidiary's authorized capital stock;

          f.   Emera's non-utility subsidiaries request authorization to pay
               dividends out of capital or unearned surplus;

--------------------
2 See e.g., Pepco Holdings Inc., Holding Co. Act Release No. 27557 (July 31,
2002); E.ON AG, Holding Co. Act Release No. 27539 (June 14, 2002); First Energy
Corporation, Holding Co. Act Release No. 27459 (Oct. 29 2001); Exelon
Corporation, Holding Co. Act Release No. 27266 (Nov. 2, 2000); Dominion
Resources, Inc., Holding Co. Act Release No. 27112 (Dec. 15, 1999); and
Conectiv, Inc., Holding Co. Act Release No. 26833 (Feb. 26, 1998).

3 The financing limits stated in this application are expressed in U.S.
dollars.


                                       4

<PAGE>


          g.   Emera and its subsidiaries request authorization to acquire the
               equity securities of one or more special purpose subsidiaries
               ("Financing Subsidiaries") organized solely to facilitate a
               financing transaction and to guarantee the securities issued by
               Financing Subsidiaries.

          h.   Emera requests that the Commission approve the issuance of up to
               5 million shares of common stock under dividend reinvestment and
               stock-based management incentive and employee benefit plans (the
               "Common Stock Plan Limit");

          i.   BHE requests authorization to issue and sell up to $100 million
               in short-term debt (the "BHE Limit");

          j.   Emera requests authorization to invest up to $300 million in
               certain energy-related companies that are doing business in
               Canada ("Canadian Energy Related Subsidiaries").

          k.   Emera requests authorization to issue and sell securities and
               guarantees in an aggregate amount of up to $2.0 billion (the
               "EWG-FUCO Investment Limit"), such amount to be included within
               the Emera External Limit and Emera Guarantee Limit proposed
               above, for the purpose of financing the acquisition of EWGs and
               FUCOs.

          l.   Emera requests authorization to restructure its non-utility
               interests from time to time, including to establish one or more
               intermediate subsidiaries organized exclusively for the purpose
               of acquiring, financing, and holding the securities of one or
               more existing or future non-utility subsidiaries.

          2.   Parameters for Financing Authorization

          Applicants propose that the following general terms and conditions
would apply, where appropriate, to the requested financing authorizations
("Financing Limitations"):/4

          a.   Effective Cost of Money.

          The effective cost of money on long-term debt borrowings in accordance
          with authorizations granted under the

--------------------
4 The Commission has previously authorized financing transactions subject to
these same general parameters.  See SCANA Corporation, Holding Co. Act
Release No. 27649 (Feb. 12, 2003).


                                       5

<PAGE>


          Application will not exceed the greater of (a) 500 basis points over
          the comparable-term U.S. or Canadian treasury securities or (b) a
          gross spread over U.S. or Canadian treasuries that is consistent with
          similar securities of comparable credit quality and maturities issued
          by other companies. The effective cost of money on short-term debt
          borrowings in accordance with the authorizations granted in the
          Application will not exceed the greater of (a) 500 basis points over
          the comparable-term London Interbank Offered Rate ("LIBOR") or (b) a
          gross spread over LIBOR that is consistent with similar securities of
          comparable credit quality and maturities issued by other companies.
          The dividend rate on any series of preferred stock, preferred
          securities or equity-linked securities will not exceed the greater of
          (a) 500 basis points over the yield to maturity of a U.S. or Canadian
          treasury security having a remaining term equal to the term of that
          series of preferred stock or (b) a rate that is consistent with
          similar securities of comparable credit quality and maturities issued
          by other companies./5

          b.   Maturity.

          The maturity of long-term debt will be between one and 50 years after
          the issuance thereof. Preferred securities and equity-linked
          securities will be redeemed no later than 50 years after the issuance
          thereof, unless converted into common stock. Preferred stock issued
          directly by Emera may be perpetual in duration. Short-term debt will
          mature within a year.

          c.   Issuance Expenses.

          The underwriting fees, commissions or other similar remuneration paid
          in connection with the non-competitive issue, sale or distribution of
          securities pursuant to this Application will not exceed the greater of
          (i) 5% of the principal or total amount of the securities being issued
          or (ii) issuance expenses that are generally paid at the time of

--------------------
5 Substantially similar interest rate provisions have been authorized by the
Commission in Energy East Corporation, et al., Holding Co. Act Release No.
27643 (January 28, 2003); E.ON AG, Holding Co. Act Release No. 27539 (June
14, 2002); Ameren Corp. et al., Holding Co. Act Release No. 27655 (February
27, 2003).


                                       6

<PAGE>


          the pricing for sales of the particular issuance, having the same or
          reasonably similar terms and conditions issued by similar companies of
          reasonably comparable credit quality./6

          d.   Common Equity Ratio.

          Emera will maintain common stock equity/7 as a percentage of total
          capitalization,/8 as shown in its most recent quarterly consolidated
          balance sheet, of at least 30% or above./9 In addition, BHE will
          maintain common stock equity of at least 30% of total capitalization
          as shown in its most recent quarterly balance sheet./10

          e.   Investment Grade Ratings.

          Applicants further represent that no guarantees or other securities,
          other than common stock, may be issued in reliance upon the
          authorization granted by the Commission pursuant to this Application,
          unless (i) the security to be issued, if rated, is rated investment
          grade; (ii) all outstanding securities of the issuer that are rated
          are rated investment grade; and (iii) all outstanding securities of
          Emera that are rated are rated investment grade. For purposes of this
          provision, a security will be deemed to be rated "investment grade" if
          it is rated investment grade by at least one nationally recognized
          statistical rating organization ("NRSRO"), as that term is used in
          paragraphs (c)(2)(vi)(E), (F) and (H) of Rule 15c3-1 under the
          Securities Exchange Act of 1934, as amended ("1934

--------------------
6 See e.g., NiSource, Inc., Holding Co. Act Release No. 27789 (December 30,
2003); SCANA Corp., Holding Co. Act Release No. 27649 (February 12, 2003).

7 Common stock equity includes common stock (i.e., amounts received equal to the
par or stated value of the common stock), additional paid in capital, retained
earnings and minority interests.

8 Applicants would calculate the common stock equity to total capitalization
ratio as follows: common stock equity (as defined in the immediately preceding
footnote)/(common stock equity + preferred stock + gross debt). Gross debt is
the sum of long-term debt, short-term debt and current maturities.

9 Emera will in any event be authorized to issue common stock (including
pursuant to stock-based plans maintained for shareholders, employees and
management) to the extent authorized herein.

10 BHE holds a 14.2% equity interest in MEPCO, which is also owned by the
unaffiliated entities Central Maine Power Company (78.3%) and Maine Public
Service Company (7.5%). MEPCO is required to maintain a minimum 30% common
equity to total capitalization by a Commission order issued to Energy East
Corp., Holding Co. Act Release No. 27643 (January 28, 2003). As a minority
shareholder, BHE is not in a position to control the equity level of MEPCO.


                                       7

<PAGE>


          Act")./11 Applicants further request that the Commission reserve
          jurisdiction over the issuance of any guarantee or other securities in
          reliance upon the authorization granted by the Commission pursuant to
          this Application at any time that the conditions set forth in clauses
          (i) through (iii) above are not satisfied.

          f.   Authorization Period.

          No security will be issued pursuant to the authorization sought herein
          after the last day of the Authorization Period.

          3.   Existing Capital Structure of Emera and BHE

     The capital structure of Emera and BHE on December 31, 2003, is shown in
the following table:

-----------------------------------------------------------------------------
As at December              Emera                        BHE
31, 2003
-----------------------------------------------------------------------------
                    (US $          % of Total       (US $       % of Total
                   millions)      Capitalization   millions)   Capitalization
-----------------------------------------------------------------------------
Common                 1,062.9          39.0%         192.9        52.8%
stockholders'
equity
-----------------------------------------------------------------------------
Non-controlling          201.8           7.4%            --           --
interest
-----------------------------------------------------------------------------
Preferred stock             --             --           0.6         0.2%
-----------------------------------------------------------------------------
Long-term debt
(including
current                1,358.6          49.9%         168.0        46.0%
portion)
-----------------------------------------------------------------------------

--------------------
11 Investment grade long-term debt is denoted by the Standard & Poor's ratings
of AAA, AA, A and BBB. The ratings may be modified by a plus (+) or minus (-) to
show relative standing within the rating categories. Moody's ratings of Aaa, Aa,
A and Baa denote investment grade long-term debt. Moody's applies numerical
clarifiers (1, 2 and 3) to denote relative ranking within a generic rating
category. Standard & Poor's short-term debt ratings range from A-1 for the
highest quality obligations to D for the lowest. Categories A-1 to A-3 are
investment grade. The A-1 rating may also be modified by a plus sign to
distinguish the strongest credits in that category. Moody's short-term issuer
ratings are Prime-1, Prime-2 and Prime-3, all of which are investment grade.
Fitch IBCA's ratings of AAA - BBB are denoted investment grade categories. A
plus (+) or minus (-) may be appended to a rating to denote relative status
within major rating categories.


                                       8

<PAGE>


-----------------------------------------------------------------------------
Short-term debt          100.0           3.7%           4.0         1.1%
-----------------------------------------------------------------------------
Total                 $2,723.3         100.0%        $365.5       100.0%
Capitalization
-----------------------------------------------------------------------------

     As of December 31, 2003, Emera had 108.26 million common shares issued and
outstanding. Emera also has a non-controlling minority interest attributable to
preferred shares that are held in NSPI and BHE. During 2003, BHE redeemed
substantially of its outstanding preferred shares. Additional information about
the NSPI and BHE preferred stock is included in note 19 to Emera's financial
statements, Exhibit FS-2 to this application.

     Emera's long-term debt instruments are issued under trust indentures at
fixed interest rates, and are unsecured, except for a small amount of privately
placed debt that is secured by a letter of credit. Also included in long-term
debt are certain bankers acceptances and commercial paper where Emera has the
intention and the unencumbered ability to refinance the obligations for a period
greater than one year. Emera also has short-term debt outstanding consisting of
commercial paper, bankers' acceptances and LIBOR loans issued against lines of
credit.

     The debt ratings of Emera, BHE and NSPI are set forth below:

Company/Type of facility                        Moody's    S&P      Fitch
------------------------                        -------    ---      -----
Emera/Long Term Corporate                         N/A      BBB+       -
            Senior Unsecured Debt                Baa2      BBB        -
NSPI/  Long Term Corporate                        N/A      BBB+       -
            Senior Unsecured Debt                Baa1      BBB+       -
            Commercial Paper                   P-2(Baa)  A-1(low)     -
BHE - not rated


                                       9

<PAGE>


          4.   Description of Proposed Financing Program

               a.   Emera's External Financing

     Emera proposes to issue equity and debt securities aggregating not more
than the Emera External Limit at any one time outstanding during the
Authorization Period./12 Such securities could include, but would not
necessarily be limited to, common stock, preferred stock, options, warrants,
purchase contracts, units (consisting of one or more purchase contracts,
warrants, debt securities, shares of preferred stock, shares of common stock or
any combination of such securities), long- and short-term debt (including
commercial paper), subordinated debt, bank borrowings, securities with call or
put options, and securities convertible into any of these securities./13 In
addition, Emera also seeks authorization to issue shares of common stock or
options to purchase shares under stock purchase/dividend reinvestment plans and
stock-based management incentive and employee benefit plans up to the Common
Stock Plan Limit. Securities issued under the Common Stock Plan Limit would not
reduce the capacity to issue securities under the Emera External Limit. Emera
may also issue guarantees and enter into interest rate swaps and hedges as
described below.

               b.   Common Stock

     Emera seeks authorization to issue common stock in an aggregate amount
outstanding not to exceed the Emera External Limit at any time during the
Authorization Period. Specifically, Emera proposes to issue and sell common
stock, options, warrants, purchase contracts, units, and other stock purchase
rights exercisable for common stock. Emera requests authorization, during the
Authorization Period, to issue and sell from time to time such securities,
either: (1) through underwritten public offerings, (2) in private

--------------------
12 The value of securities issued by Emera under the authority granted in the
Acquisition Order through the date of the order granting this application would
not be counted towards the Emera External Limit. To the extent a security issued
under the authorization requested herein is retired during the authorization
period, an equivalent amount of capacity under the Emera External Limit would be
made available for the issuance of additional securities.

13 Any convertible or equity-linked securities would be convertible into or
linked only to securities that Emera is otherwise authorized to issue directly
or indirectly through a financing entity on behalf of Emera.


                                       10

<PAGE>


placements, (3) under its dividend reinvestment, stock-based management
incentive and employee benefit plans and such other plans as may hereafter be
adopted, (4) in exchange for securities or assets being acquired from other
companies, and (5) in connection with redemptions of certain series of NSPI
preferred stock.

     Emera may perform common stock financings pursuant to underwriting
agreements of a type generally standard in the industry. Public distributions
may be made by private negotiation with underwriters, dealers or agents as
discussed below or through competitive bidding among underwriters. In addition,
sales may be made through private placements or other non-public offerings to
one or more persons. All such common stock sales will be at rates or prices and
under conditions negotiated or based upon, or otherwise determined by,
competitive capital markets. Underwriters may resell common stock from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. Emera
also may grant underwriters a "green shoe" option permitting common stock to be
offered solely for the purpose of covering over-allotments.

     Emera issues and sells common stock pursuant to its Common Shareholder
Dividend Reinvestment Plan and its Employee Common Share Purchase Plan, which
provide an opportunity for shareholders and company employees to reinvest
dividends and make cash contributions for the purpose of purchasing common
shares. Emera also has a stock option plan that grants options to the senior
management of Emera and its subsidiary companies for a maximum term of 10 years.
The option price for these shares is the market price of the shares on the day
prior to the option grant. Emera proposes to issue shares pursuant to these
plans and such other plans as may hereafter be adopted during the Authorization
Period subject to the Common Stock Plan Limit./14

--------------------
14 Emera proposes, from time to time during the Authorization Period to issue
and/or acquire its common stock in open market transactions or by another method
that complies with applicable law and Commission interpretations then in effect
in an amount up to the Common Stock Plan Limit to fund Emera's dividend
reinvestment plan, certain incentive compensation plans and certain other
employee benefit plans currently existing or that may be adopted in the future.
For example, Emera currently maintains the following stock-based benefit plans
for employees: 1) Emera Senior Management Stock Option Plan, which currently has
1.3 million treasury shares reserved; 2) Emera Common Share Purchase Plan, which
currently has 1.5 million treasury shares reserved; and 3) Emera Dividend
Reinvestment Plan.


                                       11

<PAGE>


     Emera may seek to acquire securities of companies engaged in energy-related
businesses as described in Rule 58, Canadian Energy Related Subsidiaries, or
other businesses authorized by the Act, the rules thereunder or by Commission
order. These acquisitions may involve the exchange of Emera stock for securities
of the company being acquired in order to provide the seller with certain tax
advantages. These transactions would be individually negotiated. The Emera
common stock to be exchanged may be purchased on the open market, or may be
original issue. Original issue stock may be registered or qualified under
applicable securities laws or unregistered and subject to resale restrictions.
Emera does not intend to engage in any transaction where original issue stock is
not registered or qualified while a public offering is being made, other than a
public offering pursuant to a compensation, dividend or stock purchase plan, or
a public offering of debt. Subject to the foregoing, Emera accordingly seeks
authorization to issue common stock or options, warrants or other stock purchase
rights exercisable for common stock in public or privately negotiated
transactions as consideration for the equity securities or assets of other
companies, provided that the acquisition of any equity securities or assets has
been authorized by the Commission or is exempt under the Act or rules under the
Act.

     The ability to offer stock as consideration may make a transaction more
economical for Emera as well as for the seller of the business. For purposes of
calculating compliance with the Emera External Limit, Emera's common stock would
be valued at market value based upon the negotiated agreement between the buyer
and the seller.

               c.   Preferred Stock

     Emera may issue preferred stock from time to time during the Authorization
Period in accordance with the Financing Limitations and the Emera External
Limit.


                                       12

<PAGE>


Preferred stock or other types of preferred or equity-linked securities may be
issued in one or more series with such rights, preferences, and priorities as
may be designated in the instrument creating each such series, as determined by
Emera's board of directors./15 Dividends or distributions on preferred stock or
other preferred securities will be made periodically and to the extent funds are
legally available for such purpose, but may be made subject to terms that allow
the issuer to defer dividend payments for specified periods. Preferred stock or
other preferred securities may be convertible or exchangeable into shares of
Emera common stock or unsecured indebtedness.

               d.   Long-Term Debt

     Emera proposes to issue long-term debt in accordance with the Financing
Limitations and the Emera External Limit. Long-term debt would be unsecured and
have the maturity, interest rate(s) or methods of determining the same, terms of
payment of interest, redemption provisions, sinking fund terms and other terms
and conditions as Emera may determine at the time of issuance. Any long-term
debt: (i) may be convertible into any other authorized securities of Emera;/16
(ii) will have maturities ranging from one to 50 years; (iii) may be subject to
optional and/or mandatory redemption, in whole or in part, at par or at various
premiums above the principal amount; (iv) may be entitled to mandatory or
optional sinking-fund provisions; (v) may provide for reset of the coupon
pursuant to a remarketing arrangement; (vi) may be subject to tender or the
obligation of the issuer to repurchase at the election of the holder or upon the
occurrence of a specified event; or (vii) may be called from existing investors
by a third party. The request for authorization for Emera to issue long-term
debt

--------------------
15 Any convertible or equity-linked securities would be convertible into or
linked to securities that Emera is otherwise authorized to issue directly or
indirectly through a financing entity on behalf of Emera.

16 See note 15, above.


                                       13

<PAGE>


securities is consistent with authorization that the Commission has granted to
other registered holding companies and the Acquisition Order./17

               e.   Short-Term Debt

     Emera requests authorization to issue directly, or indirectly through
Financing Subsidiaries existing or to be formed under the authorization
requested herein, short-term debt including, but not limited to, institutional
borrowings, commercial paper and bid notes. The issuance of short-term debt will
be in accordance with the Financing Limitations and the Emera External Limit.
Proceeds of any short-term debt issuance may be used to refund Emera's
outstanding debt securities and to provide financing for general corporate
purposes, working capital requirements and the capital expenditures of the Emera
Group until long-term financing can be obtained. Short-term debt issued by Emera
will be unsecured.

     Emera may sell commercial paper, from time to time, in established domestic
Canadian, U.S. or European commercial paper markets. Such commercial paper would
be sold to dealers at the discount rate or the coupon rate per annum prevailing
at the date of issuance for commercial paper of comparable quality and
maturities sold to commercial paper dealers generally. It is expected that the
dealers acquiring commercial paper from Emera will reoffer such paper at a
discount to corporate, institutional and, with respect to European commercial
paper, individual investors. Institutional investors are expected to include
commercial banks, insurance companies, pension funds, investment trusts,
foundations, colleges and universities and finance companies.

--------------------
17 See Southern Co., Holding Co. Act Release No. 27134 (February 9, 2000);
Columbia Energy Group, Holding Co. Act Release No. 27035 (June 8, 1999).  A
restriction against parent-level debt would be a unreasonable financial
burden that is not necessary or appropriate in the public interest or for the
protection of investors or consumers because it may interfere with Emera's
ability to implement an optimal capital structure for its business.  Prior to
issuing debt, preferred securities or equity, Emera will evaluate the
relevant financial implications of the issuance, including without limit, the
cost of capital, and select the security that provides the most efficient
capital structure consistent with sound financial practices and the capital
markets.


                                       14

<PAGE>


     Emera also proposes to establish bank lines of credit, directly or
indirectly through one or more financing subsidiaries. Loans under these lines
will have maturities of less than one year from the date of each borrowing.
Alternatively, if the notional maturity of short-term debt is greater than 364
days, the debt security will include put options at appropriate points in time
to cause the security to be accounted for as a current liability under US
generally accepted accounting principles./18 Emera may engage in other types of
short-term financing generally available to borrowers with comparable credit
ratings as it may deem appropriate in light of its needs and market conditions
at the time of issuance. All short-term debt issued by Emera during the
Authorization Period would be included within Emera's External Limit and would
be subject to the Financing Limitations. Unused borrowing capacity under a
credit facility would not count towards Emera's External Limit.

               f.   Hedges and Interest Rate Risk Management

     Emera requests authorization to enter into, perform, purchase and sell
financial instruments intended to manage the volatility of interest rates,
including but not limited to interest rate swaps, caps, floors, collars and
forward agreements or any other similar agreements. Hedges may also include the
issuance of structured notes (i.e., a debt instrument in which the principal
and/or interest payments are indirectly linked to the value of an underlying
asset or index), or transactions involving the purchase or sale, including short
sales, of U.S. Treasury or agency (e.g., Federal National Mortgage Association)
obligations or LIBOR based swap instruments (collectively, "Hedge Instruments").
Emera would employ Hedge Instruments as a means of prudently managing the risk
associated with any of its outstanding debt by, in effect, synthetically (i)
converting variable rate debt to fixed rate debt, (ii) converting fixed rate
debt to variable rate debt, (iii) limiting the impact of changes in interest
rates resulting from variable rate debt and (iv) providing an option to enter
into interest rate swap transactions

--------------------
18  See Enron Corp., Holding Co. Act Release No. 27809 (March 9, 2004)
(authorizing similar treatment for debt with a notional maturity greater than
364 days for Portland General Electric Company).


                                       15

<PAGE>


in future periods for planned issuances of debt securities. In no case will the
notional principal amount of any Hedge Instrument exceed that of the underlying
debt instrument and related interest rate exposure. Thus, Emera will not engage
in "leveraged" or "speculative" transactions. The underlying interest rate
indices of such Hedge Instrument will closely correspond to the underlying
interest rate indices of Emera's debt to which such Hedge Instrument relates.
Off-exchange Hedge Instruments would be entered into only with counterparties
whose senior debt ratings are investment grade/19 ("Approved Counterparties").

     In addition, Emera requests authorization to enter into Hedge Instruments
with respect to anticipated debt offerings ("Anticipatory Hedges"), subject to
certain limitations and restrictions. Anticipatory Hedges would only be entered
into with Approved Counterparties, and would be used to fix and/or limit the
interest rate risk associated with any new issuance through (i) a forward sale
of exchange-traded Hedge Instruments ("Forward Sale"), (ii) the purchase of put
options on Hedge Instruments ("Put Options Purchase"), (iii) a Put Options
Purchase in combination with the sale of call options on Hedge Instruments (
"Zero Cost Collar"), (iv) transactions involving the purchase or sale, including
short sales, of Hedge Instruments, or (v) some combination of a Forward Sale,
Put Options Purchase, Zero Cost Collar and/or other derivative or cash
transactions, including, but not limited to structured notes, caps and collars,
appropriate for the Anticipatory Hedges.

     Hedging Instruments may be executed on-exchange ("On-Exchange Trades") with
brokers through the opening of futures and/or options positions traded on the
Chicago Board of Trade, the opening of over-the-counter positions with one or
more counterparties ("Off-Exchange Trades"), or a combination of On-Exchange
Trades and Off-Exchange Trades. Emera will determine the optimal structure of
each Hedging Instrument transaction at the time of execution.

--------------------
19 See note 11 supra.


                                       16

<PAGE>


     Emera will comply with applicable standards relating to accounting for
derivative transactions as are adopted and implemented by the Financial
Accounting Standards Board ("FASB") or Canadian GAAP. In addition, Emera will
endeavor to qualify these financial instruments for hedge accounting treatment
under FASB rules. In the event transactions in financial instruments or products
are qualified for hedge accounting treatment under Canadian GAAP, but not under
US GAAP, Emera's financial statements filed with the Commission will contain a
reconciliation of the difference between the two methods of accounting
treatment. No gain or loss on a hedging transaction entered into by Emera or its
subsidiaries (except BHE and its subsidiaries) will be allocated to BHE or its
subsidiaries, regardless of the accounting treatment accorded to the
transaction.

     BHE requests authorization to enter into the transactions described above
on the same terms applicable to Emera, except that BHE would comply with
applicable FASB standards and US GAAP.

               g.   Guarantees

     Emera and BHE request authorization to enter into guarantees, obtain
letters of credit, enter into expense agreements or otherwise provide credit
support ("Guarantees") with respect to the obligations of their respective
subsidiaries as may be appropriate or necessary to enable such subsidiaries to
carry on in the ordinary course of their respective businesses in an aggregate
principal amount not to exceed the Emera Guarantee Limit outstanding at any one
time (not taking into account obligations exempt under Rule 45) with respect to
guarantees issued by Emera and $55 million with respect to guarantees issued by
BHE. All debt guaranteed will comply with the Financing Limitations. Included in
this amount are Guarantees entered into by Emera that were previously issued in
favor of its subsidiaries to the extent that they remain outstanding during the


                                       17

<PAGE>


Authorization Period./20 The limit on Guarantees is separate from the Emera
External Limit. As of December 31, 2003, Emera had outstanding Guarantees on
behalf of subsidiaries in an aggregate amount of approximately $242.0 million
and BHE had outstanding Guarantees in the amount of $27.3 million.

     Guarantees may take the form of, among others, direct guarantees,
reimbursement undertakings under letters of credit, "keep well" undertakings,
agreements to indemnify, expense reimbursement agreements, and credit support
with respect to the obligations of the subsidiary companies as may be
appropriate to enable such system companies to carry on their respective
authorized or permitted businesses. Emera may, for example, provide credit
support to Emera Energy Inc. or Emera Energy Services Inc. in connection with
energy trading, transportation and physical commodity contracts. BHE may need
guarantee authorization to provide credit support for a subsidiary engaged in
utility construction activity. Any guarantee that is outstanding at the end of
the Authorization Period shall remain in force until it expires or terminates in
accordance with its terms.

     Certain Guarantees may be in support of obligations that are not capable of
exact quantification. In these cases, Emera and BHE will determine the exposure
under a Guarantee for purposes of measuring compliance with their respective
guarantee limit by appropriate means, including estimation of exposure based on
loss experience or potential payment amounts. Each subsidiary may be charged a
fee for any Guarantee provided on its behalf that is not greater than the cost,
if any, of obtaining the liquidity necessary to perform the Guarantee for the
period of time the Guarantee remains outstanding.

               h.   Subsidiary Financing

     Emera seeks authorization to finance the capital requirements of its
subsidiaries and to fund their authorized or permitted businesses through the
acquisition of the

--------------------
20 A guarantee of the securities issued by a financing subsidiary would not
count against the issuer's guarantee limit but the amount of the guarantee would
count against the guarantor's external financing limit.


                                       18

<PAGE>


securities of subsidiaries issued under the Act, the Commission's rules,
regulations or orders, and within any limits applicable to investments in EWGs,
FUCOs, Rule 58 subsidiaries and Canadian Energy Related Subsidiaries.

Market Rate Subsidiaries

     Under the Acquisition Order Emera was granted authorization to lend funds
to certain of its nonutility subsidiaries at a mark up to Emera's cost of funds.
Emera requests that this authorization be continued for the Authorization
Period. The authorization requested would apply to borrowings by all
subsidiaries except (i) BHE, (ii) any of BHE's direct or indirect subsidiaries,
(iii) Emera's U.S. nonutility subsidiaries, and (iv) NSPI, (the "Market Rate
Subsidiaries"). The authorization requested would apply to loans from Emera or
NSPI to Market Rate Subsidiaries and to loans between such companies. Emera
requests such authority principally to allow it to operate its businesses
efficiently under Canadian tax regulations.

     As explained in Emera's application in SEC File No. 70-9787, which was
granted by the Acquisition Order, the Income Tax Act (Canada) and the
Regulations promulgated thereunder (collectively the "ITA") requires borrowed
funds to be used for the purpose of earning income before it allows a taxpayer a
deduction in calculating taxable income, for the interest expense associated
with a borrowing. This restriction flows from the fundamental principle in the
ITA that each taxable company is a separate and distinct entity for tax
purposes. Consequently, Emera must earn income from lending its external
borrowings to its subsidiaries or Emera will not be permitted a deduction of the
related interest expense in calculating its taxable income under the ITA. Each
company must independently demonstrate a business purpose for incurring debt. If
Emera would be required to lend funds to its Market Rate Subsidiaries at cost,
Emera would not be eligible, under the rules for computation of taxable income
in the ITA and the rules of administrative practice adopted by Canada's Customs
and Revenue Agency


                                       19

<PAGE>


("Revenue Canada"), (the administrative body responsible for the administration
of the ITA) for an interest expense deduction on such borrowed funds.

     Because the ITA treats each company as a separate and distinct entity for
Canadian income tax purposes, an associated group of Canadian companies also
cannot file a consolidated tax return. Therefore, unlike U.S. corporate groups,
Canadian groups cannot use losses from affiliated companies to offset income
from other companies in the same corporate group. Intercompany loans at market
rates may be used where appropriate to adjust taxable income among the group
members. The proposed market rate loan authority, therefore, would allow Emera
to implement the most economically efficient financial structure given its tax
constraints.

     Emera would determine the appropriate market rate for loans from Emera or
NSPI to each Market Rate Subsidiary, or between Market Rate Subsidiaries, in
much the same manner practiced by an independent bank. Emera would review the
nature of each subsidiary's business, evaluate its capital structure, the
particular risks to which it is subject, and generally prevailing market
conditions. Emera would also evaluate and take into account information from
third parties such as banks that would indicate the prevailing market rates for
similar businesses. In particular, Emera will obtain information on the range of
rates used by one or more banks for loans to similar businesses. Such
independent third-party information would serve as an index against which an
appropriate market rate could be determined. Emera would provide its analysis
supporting its market-based rate determination to the Commission upon
request./21

Financing BHE

     Emera intends to finance BHE's capital needs at the lowest practical cost.
BHE will either finance its capital needs through short, medium and long-term
borrowings from nonassociated entities or through borrowings from Emera
directly, or indirectly


                                       20

<PAGE>


through Emera USH and BHEH./22 BHE also proposes to borrow funds from NSPI if
NSPI has surplus funds and the interest rate on the loan would result in a lower
cost of borrowing for BHE. All borrowings by BHE from an associate company would
be at the lower of Emera's effective cost of capital, NSPI's effective cost of
capital (if NSPI is the lender) or BHE's effective cost of capital incurred in a
direct borrowing at that time from nonassociates for a comparable term loan./23
In addition, borrowings by BHE from an associate company would be unsecured,
i.e., not backed by the pledge of specific BHE assets as collateral.

        The MPUC exercises jurisdiction over the securities issued by BHE with
maturities of one year or longer. BHE requests Commission authorization to issue
and sell securities with maturities of less than one year. Such short-term debt
issued and outstanding at any time during the Authorization Period will not
exceed the BHE Limit.

Financing Emera USH and BHEH

     Emera USH requests authorization to issue and sell securities to Emera and
NSPI and to acquire securities from BHEH and BHE. BHEH requests authorization to
issue and sell securities to Emera, NSPI and Emera USH and to acquire securities
from BHE. Each of Emera USH and BHEH also seeks authority to issue guarantees
and other forms of credit support for the benefit of their direct and indirect
subsidiaries. Emera USH and BHEH would not borrow, or receive any extension of
credit or indemnity from any of their respective direct or indirect subsidiary
companies.

     Each of Emera USH and BHEH is intended to function as a financial conduit
to facilitate Emera's U.S. investments. As authorized by the Acquisition Order,
for reasons of economic efficiency, the terms and conditions of any securities
issued by Emera USH

--------------------
21 Similar market rate financing authorization was granted in E.ON AG, Holding
Co. Act Release No. 27539 (June 14, 2002).

22 BHE's nonutility subsidiaries will
finance their capital needs through the issuance of securities under Rule 52(b).

23 Emera will report to the Commission in its Rule 24 certificates filed
hereunder the lender, principal amount, term and interest rate applicable to any
loans between an associate company and BHE. The report will also explain how the
interest rate was determined, including whether benchmarking or other methods
were used to establish the interest rate charged to BHE in connection with the
loan.


                                       21

<PAGE>


and BHEH to an associate company will be on an arm's length basis. The financing
proposed herein would be used to fund the capital requirements of BHE and its
subsidiaries and any exempt or subsequently authorized activity that is
hereafter acquired. Such financing would not be used by Emera USH or BHEH to
carry on business or investment activities, other than as described herein.

               i.   Changes in Capital Stock of Wholly-Owned Subsidiaries

     Applicants request authority to change the terms of any wholly-owned
subsidiary's authorized capital stock capitalization by an amount deemed
appropriate by Emera or other intermediate parent company. The portion of an
individual subsidiary's aggregate financing to be effected through the sale of
stock to Emera or other immediate parent company during the Authorization Period
pursuant to Rule 52 and/or an order issued in this file is unknown at this time.
The proposed sale of capital securities (i.e., common stock or preferred stock)
may in some cases exceed the then authorized capital stock of such subsidiary.
In addition, the subsidiary may choose to use capital stock with no par value.
The relief requested herein would provide necessary financing flexibility.

     The requested authorization is limited to Emera's wholly-owned subsidiaries
and will not affect the aggregate limits or other conditions contained herein. A
subsidiary would be able to change the par value, or change between par value
and no-par stock, without additional Commission approval. Any such action by BHE
or any other public utility company would be subject to and would only be taken
upon the receipt of any necessary approvals by the MPUC or other public utility
commission with jurisdiction over the transaction. As noted previously, BHE will
maintain, during the Authorization Period, a common equity capitalization of at
least 30%./24

--------------------
24 See New Century Energies, Inc., Holding Co. Act Release No. 26750 (Aug. 1,
1997); Conectiv, Inc., Holding Co. Act Release No. 26833 (Feb. 26, 1998);
Dominion Resources, Inc., Holding Co. Act Release No. 27112 (Dec. 15, 1999).


                                       22

<PAGE>


               j.   Payment of Dividends Out of Capital or Unearned Surplus

     Upon the acquisition of BHE by Emera, the retained earnings of BHE were
eliminated. The goodwill resulting from the transaction was pushed down to BHE
and reflected as additional paid-in-capital in its financial statements. The
effect of these accounting adjustments was to leave BHE without retained
earnings, the traditional source of dividend payment, but, nevertheless, a
strong balance sheet showing a significant equity level. Accordingly, the
Acquisition Order permitted BHE to pay dividends and or to repurchase or redeem
its common stock held by its associate company parent after the acquisition out
of its additional paid-in-capital up to the amount of BHE's pre-acquisition
retained earnings plus any amortization or write-down of goodwill charged
against post-acquisition earnings. The Acquisition Order provided, however, that
in no event would dividends paid or share repurchases and redemptions cause
BHE's common equity capitalization to fall below 30% of total capitalization.
BHE will continue to rely on the Acquisition Order for the dividend
authorization summarized above.

     Applicants now request authorization for the nonutility companies in the
Emera Group, excluding NSPI, to pay dividends with respect to the securities of
such companies, from time to time through the Authorization Period, out of
capital and unearned surplus to the extent permitted under applicable corporate
law and state or national law applicable in the jurisdiction where each company
is organized, and any applicable financing covenants./25 In addition, each of
such nonutility companies will not declare or pay any dividend out of capital or
unearned surplus unless it: (i) has received excess cash as a result of the sale
of some or all of its assets; (ii) has engaged in a restructuring or
reorganization; and/or (iii) is returning capital to an associate company.

     Emera anticipates that there will be situations in which a nonutility
subsidiary will have unrestricted cash available for distribution in excess of
such company's current

--------------------
25 See FirstEnergy Corp., Holding Co. Act Release No. 35-27459 (Oct. 29,
2001).


                                       23

<PAGE>


and retained earnings. In such situations, the declaration and payment of a
dividend would have to be charged, in whole or in part, to capital or unearned
surplus. The sale of an asset, for example, may provide cash in excess of the
selling company's retained earnings. In addition, distributions out of capital
may be necessary in connection with winding down a subsidiary. Further, there
may be periods during which unrestricted cash available for distribution by a
nonutility subsidiary exceeds current and retained earnings due to the
difference between accelerated depreciation allowed for tax purposes, which may
generate significant amounts of distributable cash, and depreciation methods
required to be used in determining book income. Finally, even under
circumstances in which a nonutility subsidiary has sufficient earnings, and
therefore may declare and pay a dividend to its immediate parent, such immediate
parent may have negative retained earnings, even after receipt of the dividend,
due to losses from other operations. In this instance, cash would be trapped at
a subsidiary level where there is no current need for it./26 In all these
circumstances the payment of dividends out of capital or unearned surplus is
appropriate.

               k.   Financing Subsidiaries

     The Emera Group companies (except NSPI) seek authorization to organize new
corporations, trusts, partnerships or other entities that will facilitate
financings by issuing short-term debt, long-term debt, income preferred
securities, equity securities or other securities to third parties and
transferring the proceeds of these financings to Emera or

--------------------
26 The Commission has previously approved the payment of dividends out of
capital or unearned surplus by registered holding companies when the payment
would not impair the subsidiary's ability to meet its obligations and the
subsidiary's assets would be sufficient to meet any anticipated expenses or
liabilities.  See Entergy Corp., Holding Co. Act Release No. 26534 (June 18,
1996); Northeast Utilities, Holding Co. Act Release No. 27529 (May 16, 2002);
Excel Energy, Holding Co. Act Release No. 27597 (November 7, 2002).  Because
the purpose of Rule 46 is to protect utility operating companies, and not
diversified non-utility enterprises, the Commission has extended blanket
authority for non-utility energy companies to pay dividends from unearned
surplus.  Energy East Corp., Holding Co. Act Release No. 27228 (September 12,
2001); Exelon Corp., Holding Co. Act Release No. 27266 (November 2, 2000);
The Southern Co., Holding Co. Act Release No. 26543 (July 17, 1996).  See
also Eastern Utilities Associates, Holding Co. Act Release No. 25330 (July
13, 1991) (finding that the legislative history of Section 12 demonstrates
that it was intended to protect utility operating companies); S. Rep. No.
621, 74th Cong., 1st Sess. 3434 (1935) and Summary Report of the FTC to the
U.S. Senate Pursuant to S.R. No. 83, 70th Cong., 1st Sess. Doc. 92, Vol.
73-A, pp. 61-62.)


                                       24

<PAGE>


such entity's respective parent company./27 To the extent not exempt under Rule
52, the Financing Subsidiaries also request authorization to issue such
securities to third parties. In connection with this method of financing, Emera
and the subsidiaries may: (i) issue debentures or other evidences of unsecured
indebtedness to a Financing Subsidiary in return for the proceeds of the
financing; (ii) acquire voting interests or equity securities issued by the
Financing Subsidiary to establish ownership of the Financing Subsidiary (the
equity portion of the entity generally being created through a capital
contribution or the purchase of equity securities, ranging from one to three
percent of the capitalization of the Financing Subsidiary), and; (iii) guarantee
a Financing Subsidiary's obligations in connection with a financing transaction.
Any amounts issued by a Financing Subsidiary to a third party under this
authorization will be included in the overall external financing limitation
authorized herein for the immediate parent of such Financing Subsidiary.
However, the underlying intra-system mirror debt and parent guarantee shall not
be so included.

     Applicants also request authorization to enter into support or expense
agreements ("Expense Agreement") with Financing Subsidiaries to provide services
to and pay the expenses of any such entity. In cases where it is necessary or
desirable to ensure legal separation for purposes of isolating a Financing
Subsidiary from its parent or another subsidiary for bankruptcy purposes, the
ratings agencies require that any Expense Agreement whereby the parent or
subsidiary provides services related to the financing to the Financing
Subsidiary be at a price, not to exceed a market price, consistent with similar
services for parties with comparable credit quality and terms entered into by
other companies so that a successor service provider could assume the duties of
the parent or subsidiary in the event of the bankruptcy of the parent or
subsidiary without interruption or an increase of fees. Therefore Applicants
seek approval under Section 13(b) of the Act

--------------------
27 Financing Entities would not issue securities that would be convertible into
equity securities of a utility subsidiary.


                                       25

<PAGE>


and rules 87 and 90 to provide the services described in this paragraph at a
charge not to exceed a market price but only for so long as such Expense
Agreement established by the Financing Subsidiary is in place. The authorization
sought herein with respect to Financing Subsidiaries is substantially the same
as that granted in New Century Energies, Inc., Holding Co. Act Release No. 26750
(Aug. 1, 1997); Conectiv, Holding Co. Act Release No. 26833 (Feb. 26, 1998) and
Dominion Resources, Inc., Holding Co. Act Release No. 27112 (Dec. 15, 1999).

     D.   Intermediate Subsidiaries and Nonutility Reorganizations

     The Acquisition Order authorized the applicants to restructure Emera's
nonutility holdings from time to time as may be necessary or appropriate to
further the Emera Group's authorized nonutility activities. Applicants request
the continuation of such authorization. In particular, Emera requests
authorization to acquire, directly or indirectly, the equity securities of one
or more entities ("Intermediate Subsidiaries") which would be organized
exclusively for the purpose of acquiring, holding and/or financing the
securities of one or more existing or future EWGs, FUCOs, Rule 58 Subsidiaries,
ETCs, Canadian Energy Related Subsidiaries or other non-exempt nonutility
subsidiaries (as authorized in this proceeding or in a separate proceeding),
provided that Intermediate Subsidiaries may also engage in administrative
activities ("Administrative Activities") and development activities
("Development Activities"), as such terms are defined below, relating to such
subsidiaries.

     Administrative Activities include ongoing personnel, accounting,
engineering, legal, financial, and other support activities necessary to manage
Emera's investments in nonutility subsidiaries. Development Activities will be
limited to due diligence and design review; market studies; preliminary
engineering; site inspection; preparation of bid proposals, including, in
connection therewith, posting of bid bonds; application for required permits
and/or regulatory approvals; acquisition of site options and options on other
necessary rights; negotiation and execution of contractual commitments with
owners of existing facilities, equipment vendors, construction firms, power
purchasers,


                                       26

<PAGE>


fuel suppliers and other project contractors; negotiation of financing
commitments with lenders and other third-party investors; and such other
preliminary activities as may be required in connection with the purchase,
acquisition, financing or construction of facilities or the acquisition of
securities of or interests in new businesses. Intermediate Subsidiaries also may
provide management, administrative, project development, and operating services
to such entities.

     An Intermediate Subsidiary may be organized, among other things, (1) to
facilitate the making of bids or proposals to develop or acquire an interest in
any EWG, FUCO, Rule 58 Subsidiary, ETC, Canadian Energy Related Subsidiary or
other authorized nonutility business; (2) after the award of such a bid
proposal, to facilitate closing on the purchase or financing of such acquired
company; (3) at any time subsequent to the consummation of an acquisition of an
interest in any such company to, among other things, effect an adjustment in the
respective ownership interests in such business held by Emera and non-affiliated
investors; (4) to facilitate the sale of ownership interests in one or more
acquired nonutility companies; (5) to comply with applicable laws of foreign
jurisdictions limiting or otherwise relating to the ownership of domestic
companies by foreign nationals; (6) as a part of tax planning to limit Emera's
exposure to Canadian, U.S. and foreign taxes; (7) to further insulate Emera and
its utility subsidiaries from operational or other business risks that may be
associated with investments in non-utility companies; or (8) for other lawful
business purposes.

     Investments in Intermediate Subsidiaries may take the form of any
combination of the following: (1) purchases of capital shares, partnership
interests, member interests in limited liability companies, trust certificates
or other forms of equity interests; (2) capital contributions; (3) open account
advances with or without interest; (4) loans; and (5) guarantees issued,
provided or arranged in respect of the securities or other obligations of any
Intermediate Subsidiaries. Funds for any direct or indirect investment in any
Intermediate Subsidiary will be derived from: (1) financings authorized in this
proceeding; (2) any appropriate future debt or equity securities issuance
authorization


                                       27

<PAGE>


obtained by Emera from the Commission; and (3) other available cash resources,
including proceeds of securities sales by nonutility subsidiaries pursuant to
Rule 52.

     Emera requests authorization to consolidate or otherwise reorganize all or
any part of its direct and indirect ownership interests in nonutility
subsidiaries, and the activities and functions related to such investments. To
effect any such consolidation or other reorganization, Emera may wish to merge
or contribute the equity securities of one nonutility subsidiary to another
nonutility subsidiary (including a newly formed Intermediate Subsidiary) or sell
(or cause a nonutility subsidiary to sell) the equity securities or all or part
of the assets of one nonutility subsidiary to another one. To the extent that
these transactions are not otherwise exempt under the Act or rules thereunder,
Emera hereby requests authorization under the Act to consolidate or otherwise
reorganize under one or more direct or indirect Intermediate Subsidiaries
Emera's ownership interests in existing and future nonutility subsidiaries./28
Such transactions may take the form of a nonutility subsidiary selling,
contributing or transferring the equity securities of a subsidiary or all or
part of such subsidiary's assets as a dividend to an Intermediate Subsidiary or
to another nonutility subsidiary, and the acquisition, directly or indirectly,
of the equity securities or assets of such subsidiary, either by purchase or by
receipt of a dividend. The purchasing nonutility subsidiary in any transaction
structured as an intrasystem sale of equity securities or assets may execute and
deliver its promissory note evidencing all or a portion of the consideration
given. Each transaction would be carried out in compliance with all applicable
laws and accounting requirements./29

     The requested authorization would enable the Emera Group to consolidate
similar businesses and to participate effectively in authorized nonutility
activities,

--------------------
28 Applicants will seek such authorization under Section 12(e) of the Act and
the rules thereunder as may be required in connection with the solicitation of
any proxy, power of attorney, consent, or authorization regarding any security
of a subsidiary which terms may be changed under the authorization granted
according to this provision.

29 Applicants would seek authorization under the Act for the sale or transfer of
a nonutility subsidiary held by a FUCO to another company in the Emera Group,
unless the associate company's acquisition of the nonutility subsidiary being
sold or transferred by the FUCO would otherwise be exempt under the Act, under
rule 58, or under an applicable prior Commission order.


                                       28

<PAGE>


without the need to apply for or receive additional Commission approval. Such
restructurings would be undertaken in order to eliminate corporate complexities,
to combine related business segments for staffing and management purposes, to
eliminate administrative costs, to achieve tax savings, or for other ordinary
and necessary business purposes. Any new entity formed under the authority
requested herein may be a corporation, partnership, limited liability company or
other entity in which Emera, directly or indirectly, might have a 100% interest,
a majority equity or debt position, or a minority debt or equity position. These
entities would engage only in businesses to the extent the Emera Group is
authorized, whether by statute, rule, regulation or order, to engage in those
businesses. Emera does not seek authorization to acquire an interest in any
nonassociate company as part of the authority requested in this application and
states that the reorganization will not result in the entry by the Emera Group
into a new, unauthorized line of business./30

     Emera requests authorization to make expenditures on Development and
Administrative Activities, as defined above, in an aggregate amount of up to
$150 million. Emera proposes a "revolving fund" concept for permitted
expenditures on such activities. Thus, to the extent a nonutility subsidiary in
respect of which expenditures for Development or Administrative Activities were
made subsequently becomes an EWG, FUCO or qualifies as an "energy-related
company" under Rule 58, the amount so expended will cease to be considered an
expenditure for Development and

--------------------
30 The Commission has authorized other registered holding companies to carry
out future reorganizations of their non-utility businesses without further
approval.  See Columbia Energy Group, Inc., Holding Co. Act Release No. 27099
(Nov. 5, 1999); Exelon Corporation, Holding Co. Act Release No. 27545 (June
27, 2002); Energy East, Inc., Holding Co. Act Release No. 27228 (Dec. 12,
2000); PowerGen, plc, Holding Co. Act Release No. 27291 (Dec. 6, 2000);
NiSource, Inc., Holding Co. Act Release No. 27265 (Nov. 1, 2000); Entergy
Corp., Holding Co. Act Release No. 27039 (June 22, 1999).


                                       29

<PAGE>


Administrative Activities, but will instead be considered as part of the
"aggregate investment" in such entity pursuant to Rule 53 or 58, as
applicable./31

     E.   Canadian Energy Related Subsidiaries

     The Acquisition Order authorized Emera to invest in various businesses
located in Canada that are energy related and retainable nonutility businesses
under Section 11 of the Act. In particular, the Acquisition Order authorized
Emera to invest up to $300 million to organize or acquire companies engaged in
the nonutility businesses in which Emera was then engaged and in certain other
nonutility energy related businesses specifically described below without
obtaining additional Commission authorization under the Act for each individual
acquisition. Such businesses would derive substantially all their revenues from
Canada or the U.S., or derive revenues from both countries./32 Emera requests a
continuation of this authorization.

     The specific nonutility businesses in which Emera proposes to invest
include, in addition to its current nonutility businesses:

     o    energy management services and other energy conservation related
          businesses,

     o    the maintenance and monitoring of utility equipment,

     o    the provision of utility related or derived software and services,

     o    engineering, consulting and technical services, operations and
          maintenance services,

     o    brokering and marketing electricity and other energy commodities and
          providing services such as fuel management, storage and procurement,

--------------------
31 A revolving fund of permitted expenditures on Development Activities has
been authorized by the Commission in prior cases.  See e.g., Exelon Corp.,
Holding Co. Act Release No. 27545 (June 27, 2002).

32 Emera's investments prior to its registration under the Act in such
nonutility subsidiaries would be excluded from the investment limit.


                                       30

<PAGE>


     o    oil and gas exploration, development, production, gathering,
          transportation, storage, processing and marketing activities, and
          related or incidental activities./33

     F.   EWG and FUCO Investments

     Emera seeks authorization to issue and sell securities for the purpose of
funding investments in EWGs and FUCOs in an aggregate amount not to exceed the
EWG-FUCO Investment Limit. Under Rule 53, in determining whether to approve the
issue or sale of a security by Emera to finance an EWG or FUCO investment, the
Commission must consider the circumstances surrounding the proposed issuance. In
particular, in connection with the financing of the acquisition of an EWG, or
the guarantee of a security of an EWG by Emera, the Commission may not find that
the securities issuance is not reasonably adapted to the earning power of Emera
or to the security structure of Emera or companies in the Emera Group, or that
the circumstances are such that a guarantee by Emera of the security of an EWG
would create an improper risk for Emera, if the conditions of Rule 53(a) are met
and none of the provisions of Rule 53(b) are applicable.

     Emera does not satisfy the conditions of Rule 53(a) because its FUCO
investment exceeds 50% of its consolidated retained earnings. As of December 31,
2003, Emera had consolidated retained earnings of $235.5 million and an
investment of $642.7 million in NSPI. Consequently, the additional authorization
requested and Emera's current investment in EWGs and FUCOs could result in an
aggregate investment of approximately $2.64 billion. Because the conditions of
Rule 53(a) are not satisfied,

--------------------
33 To keep the Commission informed about Emera's investments in such companies,
the Acquisition Order required Emera to provide to the Commission quarterly, in
a certificate under Rule 24, the information required by Form U-9C-3 with regard
to companies acquired under this authorization. Emera commits that it will not
attempt to seek higher rates for customers of BHE or its utility subsidiaries to
compensate for any possible losses or inadequate returns from the activities of
its Canadian nonutility subsidiaries.


                                       31

<PAGE>


Emera must demonstrate that the proposed issuance of securities is consistent
with the standards of Rule 53(c)./34

     The proposed issuance and sale of securities meets the standards of Rule
53(c) and should be authorized. The securities issuance will not have a
substantial adverse impact upon the financial integrity of the registered
holding company system and it will not have an adverse impact on any utility
subsidiary of Emera or on the ability of the MPUC to protect the customers of
such subsidiaries. The general financing commitments proposed in this
Application assure that Emera will remain financially sound, in particular the
30% minimum capitalization standard and the investment grade debt rating
standard assure that any securities issued for purposes of financing an EWG or
FUCO investment would be consistent with an appropriate capital structure. In
addition, BHE has also committed to maintain a minimum 30% equity capitalization
ratio. Further, the MPUC has full authority to monitor BHE and its relationship
with Emera and to take corrective action should it find that the affiliation has
an adverse impact on BHE or its customers.

     To demonstrate that the proposed EWG-FUCO Investment Limit will not have an
adverse impact on the financial integrity of the Emera registered holding
company system and its utility subsidiaries, Emera describes below its
investment review process and discusses various financial indicators that
demonstrate Emera's financial strength.

The Investment Review Process

     Emera practices a disciplined investment review process to assure that it
identifies and minimizes or appropriately mitigates the risks associated with
EWG and

--------------------
34 Emera also does not meet the GAAP books and records requirement in Rule 53(a)
but, as discussed infra, it will comply with the other provisions of Rule 53(a),
in particular, the reporting requirements, and the limitation on the use of
public utility subsidiary employees in the provision of services to EWGs and
FUCOs. In accordance with Rule 53(a)(4), Emera will provide a copy of this
Application to the MPUC.


                                       32

<PAGE>


FUCO activities./35 Before any project investment would be made, the project
would be analyzed in detail, including potential exposure to: (1) operational
risks,/36 (2) construction risks,/37 (3) commercial risks,/38 (4) financial
risks,/39 (5) foreign currency exchange risks,/40 (6) legal and regulatory
risks/41 and (7) country and political risks./42 The review process would be
conducted both at the subsidiary level where the project would be developed and
at the Emera level. All projects must be consistent with Emera's broader
strategic goals and consistent with Emera's skills and expertise. Individual
project plans would be created to evaluate the project "fit" and the potential
hurdles or obstacles to success as well as the opportunities presented. All
projects must be justified on business, technical and economic grounds. In
addition, projects under development are subject to budget review to monitor the
expenditure of development funds./43

        Once past the initial review stages the project will be subject to
additional review by senior Emera management. If the project passes this review,
briefing materials

--------------------
35 Because many projects will also be debt financed, in some cases on a
non-recourse basis, lenders that provide project finance also play a role in
critically appraising the financial soundness of a project and its risk profile.

36 Emera focuses on projects where it is familiar with the technological and
operational issues that may arise. Emera uses its engineers and outside
technical consultants when necessary to evaluate the equipment and the
performance thereof involved in a project.

37 Contracts to build facilities may contain fixed-price terms, performance
milestones, and guarantees backed by liquidated damages provisions to assure
timely and proper construction.

38 The credit quality of partners, suppliers, purchasers and other parties may
be evaluated to assure that they perform under project-related agreements. The
markets in the relevant region are studied to confirm the ability of the project
to perform profitably in that market.

39 Non-recourse financing and appropriate debt levels are selected to match the
project capital structure to the project characteristics. For example, a
merchant generating plant with a long-term off-take contract may have a debt
capitalization in the 70-80% range while a regulated utility acquisition may
have less debt as a proportion of total capitalization. Interest rate
variability may be addressed through long-term borrowings or interest rate
hedges.

40 Borrowings may be made in the same currency as the project revenues to match
the debt service obligation with the income stream. Revenues could also be
indexed to a hard currency to minimize currency risks.

41 Regulatory, permitting, environmental, contracting and other risks are
identified by counsel with appropriate expertise in the relevant project and
jurisdiction.

42 Political risks may be addressed through insurance obtained from the Overseas
Private Investment Corporation, the Multilateral Investment Guaranty Agency or
in the commercial insurance market. The participation of local partners in a
project can also help to mitigate political risks.

43 See e.g., American Electric Power Co., Holding Co. Act Release No. 26864
(April 27, 1998) (discussing a similar project review procedure for EWG and
FUCO investments).


                                       33

<PAGE>


for the Emera board of directors will be prepared outlining the key risks and
opportunities, as well as the strategic rationale for the proposed investment.
The board's review serves as an additional check on the internal evaluation
process.

     Once a project is selected for investment, management sets clear
performance expectations to assure that expenditures for development produce
acceptable results. Measures to mitigate risks to which the project may be
subject are further evaluated and implemented. The risk mitigation exercise
would also include structuring any project financing so that it does not
adversely impact the customers of any public utility companies owned by Emera,
including BHE.

Indicators of Emera's Financial Strength

     In accordance with Rule 53(c) under the Act, to obtain Commission
authorization for EWG and FUCO investments that exceed 50% of the registered
holding company's consolidated retained earnings or otherwise fail to qualify
for safe harbor treatment under Rule 53(a) the registered holding company must
demonstrate that the proposed investments:

      (i) Will not have a substantial adverse impact upon the financial
      integrity of the registered holding company system; and

      (ii) Will not have an adverse impact on any utility subsidiary of the
      registered holding company, or its customers, or on the ability of State
      commissions to protect the subsidiary or its customers.

     The Commission has found compliance with Rule 53(c) in several ways. In The
National Grid Group plc/44 the Commission focused on several indicators of the
overall financial health of the National Grid system and a relied on a
demonstration of the financial soundness of National Grid's principal FUCO
asset. The Commission's analysis in National Grid focused on National Grid's
credit rating, the contribution of the FUCO's operations to National Grid's
overall earnings and the fact that none of the

--------------------
44 The National Grid Group plc, Holding Co. Act Release No. 27154 (March 15,
2000).


                                       34

<PAGE>


conditions in Rule 53(b) existed. In addition, the Commission noted the reduced
risk of the foreign investment to U.S. ratepayers as demonstrated by commitments
by the registered holding company to satisfy the various conditions in its
financing application./45 In particular, those conditions were:

          a.   That the U.S. utility subsidiaries would be insulated from the
               direct effects of EWG and FUCO investments because none of the
               utility subsidiaries would extend its credit or pledge its assets
               to any EWG or FUCO in which National Grid held an interest. In
               addition, National Grid committed not to seek recovery in retail
               rates for any failed investment in, or inadequate returns from,
               an EWG or FUCO investment;

          b.   The credit ratings of National Grid's principal U.S. utility
               subsidiaries were rated investment grade;

          c.   The utility subsidiaries had in place financing facilities that
               adequately supported their operations;

          d.   That National Grid has complied with and will continue to comply
               with Rules 53(a)(3) (regarding the use of utility company
               employees to provide services to EWGs or FUCOs) and 53(a)(4)
               (regarding the submission of certain forms and reports to State
               commissions); and

          e.   That National Grid would provide the information required by Form
               20-F to permit the Commission to monitor the effect of National
               Grid's FUCO investments on National Grid's financial condition.

     Emera's long-term debt is rated investment grade, BBB+, by Standard &
Poor's. Emera's capital structure as of December 31, 2003 also included 39.0%
equity, 7.4% non-controlling interest and 53.6% debt. NSPI has contributed
significantly to Emera's overall earnings. The table below compares the net
income of Emera and NSPI over the last 3 years.

--------------------
45 Id. at 62-64.


                                       35

<PAGE>


                Emera               NSPI         NSPI as % of Emera
              ($CDN mm)           ($CDN mm)

As of    2003   2002   2001   2003  2002   2001   2003    2002  2001
Dec. 31
Net      129.2  83.6  114.2  112.1  86.1   105.1  86.8%  103.0% 92.0%
Income

     The table illustrates NSPI's history of stable earnings and its substantial
role in the financial performance of the Emera Group. Further, none of the
conditions in Rule 53(b) exist. Neither Emera nor any of its subsidiaries with
assets having a book value exceeding an amount equal to 10% or more of Emera's
consolidated retained earnings, has been the subject of a bankruptcy or similar
proceeding. The average consolidated retained earnings for the four most recent
quarterly periods has not decreased by 10% from the average for the previous
four quarterly periods. And lastly, in the previous fiscal year, Emera has not
reported operating losses, exceeding 5% of Emera's consolidated retained
earnings, attributable to its direct or indirect investments in EWGs and FUCOs.

     Furthermore, Emera will abide by certain commitments regarding the
maintenance of financial soundness that would restrict the issuance of
securities for the purpose of financing EWG or FUCO investments in the event
that Emera's financial condition begins to deteriorate. In particular, as
discussed in Item 1.C.2.e above, Emera commits that all rated debt issued by
Emera to unaffiliated parties under the authority requested in this Application
will, when issued, be rated investment grade by at least one nationally
recognized statistical rating organization. Emera also commits that it, on a
consolidated basis, and BHE, individually, will maintain common stock equity as
a percentage of total capitalization of at least 30%. Emera further commits not
to seek recovery in retail rates for any failed investment in, or inadequate
returns from, an EWG or FUCO investment. In addition, neither BHE nor its
subsidiaries will extend their credit or pledge assets to any EWG or FUCO in
which Emera owns an interest.


                                       36

<PAGE>


     Notably, BHE has adequate financial facilities in place and cash resources
available to support its operations. BHE will accrue substantial amounts of cash
in excess of its financing needs for the next several years. MPUC has also
certified that it has adequate authority to protect BHE's ratepayers from any
adverse effects that may be associated with Emera's ownership of BHE.

     With regard to compliance with Rules 53(a)(3) and 53(a)(4), Emera commits
to abide by those provisions. Emera will restrict the number of BHE employees
that it uses in connection with its EWG and FUCO activities. Emera also will
provide a copy of the Form U-1 Application in this matter to the MPUC.

     Lastly, the Commission will be able to monitor the effect of Emera's EWG
and FUCO investments on its overall financial condition through the
comprehensive financial reporting provided to the Commission. Emera will provide
NSPI's financial statements and those of any subsequently acquired EWG or FUCO
to the Commission semiannually.

     The above facts demonstrate that NSPI is a source of financial strength to
the Emera Group and testify to the Emera management's capable guidance of NSPI
over the years. Any future acquired EWG or FUCO would be operated with similar
regard for prudent financial practices.

     The market data provided below demonstrates that the securities markets
share the view that Emera is financially sound.


                                       37

<PAGE>


---------------------------------------------------------------------
                               Emera's Market to Book Value
---------------------------------------------------------------------
At:                     December 31,   December 31,    December 31,
                            2003           2002            2001
---------------------------------------------------------------------
                           $CDN mm        $CDN mm        $CDN mm
---------------------------------------------------------------------
Market value of equity        1,932.4         1,730.2        1,629.7
---------------------------------------------------------------------
Book value of equity          1,312.6         1,332.0        1,181.4
---------------------------------------------------------------------
Ratio of market to               1.47            1.30           1.38
book value (times)
---------------------------------------------------------------------

---------------------------------------------------------------------
                               Emera's Price/Earnings Ratio
---------------------------------------------------------------------
At:                     December 31,   December 31,    December 31,
                            2003           2002            2001
---------------------------------------------------------------------
                            $CDN           $CDN            $CDN
---------------------------------------------------------------------
Basic earnings per               1.20            0.85           1.20
share
---------------------------------------------------------------------
Ratio of price to               14.88           18.88          13.86
earnings
---------------------------------------------------------------------

     Based on all these factors, the Commission should conclude that the
standards of Rule 53(c) are satisfied and should, accordingly, grant the
requested EWG/FUCO investment authorization.

     G.   Reporting

     The Acquisition Order granted applicants an exemption from Rule 26(a)(1)
under the Act, regarding the maintenance of financial statements in conformance
with Regulation S-X. The exemption applied only to Emera and its subsidiaries
that are organized outside the U.S. Any exempted company would maintain its
financial statements in accordance with Canadian GAAP and reconcile such
statements to U.S. GAAP in the same manner as required by Form 20-F when such
statements are provided to the Commission in Emera's filings on Form U5S and in
the Rule 24 certificates proposed below. Emera's Annual Report on Form U5S would
include consolidating financial statements as required by Item 10 of the form.
Applicants request a continued exemption from Rule 26(a)(1).


                                       38

<PAGE>


     Emera proposes to file certificates under Rule 24 on a semi-annual basis
within 60 days of the end of Emera's fiscal year and fiscal second quarter. In
addition, annually upon issuance, Emera will provide the Commission staff with a
copy of its annual report to shareholders and the annual audited consolidated
financial statements of BHE in U.S. GAAP with notes. The Rule 24 certificates
will contain the following information:

     a.   If sales of common stock by Emera are reported, the purchase price per
          share and the market price per share at the date of the agreement of
          sale, and the aggregate amount of common stock issued during the
          Authorization Period;

     b.   The total number of shares of Emera common stock issued or issuable
          pursuant to options granted during the reporting period under employee
          benefit plans and dividend reinvestment plans including any employee
          benefit plans or dividend reinvestment plans hereafter adopted, and
          the total number of shares of Emera common stock issued or issuable
          pursuant to options outstanding during the Authorization Period;

     c.   If Emera common stock has been transferred to a seller of securities
          of a company being acquired, the number of shares so issued, the value
          per share and whether the shares are restricted in the hands of the
          acquirer;

     d.   If a guarantee is issued during the reporting period, the name of the
          guarantor, the name of the beneficiary of the guarantee, the amount,
          terms and purpose of the guarantee, and the total amount of guarantees
          issued and outstanding during the Authorization Period;

     e.   The amount and terms of any financings consummated by any subsidiary
          utility company that are not exempt under Rule 52, and the total
          amount of short-term financings issued and currently outstanding
          during the Authorization Period. In addition, Emera will report to the
          Commission the lender, principal amount, term and interest rate
          applicable to any loans between an associate company and BHE. The
          report will also explain how the interest rate was determined,
          including the benchmarking method used to establish the interest rate
          charged to BHE in connection with the loan;

     f.   If any subsidiaries are Variable Interest Entities ("VIEs") as that
          term is used in FASB Interpretation 46R, Consolidation of Variable
          Interest Entities, Applicants will provide a description of any
          financing transactions conducted during the reporting period that were
          used to fund such VIEs;


                                       39

<PAGE>


     g.   If any financing proceeds are used for VIEs, a description of the
          accounting for such transaction under FASB Interpretation 46R;

     h.   A list of Form U-6B-2 filings with the Commission during the reporting
          period, including the name of the filing entity and the date of
          filing;

     i.   A table showing, as of the end of the reporting period, the dollar and
          percentage components of the capital structure of Emera on a
          consolidated basis, and each public utility subsidiary;

     j.   A retained earnings analysis of Emera on a consolidated basis and for
          each public utility subsidiary detailing gross earnings, goodwill
          amortization, dividends paid out of capital surplus, and the resulting
          capital account balances at the end of the reporting period;

     k.   A list of securities issued by the Intermediate Holding Companies
          during the reporting period, including the principal amount, interest
          rate, term, number of shares and aggregate proceeds, as applicable,
          with the acquiring company identified;

     l.   Emera's aggregate investment, as defined under Rule 53, in EWGs and
          FUCOs as of the end of the reporting period in dollars and as a
          percentage of Emera's consolidated retained earnings, and a
          description of EWG and FUCO investments made during the reporting
          period;

     m.   The information required by Form U-9C-3 with regard to Canadian Energy
          Related Subsidiaries acquired under the authorization requested
          herein;

     n.   For any of BHE's borrowings from NSPI, a listing of at least three
          other sources of funds and their rates and terms; in addition, a cost
          benefit rationale as to why NSPI's funds were a better source of funds
          than other sources.

     Emera will also provide the following supplemental information in its
annual Form U5S filing:

     a.   The amount of any income tax credit and/or income tax liability
          incurred during the previous fiscal year by Emera USH (a) as a result
          of any debt incurred to finance the BHE acquisition ("Merger Debt");
          and (b) as a result of any other income source or expense;

     b.   A description of how the income tax credit and/or income tax liability
          was calculated and allocated to all companies included in the
          consolidated tax


                                       40

<PAGE>


          return, showing all of Emera USH's interest costs and any assumptions
          used in the calculations;

     c.   A description of how any Merger Debt flows through all Intermediate
          Holding Companies (i.e., Emera USH and BHEH);

     d.   A description of the amount and character of any payments made by each
          Intermediate Holding Company to any other Emera system company during
          the reporting period; and

     e.   A statement that the allocation of tax credits and liabilities was
          conducted in accordance with the Tax Allocation Agreement in effect
          and filed as an exhibit to the Form U5S.

Item 2.  Fees, Commissions And Expenses.

     The fees, commissions and expenses to be paid or incurred by Emera directly
or indirectly in connection with the preparation of this application are
estimated to be approximately $25,000. Fees, commissions and expenses paid in
connection with the transactions for which authorization is requested herein
will be consistent with the terms set forth in the Financing Limitations.

Item 3.  Applicable Statutory Provisions.

     A.   Applicable Provisions

     The proposed financing transactions are subject to Sections 6, 7, 9, 10,
12(b), 12(c), 13(b), 32 and 33 of the Act and Rules 43, 45, 46, 53, 54, 87 and
90 thereunder are considered applicable to the proposed transactions.

     B.   Legal Analysis

     The financing authorizations requested in the Application are substantially
similar to financing authorizations granted to other registered holding company
systems. See National Grid Group plc, Holding Co. Act Release No. 27154 (March
15, 2000); NiSource, Inc., Holding Co. Act Release No. 27265 (November 1, 2000);
Exelon Corp., Holding Co. Act Release No. 27266 (November 2, 2000). Emera
proposes to abide by the same basic parameters applied to the financing
authorizations previously authorized


                                       41

<PAGE>


by the Commission, in particular, the minimum 30% common equity standard and the
investment grade credit standard. For these reasons, the Commission should find
the proposed financing transactions to be in accordance with the Act and
generally in the interest of investors, consumers and the public interest.

Item 4.  Regulatory Approvals.

     No state commission and no federal commission, other than the Commission,
has jurisdiction over the proposed transactions.

Item 5.  Procedure.

     The Commission is respectfully requested to issue and publish not later
than May 21, 2004 the requisite notice under Rule 23 with respect to the filing
of this Application, such notice to specify a date not later than June 14, 2004
by which comments may be entered. The Commission is requested to issue its order
granting and permitting this Application to become effective not later than June
18, 2004.

     A recommended decision by a hearing or other responsible officer of the
Commission is not needed for approval of the proposed financing transactions.
The Division of Investment Management may assist in the preparation of the
Commission's decision. There should be no waiting period between the issuance of
the Commission's order and the date on which it is to become effective.

Item 6.  Exhibits And Financial Statements.

Exhibits

A    Applicant subsidiary companies of Emera and BHE (previously filed).

F    Opinion of counsel of Emera (previously filed).

G    Past tense opinion of counsel (to be filed by amendment).

H    Proposed form of notice (previously filed).


                                       42

<PAGE>


Financial Statements
--------------------

FS-1  Financial projections for Emera and BHE for the Authorization Period
      (confidential treatment requested).

FS-2  Balance sheet and income statement of Emera consolidated for the year
      ended December 31, 2003 (incorporated by reference to Exhibit A of Emera's
      certificate under Rule 24, filed on Form 35-Cert, SEC File No. 70-9787
      (Feb. 27, 2004)).

FS-3  Balance sheet and income statement of BHE consolidated for the year ended
      December 31, 2003 (incorporated by reference to Exhibit B of Emera's
      certificate under Rule 24, filed on Form 35-Cert, SEC File No. 70-9787
      (Feb. 27, 2004)).

Item 7.  Information As To Environmental Effects.

     The proposed transactions neither involve a "major federal action" nor
"significantly affects the quality of the human environment" as those terms are
used in Section 102(2)(C) of the National Environmental Policy Act, 42 U.S.C.
Sec. 4321 et seq. No federal agency is preparing an environmental impact
statement with respect to this matter.


                                       43

<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this Application to be signed on
its behalf by the undersigned thereunto duly authorized. The signature of the
applicants, through the undersigned, is restricted to the information contained
in this Application which is pertinent to the instant Application.

---------------------------------------------------------------------------
Date:  June 29, 2004                  Emera Incorporated


                                      By: /s/ Richard J. Smith
                                          --------------------
                                      Name:  Richard J. Smith
                                      Title:  Corporate Secretary and
                                      General Counsel
---------------------------------------------------------------------------
Date:  June 29, 2004                  Emera US Holdings Inc.
                                      BHE Holdings Inc.
                                      By: /s/ Michael Burnell
                                          -------------------
                                      Name:  A. Michael Burnell
                                      Title:   Director, President and
                                      Secretary
---------------------------------------------------------------------------
Date:  June 29, 2004                  Bangor Hydro-Electric Company
                                      Bangor Var Co. Inc.
                                      Bangor Energy Resale Inc.
                                      CareTaker, Inc.
                                      Bangor Fiber Co. Inc.
                                      Bangor Line Co.
                                      The Pleasant River Gulf Improvement
                                      Co.
                                      The Sebois Dam Co.
                                      East Branch Improvement Co.
                                      Godfrey's Falls Dam Co.
                                      The Sawtelle Brook & Dam
                                      Improvement Co.

                                      By: /s/ Richard J. Smith
                                          --------------------
                                      Name:  Richard J. Smith
                                      Title:  Corporate Secretary
---------------------------------------------------------------------------


                                       44

<PAGE>


---------------------------------------------------------------------------
Date:  June 29, 2004                  NS Power Services Ltd.
                                      NSP Trigen Inc.
                                      Emera Fuels Inc.
                                      Strait Energy Inc.
                                      Emera Utility Services Inc.
                                      Cablecom Ltd.
                                      Fibretek Inc.
                                      Utilismart Corp.
                                      NSP Pipeline Management Ltd.
                                      NSP Pipeline Inc.
                                      NSP US Holdings Inc.
                                      NSP Investments Inc.
                                      Scotia Holdings Inc.
                                      Nova Power Holdings Inc.
                                      Scotia Power U.S. Ltd.
                                      1447585 Ontario Ltd.
                                      Ontario 8 Group Financing LLC
                                      Emera Energy Inc.
                                      Emera Energy U.S. Subsidiary No. 1, Inc.
                                      Emera Energy U.S. Subsidiary No. 2, Inc.
                                      Emera Energy Services Inc.
                                      3065381 Nova Scotia Company
                                      3065383 Nova Scotia Company
                                      3065384 Nova Scotia Company
                                      3065385 Nova Scotia Company
                                      Emera Investments LLC


                                      By: /s/ Richard J. Smith
                                          --------------------
                                      Name:  Richard J. Smith
                                      Title:  Corporate Secretary and
                                      General Counsel
---------------------------------------------------------------------------



                                       45

</TEXT>
</DOCUMENT>
