As filed with the Securities and Exchange Commission on ~~May~~November 89, 2001 SECURITIES AND EXCHANGE COMMISSION ~~WASHINGTON~~ Washington, D.C. 20549

FORM 8 - K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report - ~~May~~November 7, 2001

Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification No.

0-25595                                                 Niagara Mohawk Holdings, Inc.                               16-1549726
                                                               (a New York corporation)
                                                               300 Erie Boulevard West
                                                               Syracuse, New York 13202
                                                               315.474.1511

1-2987                                                   Niagara Mohawk Power Corporation                   15-0265555
                                                               (a New York corporation)
                                                               300 Erie Boulevard West
                                                               Syracuse, New York 13202
                                                               315.474.1511

Item 52. Other Events (a) OnDisposition Mayof 7,Nuclear 2001, Niagara Mohawk Holdings, Inc. issued a press release relating to its first quarter earnings for 2001. See attached Exhibit No. 99. Assets

~~Item~~On November 7. , 2001, ~~Financial~~Niagara ~~Statements~~Mohawk ~~and~~Power ~~Exhibits~~ Corporation (c“Niagara Mohawk”) sold its Nine Mile ~~Exhibits – Following~~Point isUnit ~~the~~1 ~~list~~(“Unit of1”) ~~exhibits~~and ~~furnished~~41 inpercent ~~accordance~~share ~~with~~of ~~the~~its Nine Mile Point ~~provisions~~Unit of2 ~~Item~~(“Unit ~~601~~2”) ofnuclear ~~Regulation~~plants ~~S-K~~pursuant to an agreement dated December 2000 to Constellation Energy Group, Inc. (“Constellation ~~filed~~Energy”). asSee ~~part~~Niagara ofMohawk ~~this~~Holdings, ~~current~~Inc. ~~report~~(“Holdings”) onand Niagara Mohawk’s combined Form 810-K. for ~~Exhibit~~fiscal Noyear ended December 31, 2000, Part II, Item 8. ~~99 – Press~~Financial ~~release~~Statements ofand Supplementary Data - Note 3 and Holdings and Niagara Mohawk’s ~~Holdings,~~combined ~~Inc.~~Form 10-Q ~~issued~~for onthe ~~May~~quarter 7ended June 30, 2001, ~~relating~~Part toI, ~~its~~Item ~~first~~1. ~~quarter~~Financial Statements Note 3 for a complete discussion regarding this announced sale of Niagara Mohawk’s nuclear generation assets and its regulatory treatment. The ~~earnings~~agreement with Constellation Energy was filed as exhibits 10-42a and 10-42b in Holdings and Niagara Mohawk’s combined Form 10-K for ~~2001~~fiscal year ended December 31, 2000.

~~NIAGARA~~ Niagara ~~MOHAWK~~Mohawk ~~HOLDINGS~~received cash proceeds of approximately $271 million and note receivable of $249.8 million on November 7, ~~INC~~2001.Niagara ~~AND~~Mohawk ~~SUBSIDIARY~~is ~~COMPANIES~~obligated ~~SIGNATURE~~to use 85 percent of the net proceeds of the sales of the generation assets to reduce its senior debt outstanding within 180 days after the receipt of such proceeds pursuant to the covenants of the Senior Notes issued in 1998. Such Senior Notes were issued to fund the Master Restructuring Agreement. Along with the asset purchase agreements, Niagara Mohawk also signed power purchase agreements (“PPAs”) with Constellation to purchase energy at negotiated competitive prices for approximately ten years.

NIAGARAItem MOHAWK HOLDINGS, INC5. (Registrant) Date: May 7,Other 2001 By: /s/ Steven W. Tasker Steven W. Tasker Vice President–Controller and Principal Accounting Officer, in his respective capacities as such Events

~~NIAGARA MOHAWK POWER CORPORATION~~ (~~Registrant~~a) ~~Date: May~~On November 7, 2001 ~~By: /s/ Steven~~, W.Niagara ~~Tasker Steven~~Mohawk W.issued ~~Tasker Vice~~a ~~President–Controller~~press ~~and Principal~~release ~~Accounting~~relating ~~Officer, in~~to ~~his~~the ~~respective~~sale ~~capacities~~of asits ~~such~~nuclear generation assets. See Attached Exhibit No. 99.

EXHIBITItem INDEX7. Financial Statements

~~Following~~(b) Unaudited isPro ~~the~~Forma ~~index~~Financial ~~of Exhibits furnished in accordance with the provisions of Item 601 of Regulation S-K, filed as part of this~~Information ~~current report on Form 8-K. Exhibit No. 99 - Press release of Niagara Mohawk Holdings, Inc. issued on May 7, 2001 relating to its first quarter earnings for 2001.~~

~~EXHIBIT~~The NOfollowing unaudited Pro Forma Consolidated Financial Information illustrates the effects of the sale of the nuclear assets discussed in Item 2 on Holdings and Niagara Mohawk’s results of operations and financial position. 99The Pro Forma Consolidated Statements of Income for the Year Ended December 31, 2000, and for the Six Months Ended June 30, 2001, were prepared as if the sale occurred on January 1, 2000, but exclude nonrecurring items relating to the sale. Such nonrecurring items include the non-cash write-off of $123 million of stranded costs in accordance with the October 26, 2001 New York State Public Service Commission (“PSC”) Order approving such sale and the income that would be recognized from the unamortized investment tax credits (“ITCs”) of $79.7 million associated with the nuclear assets. The Pro Forma Consolidated Balance Sheet at June 30, 2001, was prepared as if the sale occurred on June 30, 2001. None of the Unaudited Pro Forma Consolidated Financial Information includes any returns that Niagara Mohawk might have earned on the cash sales proceeds.

~~NIAGARA~~The ~~MOHAWK~~unaudited ~~HOLDINGS~~Pro ~~REPORTS~~Forma ~~FIRST~~Consolidated ~~QUARTER~~Financial ~~2001~~Information ~~EARNINGS~~is presented for illustrative purposes only and does not purport to represent what Holdings and Niagara Mohawk’s results of operations or financial position would have been if the nuclear asset sale had occurred at the beginning of the periods or on the date indicated, or project Holdings and Niagara Mohawk’s results of operations or financial position for any future period or date. The pro forma disposition adjustments are based upon available information that Niagara Mohawk believes is reasonable under the circumstances.

~~SYRACUSE~~The following unaudited Pro Forma Consolidated Financial Information, ~~May~~therefore, 7is -dependent on the assumptions described in the footnotes and should be read in conjunction with Holdings and Niagara Mohawk’s ~~Holdings~~audited consolidated financial statements for the year ended December 31, ~~Inc.~~2000, ~~(NYSE:~~including ~~NMK)~~footnotes, ~~parent~~as ~~company~~contained ofin Holdings and Niagara Mohawk’s ~~Power~~2000 ~~Corp.~~ Annual Report on Form 10-K, and (b) Holdings and Niagara Mohawk),’s aunaudited ~~regulated~~consolidated ~~energy~~financial ~~delivery~~statements ~~company~~for the six months ended June 30, ~~today~~2001, ~~reported~~including ~~earnings~~footnotes, ~~for~~as ~~the~~contained ~~first~~in ~~quarter~~Holdings ofand Niagara Mohawk’s 2001 second quarter report on Form 10-Q.

~~Earnings~~ (c) Exhibits ~~before~~- ~~interest,~~Following ~~taxes,~~is ~~depreciation~~the ~~and~~list ~~amortization~~of ~~(EBITDA)~~Exhibits ~~for the~~furnished ~~twelve~~in ~~months~~accordance with ~~ended~~the ~~March~~provisions ~~31,~~of ~~2001~~Item ~~were~~601 ~~$1.10~~of ~~billion~~Regulation S-K, ~~compared~~filed toas apart ~~level~~ of ~~$1.13~~this ~~billion~~current ~~for~~report ~~the~~on ~~year ended~~Form ~~December 31, 2000~~8-K.

~~The~~Exhibit company reported earnings of $40.9 million, or 26 cents per share, which includes $12.8 million, or 8 cents per share for the cumulative effect of adopting Statement of Financial Accounting Standards (SFAS) No. ~~133~~99 - ~~“Accounting~~Press ~~for~~release ~~Derivative~~of ~~Instruments~~Niagara ~~and~~Mohawk ~~Hedging~~issued ~~Activities.”~~on ~~This compares~~November ~~to earnings of $14.5 million~~7, or2001 8relating ~~cents~~to ~~per share in~~ the ~~first~~sale ~~quarter~~ of ~~2000.~~its ~~Reported~~nuclear ~~earnings have~~generation ~~been and will continue to be substantially depressed due to the non-cash charges related to the Master Restructuring Agreement~~assets.

EarningsNIAGARA forMOHAWK the first quarter of 2001 were also positively impacted by $12.8 millionHOLDINGS, or 8 cents per share for lower income taxes caused by a change in the intra-period tax allocation methodology for recognizing the flow-through of certain tax benefits and liabilities; by $11INC.0 million,AND orSUBSIDIARY 7COMPANIES centsUNAUDITED per sharePRO dueFORMA toCONSOLIDATED aSTATEMENTS creditOF related to New York State’s “Power For Jobs” economic development program; by $5.5 million, or 3 cents per share due to lower interest costs; and by $4.4 million, or 3 cents per share for an incentive related to the sale of the Roseton Station. INCOME

E                                                       For the year ended December 31, 2000
arnings                                                                     Pro forForma
                                                     As theReported    Adjustments    Pro firstForma
                                                     ------------   -----------   -----------
                                                                (in quarterthousands of 2001dollars)
Operating wererevenues:
   Electric reduced(Note by 1)                                  $15.83,799,926    $   (5,371)   $3,794,555
   Gas                                                   733,197                     733,197
   Other                                                   6,149                       6,149
                                                     ------------   -----------   -----------
                                                       4,539,272        (5,371)    4,533,901
                                                     ------------   -----------   -----------
Operating millionexpenses:
   Electricity purchased (Note 1)                      1,714,946       306,519     2,021,465
   Fuel orfor 10electric centsgeneration per(Note share1)                  74,340       (38,986)       35,354
   Gas aspurchased                                         434,044                     434,044
   Other aoperation and maintenance (Note 2)              913,710      (142,455)      771,255
result   Amortization/accretion of NiagaraMRA/IPP Mohawk’sbuyout exposurecosts        375,487                     375,487
   Amortization toof higherloss naturalon gassale pricesof inassets its(Note purchased3)             -       100,000       100,000
   Depreciation powerand portfolio;amortization (Note 4)                312,337      (114,617)      197,720
by   Other $taxes (Note 5)                                  284,558       (27,446)      257,112
                                                     ------------   -----------   -----------
                                                       4.2,109,422        83,015     4,192,437
                                                     ------------   -----------   -----------
Operating millionincome                                         429,850       (88,386)      341,464
Other orincome 3(deductions) cents(Note per6)                       (13,542)       21,058         7,516
                                                     ------------   -----------   -----------
Income sharebefore forinterest acharges                           416,308       (67,328)      348,980
Interest highercharges bad(Note 7)                                437,274        (7,769)      429,505
Preferred dividend requirement of subsidiary              31,437                      31,437
                                                     ------------   -----------   -----------
Loss before income taxes                                 (52,403)      (59,559)     (111,962)
Income taxes (Note 8)                                     (6,769)      (17,370)      (24,139)
                                                     ------------   -----------   -----------
Loss  before extraordinary item                          (45,634)      (42,189)      (87,823)
Extraordinary item - loss from the extinguishment
   of debt, reservenet reflectingof higherincome gastaxes pricesof to$489                     (909)                       (909)
customers;                                                     ------------   -----------   -----------
Net andloss                                                 (46,543)      (42,189)      (88,732)
                                                                    ===========
Retained byearnings at beginnning of year                  610,952                     610,952
                                                     ------------                 -----------
Retained earnings at end of year                      $3.3  564,409                  $  522,220
                                                     ============                 ===========
Average millionnumber of shares of common stock
   outstanding (in thousands)                            167,383       167,383       167,383
Basic orand 2diluted centsloss per average share relatedof
   common tostock thebefore thirdextraordinary phaseitem             $    (0.27)   $    (0.25)   $    (0.52)
Extraordinary ofitem electricityper priceaverage reductionsshare of common
under   stock                                                   (0.01)                      (0.01)
                                                     ------------   -----------   -----------
Basic theand company’sdiluted regulatoryloss restructuringper agreementaverage share of
   common stock                                       $    (0.28)   $    (0.25)   $    (0.53)
                                                     ============   ===========   ===========

SignificantlyNIAGARA higherMOHAWK natural gas prices impacted Niagara Mohawk’s fuel and purchased power costsHOLDINGS, principally because restructured contracts with Independent Power Producers began indexing to natural gas prices in July 2000INC. FuelAND andSUBSIDIARY purchasedCOMPANIES powerUNAUDITED costsPRO wereFORMA alsoCONSOLIDATED higherSTATEMENTS becauseOF of an indexed contract with an IPP not part of the MRA. Niagara Mohawk has taken steps to hedge against further volatility in natural gas prices, largely by purchasing NYMEX gas futures contracts through August 2001, which marks the end of the fixed price period in Niagara Mohawk’s multi-year regulatory agreement. INCOME

                                                   For the six months ended June 30, 2001
The                                                                 Pro companyForma
                                                   As reportedReported  Adjustments    Pro aForma
                                                   -----------  -----------   -----------
                                                         (in lossthousands of dollars)
Operating revenues:
 Electric (Note 1)                                 $20.1,881,471   $  (1,975)    $1,879,496
 millionGas                                                  575,231                    575,231
 orOther                                                    312                        312
                                                   -----------  ----------    -----------
                                                    2,457,014      (1,975)     2,455,039
                                                   -----------  ----------    -----------
Operating aexpenses:
 lossElectricity ofpurchased 12(Note cents1)                       851,915     128,668        980,583
 perFuel share for theelectric twelvegeneration months(Note ended1)                 21,699     (16,523)         5,176
March 31,Gas 2001purchased                                        391,627                    391,627
 comparedOther tooperation aand lossmaintenance (Note 2)             516,538     (72,170)       444,368
 Amortization/accretion of $71.4MRA/IPP millionbuyout costs       182,145                    182,145
 orAmortization aof loss on sale of 39assets cents(Note per3)            -      50,000         50,000
 shareDepreciation forand theamortization twelve(Note months4)               157,104     (58,584)        98,520
ended MarchOther 31,taxes 2000.(Note The5)                                 115,808     (13,451)       102,357
                                                   -----------  ----------    -----------
                                                    2,236,836      17,940      2,254,776
                                                   -----------  ----------    -----------
Operating lossincome                                      220,178     (19,915)       200,263
Other forincome the(deductions) twelve(Note months6)                    (44,468)      7,584        (36,884)
                                                   -----------  ----------    -----------
Income endedbefore Marchinterest 31charges                        175,710     (12,331)       163,379
Interest 2001charges included(Note $12.7)                             202,487      (8,132)       194,355
Preferred milliondividend requirement of subsidiary           15,515                     15,515
                                                   -----------  ----------    -----------
Income orbefore 8income centstaxes                            (42,292)     (4,199)       (46,491)
perIncome sharetaxes for(Note the8)                                   9,619        (388)         9,231
                                                   -----------  ----------    -----------
Loss before cumulative effect of                      (51,911)     (3,811)       (55,722)
 adoptinga SFASchange No.in 133.accounting Theprinciple
Cumulative twelve-montheffect periodof endeda Marchchange 31in accounting
 principle, 2000net of income tax                          12,790                     12,790
includes                                                   -----------  ----------    -----------
Net anloss                                           $  (39,121)  $  (3,811)    $  (42,932)
                                                                ==========
Retained extraordinaryearnings itemat relatedbeginning toof theyear                564,409                    564,409
                                                   -----------                -----------
Retained costearnings at end of theyear                   $  525,288                 $  521,477
                                                   ===========                ===========
Average earlynumber retirementof shares of debtcommon stock
 outstanding (in thousands)                           160,240     160,240        160,240
Basic and diluted loss per average share of
 common stock before cumulative effect of
 change in accounting principle                    $23    (0.832)  $   (0.03)    $    (0.35)
Cumulative millioneffect of a change in accounting
 principle, net of tax                                   0.08                       0.08
or                                                   -----------  ----------    ------------
Basic 13and centsdiluted loss per average share of
 common stock                                      $    (0.24)  $   (0.03)    $    (0.27)
                                                   ===========  ==========    ===========

ResultsNIAGARA forMOHAWK the twelve months ended March 31HOLDINGS, 2001 were increased by $24INC.3 million,AND orSUBSIDIARY 15COMPANIES centsUNAUDITED per sharePRO dueFORMA toCONSOLIDATED lowerBALANCE interest expense; by $21.2 million, or 13 cents per share for higher gas margin during the twelve months ended March 31, 2001; by $19.4 million, or 12 cents per share for insurance proceeds and disaster relief associated with the 1998 ice storm restoration effort; $12.8 million, or 8 cents per share for lower income taxes caused by a change in the intra-period tax allocation methodology for recognizing the flow-through of certain tax benefits and liabilities; and by $11.0 million, or 7 cents per share due to a credit related to New York State’s “Power For Jobs” economic development program. SHEETS


Results                                                                June for30, the2001
                                                                         Pro twelveForma
                                                          As monthsReported    Adjustments      Pro endedForma
                                                         ------------   -------------   ------------
                                                                   (in Marchthousands 31,of 2001dollars)
ASSETS
Utility wereplant:
 negativelyElectric impactedplant by(Note 9)                                 $63. 7,201,994    $(2,400,976)    $ 4,801,018
 millionNuclear fuel (Note 9)                                       674,721       (674,721)              -
 orGas 39plant                                                 1,326,578                      1,326,578
cents perCommon shareplant as(Note a9)                                       359,604                        359,604
 resultConstruction ofwork Niagarain Mohawk’sprogress exposure(Note to9)                      245,093        (25,860)        219,233
                                                         ------------   ------------    ------------
  Total higherutility naturalplant                                      9,807,990     (3,101,557)      6,706,433
gas pricesLess-Accumulated indepreciation itsand purchasedamortization power(Note portfolio;9)   4,111,520     (1,966,331)      2,145,189
                                                         ------------   ------------    ------------
  Net utility plant                                        5,696,470     (1,135,226)      4,561,244
                                                         ------------   ------------    ------------
Other property and byinvestments $11.4(Note million10)                     533,300       (349,530)        183,770
                                                         ------------   ------------    ------------
Current orassets:
 7Cash, centsincluding temporary cash investments (Note 11)        169,171         38,397         207,568
per shareFunds asrestricted afor consequencethe repayment of thedebt second(Note 11)                       217,582         217,582
 Accounts receivable (less allowance for doubtful
   accounts)                                                 307,285                        307,285
 Notes receivable - Constellation Energy (Note 12)                 -         49,956          49,956
 Materials and thirdsupplies, phasesat ofaverage electricitycost:
   Gas storage                                                44,240                         44,240
   Other (Note 13)                                            90,162        (71,535)         18,627
 Assets from price risk management activities                 21,330                         21,330
reductions providedPrepaid intaxes                                                43,811                         43,811
 NiagaraOther                                                        20,836                         20,836
                                                         ------------   ------------    ------------
                                                             696,835        234,400         931,235
                                                         ------------   ------------    ------------
Regulatory Mohawk’sassets:
 MRA regulatory asset                                      3,151,007                      3,151,007
 Swap contracts regulatory asset                             611,646                        611,646
 Regulatory tax asset (Note 14)                              409,636       (269,511)        140,125
 IPP restructuring agreement.costs                                     215,669                        215,669
 Deferred environmental restoration costs                    285,000                        285,000
 Deferred loss on sale of assets (Note 15)                   122,804      1,171,356       1,294,160
 Postretirement benefits other than pensions                  43,164                         43,164
 Unamortized debt expense                                     37,787                         37,787
 Other (Note 16)                                             168,921        (45,249)        123,672
                                                         ------------   ------------    ------------
                                                           5,045,634        856,596       5,902,230
                                                         ------------   ------------    ------------
Other assets (Note 12)                                        91,622        199,822         291,444
                                                         ------------   ------------    ------------
                                                         $12,063,861    $  (193,938)    $11,869,923
                                                         ============   ============    ============

NiagaraNIAGARA Mohawk’sMOHAWK electric revenues for the first quarter of 2001 were $823.6 millionHOLDINGS, down slightly from the same period in 2000INC. ElectricAND revenuesSUBSIDIARY forCOMPANIES theUNAUDITED twelvePRO months endedFORMA MarchCONSOLIDATED 31,BALANCE 2001 were $3.2 billion, unchanged compared to the same period a year ago. SHEETS

                                                                June 30, 2001
Retail                                                                          Pro salesForma
                                                            As Reported   Adjustments   Pro Forma
                                                           ------------   -----------  ------------
                                                                  (in thousands of electricitydollars)
CAPITALIZATION forAND theLIABILITIES
Capitalization:
 threeCommon monthsstockholders' andequity
  Common twelvestock, monthsissued ended187,364,863 Marchshares; 31outstanding     $     1,874    $            $     1,874
   160,239,818 2001shares
 decreasedTreasury 0.8stock, at cost - 27,125,045 shares                  (407,193)                   (407,193)
percent Capital stock premium and 8.6expense                           2,548,576                   2,548,576
 percentAccumulated other comprehensive income                        (45,734)                    (45,734)
 respectivelyRetained earnings (Note 17)                                   525,288          (239)      525,049
                                                           ------------   -----------  -----------
                                                             2,622,811          (239)    2,622,572
 comparedNon-redeemable topreferred thestock                                440,000                     440,000
 sameMandatorily periodsredeemable inpreferred 2000stock                         51,950                      51,950
 primarilyLong-term reflectingdebt                                              4,735,477                   4,735,477
                                                           ------------   -----------  ------------
   Total thatcapitalization                                      7,850,238          (239)    7,849,999
more                                                           ------------   -----------  ------------
Current customersliabilities:
 choseShort-term todebt                                                 5,000                       5,000
 buyLong-term electricitydebt fromdue otherwithin energyone serviceyear                            418,121                     418,121
 providers.Sinking Totalfund deliveriesrequirements ofon electricityredeemable preferred stock         7,620                       7,620
which includeAccounts deliveriespayable                                              278,678                     278,678
 toPayable customerson whooutstanding chosebank tochecks                             18,624                      18,624
 buyCustomers' electricitydeposits                                            20,393                      20,393
 fromAccrued othertaxes energy(Note service14)                                        56,455         6,833        63,288
 providersAccrued interest                                               92,256                      92,256
were upAccrued 1.1vacation percentpay for(Note the18)                                 35,206        (6,150)       29,056
 firstLiabilities quarterfrom ofprice 2001risk management activities              33,296                      33,296
 Other                                                         157,643                     157,643
                                                           ------------   -----------  ------------
                                                             1,123,292           683     1,123,975
                                                           ------------   -----------  ------------
Regulatory and downother 0.9liabilities:
 percentAccumulated deferred income taxes  (Notes 14 and 17)        1,483,732      (204,727)    1,279,005
 Liability for theswap twelvecontracts                                  757,059                     757,059
 monthsEmployee endedpension Marchand 31other benefits (Note 19)                 214,895        26,900       241,795
 2001Other (Note 16)                                               349,645       (16,555)      333,090
compared                                                           ------------   -----------  ------------
                                                             2,805,331      (194,382)    2,610,949
                                                           ------------   -----------  ------------
Commitments toand thecontingencies:
 sameLiability periodsfor inenvironmental 2000.restoration                       285,000                     285,000
                                                           ------------   -----------  ------------
                                                           $12,063,861    $ (193,938)  $11,869,923
                                                           ============   ===========  ============

NiagaraNIAGARA Mohawk’sMOHAWK naturalPOWER gasCORPORATION revenuesAND forSUBSIDIARY theCOMPANIES firstUNAUDITED quarterPRO ofFORMA 2001CONSOLIDATED wereSTATEMENTS $356.1OF million, up 44.9 percent from the same period in 2000. For the twelve months ended March 31, 2001, natural gas revenues were $768.8 million, up 32.7 percent, compared to the same period in 2000. Revenues in both periods were up primarily because of the higher market price of natural gas. Niagara Mohawk does not profit from the higher market price of natural gas. The company passes the cost of the commodity directly on to customers without markup. INCOME


Retail                                                       For salesthe ofyear naturalended gasDecember for31, the2000
                                                                  Pro threeForma
                                                    As monthsReported   Adjustments    Pro andForma
                                                    -----------   -----------   -----------
                                                            (in twelvethousands monthsof endeddollars)
Operating Marchrevenues:
 31Electric (Note 1)                                  $3,239,253    $  (5,371)    $3,233,882
 2001Gas                                                   658,502                     658,502
                                                    -----------   ----------    -----------
                                                     3,897,755       (5,371)     3,892,384
                                                    -----------   ----------    -----------
Operating decreasedexpenses:
 0.7Electricity purchased (Note 1)                      1,175,923      306,519      1,482,442
percent andFuel increasedfor 7.0electric percentgeneration (Note 1)                  74,340      (38,986)        35,354
 respectivelyGas purchased                                         357,524                     357,524
 comparedOther tooperation theand samemaintenance periods(Note in2)              888,067     (142,455)       745,612
 2000.Amortization/accretion Theof increaseMRA/IPP inbuyout thecosts        375,487                     375,487
twelve Amortization of loss on sale of assets (Note 3)             -month      100,000        100,000
 periodDepreciation wasand primarilyamortization due(Note to4)                311,803     (114,617)       197,186
 colderOther weather.taxes Total(Note gas5)                                  283,511      (27,446)       256,065
                                                    -----------   ----------    -----------
                                                     3,466,655       83,015      3,549,670
                                                    -----------   ----------    -----------
Operating deliveriesincome                                       431,100      (88,386)       342,714
Other whichincome includes(deductions) the(Note transportation6)                     (24,755)      21,058         (3,697)
                                                    -----------   ----------    -----------
Income ofbefore interest charges                         406,345      (67,328)       339,017
customerInterest charges (Note 7)                              437,274       (7,769)       429,505
                                                    -owned----------   ----------    -----------
Loss gasbefore income taxes                               (30,929)     (59,559)       (90,488)
Income weretaxes down(Note 3.8)                                   (9,526)     (17,370)       (26,896)
                                                    -----------   ----------    -----------
Loss  before percentextraordinary foritem                        (21,403)     (42,189)       (63,592)
Extraordinary theitem first- quarterloss from the extinguishment
 of 2001debt, andnet upof 3.0income percenttaxes forof the$489                     (909)                       (909)
                                                     ----------   ----------    -----------
Net twelve monthsloss                                               (22,312)     (42,189)       (64,501)
endedDividends Marchon preferred stock                            31,437                      31,437
                                                    -----------   ----------    -----------
Balance 2001.available for common stock                  $  (53,749)   $ (42,189)    $  (95,938)
                                                    ===========   ==========    ===========

ConsolidatedNIAGARA StatementsMOHAWK ofPOWER IncomeCORPORATION willAND beSUBSIDIARY filedCOMPANIES withUNAUDITED thePRO SecuritiesFORMA andCONSOLIDATED ExchangeSTATEMENTS CommissionOF on Form 8-K. INCOME


The                                                    For companythe willsix hostmonths anended earningsJune conference30, call2001
                                                                   Pro todayForma
                                                   As atReported    Adjustments     Pro 10Forma
                                                   -----------    -----------    -----------
                                                          (in thousands of dollars)
Operating revenues:00
 a.m.Electric EDT(Note to1)                                 $1,604,741     $  (1,975)     $1,602,766
 discussGas                                                  521,116                       521,116
                                                   -----------    ----------     -----------
                                                    2,125,857        (1,975)      2,123,882
                                                   -----------    ----------     -----------
 firstElectricity quarterpurchased (Note 1)                       574,548       128,668         703,216
earnings. InFuel orderfor toelectric joingeneration the(Note conference1)                 21,699       (16,523)          5,176
 callGas purchased                                        341,486                       341,486
 domesticOther callersoperation mayand dialmaintenance 877-692-2587;(Note international2)             502,171       (72,170)        430,001
callers mayAmortization/accretion dialof 973-633-1010MRA/IPP afterbuyout 9:50costs       182,145                       182,145
 a.m.Amortization Forof thoseloss unableon tosale joinof theassets call(Note at3)           -         50,000          50,000
 thatDepreciation time,and aamortization replay(Note will4)               156,861       (58,584)         98,277
be availableOther fortaxes one(Note week5)                                 115,444       (13,451)        101,993
                                                   -----------    ----------     -----------
                                                    1,894,354        17,940       1,912,294
                                                   -----------    ----------     -----------
Operating byincome                                      231,503       (19,915)        211,588
Other callingincome 877(deductions) (Note 6)                     (2,697)        7,584           4,887
                                                   -519-4471---------    ----------     -----------
Income before interest charges                        228,806       (12,331)        216,475
Interest pincharges #2559229;(Note the7)                             202,487        (8,132)        194,355
                                                   -----------    ----------     -----------
Income internationalbefore replayincome numbertaxes                             26,319        (4,199)         22,120
Income istaxes 973(Note 8)                                  13,312          (388)         12,924
                                                   -341-3080---------    ----------     -----------
Net income                                             13,007        (3,811)          9,196
pinDividends #2559229.on preferred stock                           15,515                        15,515
                                                   -----------    ----------     -----------
Balance available for common stock                 $   (2,508)    $  (3,811)     $   (6,319)
                                                   ===========    ==========     ===========

InNIAGARA addition,MOHAWK thePOWER conferenceCORPORATION callAND willSUBSIDIARY beCOMPANIES webcastUNAUDITED livePRO andFORMA archivedCONSOLIDATED atBALANCE http://www.NiagaraMohawk.com and http://www.StreetEvents.com. Listeners should go to either web site at least fifteen minutes before the event to download and install any necessary audio software. A replay will be available beginning approximately two hours after the conclusion of the conference call. There is no charge to access the call. SHEETS

                                                                June 30, 2001
NOTE                                                                          Pro Forma
                                                          As Reported    Adjustments     Pro Forma
                                                          ------------   -----------    ------------
                                                                   (in thousands of dollars)
ASSETS
Utility plant:
 ThisElectric releaseplant contains(Note statements9)                                  $ that7,201,994    $(2,400,976)   $ constitute4,801,018
 forwardNuclear fuel (Note 9)                                        674,721       (674,721)             -looking
 information.Gas Suchplant                                                  1,326,578                     1,326,578
statements areCommon subjectplant to(Note certain9)                                        359,604                       359,604
 risksConstruction work in progress (Note 9)                       245,093        (25,860)       219,233
                                                          ------------   ------------   ------------
  Total uncertaintiesutility plant                                       9,807,990     (3,101,557)     6,706,433
 Less-Accumulated depreciation and assumptions.amortization All(Note of9)    4,111,520     (1,966,331)     2,145,189
                                                          ------------   ------------   ------------
  Net theseutility forwardplant                                         5,696,470     (1,135,226)     4,561,244
                                                          -looking-----------   ------------   ------------
statementsOther areproperty basedand oninvestments estimates(Note and10)                      441,542       (349,530)        92,012
                                                          ------------   ------------   ------------
Current assumptionsassets:
 madeCash, byincluding thetemporary company’scash managementinvestments which,(Note although11)          82,698         38,397        121,095
believed byFunds therestricted company’sfor managementrepayment toof bedebt reasonable(Note 11)                            217,582        217,582
 areAccounts inherentlyreceivable uncertain.(less Suchallowance forward-lookingfor doubtful
statements  accounts)                                                   264,358                       264,358
 areNotes notreceivable guarantees- ofConstellation futureEnergy performance(Note or12)                  -         49,956         49,956
 resultsMaterials and involvesupplies, certainat risksaverage andcost:
  Gas uncertainties.storage                                                  41,124                        41,124
Actual  Other results(Note or13)
                                                               90,162        (71,535)        18,627
 developmentsAssets mayfrom differprice materiallyrisk frommanagement theactivities                     112                           112
 forwardPrepaid taxes                                                 33,639                        33,639
 Other                                                         16,410                        16,410
                                                          -looking-----------   ------------   ------------
                                                              528,503        234,400        762,903
                                                          ------------   ------------   ------------
Regulatory statementsassets:
 asMRA aregulatory resultasset                                       3,151,007                     3,151,007
 Swap contracts regulatory asset                              611,646                       611,646
 Regulatory tax asset (Note 14)                               409,636       (269,511)       140,125
 IPP restructuring costs                                      215,669                       215,669
 Deferred environmental restoration costs                     285,000                       285,000
 Deferred loss on sale of variousassets factors.(Note 15)                    122,804      1,171,356      1,294,160
 Postretirement benefits other than pensions                   43,164                        43,164
 Unamortized debt expense                                      37,787                        37,787
 Other (Note 16)                                              168,921        (45,249)       123,672
                                                          ------------   ------------   ------------
                                                            5,045,634        856,596      5,902,230
                                                          ------------   ------------   ------------
Other assets (Note 12)                                         90,843        199,822        290,665
                                                          ------------   ------------   ------------
                                                          $11,802,992    $  (193,938)   $11,609,054
                                                          ============   ============   ============

NIAGARA MOHAWK HOLDINGS,POWER INC. CONSOLIDATEDCORPORATION STATEMENTSAND OFSUBSIDIARY INCOME (Unaudited) COMPANIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS

                                                                           In                                                              June thousands30, of dollars2001
                                                                   Three                                                                         Pro Months Ended      Twelve Months EndedForma
                                                                       March                                                          As 31,                MarchReported    Adjustments     Pro 31,Forma
                                                                  2001         2000         2001         2000
                                                          ------------   -----------   -----------------------------------------------------------------------------------------
OPERATING                                                                 (in REVENUES:thousands of dollars)
Electric                                                      $  977,224   $  929,269   $3,847,881   $3,529,492
Gas                                                              389,813      264,339      858,671      621,158
Other                                                                180          977        5,352        8,987
----------------------------------------------------------------------------------------------------------------
                                                               1,367,217    1,194,585    4,711,904    4,159,637
----------------------------------------------------------------------------------------------------------------
OPERATINGCAPITALIZATION EXPENSESAND LIABILITIES
Capitalization:
Electricity purchased                                            440,675      375,055    1,780,566    1,212,574
FuelCommon forstockholders' electric generation                                      14,317       13,330       75,327      145,893equity
Gas  Common purchased                                                    280stock,364      156,986      557,422      339,848
Other operationissued and maintenanceoutstanding expenses                         258187,495      222364,868      949863 shares $   187,337      943365    $             $   187,730365
Amortization/accretion  Repurchase of MRA/IPPHoldings' buyoutcommon costs                    91stock,073       93 at cost              (407,658      372193)                    (407,902      366,719193)
Depreciation  Capital stock premium and amortization                                     77expense                         2,887       77363,950      312095                    2,274      328363,607095
Other  Accumulated taxes                                                       50,583       68,332      266,809      358,932
----------------------------------------------------------------------------------------------------------------
                                                               1,213,394    1,008,179    4,314,637    3,696,303
----------------------------------------------------------------------------------------------------------------
OPERATINGother INCOME                                                 153comprehensive income                      (20,823      186384)                     (20,406      397,267      463,334384)
Other  Retained incomeearnings (deductionsNote 17)                                          2                                 259,334       438          (4,918239)      (6       259,290)         423199
                                                          ------------   -----------   -----------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES                                   156                                                            2,157      181382,488      390321          (239)     2,977      463382,757082
Interest charges                                                 102Non-redeemable preferred stock                               440,895      111000                      440,332      428,837      466,297000
Preferred dividendMandatorily requirementredeemable ofpreferred subsidiarystock                        51,950                       751,758        7950
 Long-term debt                                             4,904       31735,291       35477                    4,688735,477
                                                          ------------   -----------   -----------------------------------------------------------------------------------------
INCOME  Total (LOSS) BEFORE INCOME TAXES                                 45capitalization                                      7,504       62609,252      748          (69,151239)     (387,228)
Income taxes                                                      17609,380       47,778      (37,167)       9,411509
                                                          ------------   -----------   -------------
Current liabilities:
 Short----------------------------------------------------------------------------term debt                                                5,000                        5,000
INCOME (LOSS)Long-term BEFOREdebt EXTRAORDINARYdue ITEMwithin ANDone CUMULATIVEyear                           418,121                      418,121
 EFFECTSinking OFfund Arequirements CHANGEon INredeemable ACCOUNTINGpreferred PRINCIPLE                       28stock        7,124       14620                        7,474      (31620
 Accounts payable                                             223,984)     (47899                      223,639)899
Extraordinary itemPayable -on Lossoutstanding frombank thechecks                            18,625                       18,625
 extinguishmentCustomers' of debtdeposits                                           20,393                       20,393
  net ofAccrued tax                                                           -            -taxes (Note 14)                                       58,532         6,833         65,365
 Accrued interest                                              92,256                       92,256
 Accrued vacation pay (909Note 18)                                     35,206        (236,807150)        29,056
Cumulative effectLiabilities offrom changeprice inrisk accountingmanagement principleactivities             33, net296                       33,296
  of tax                                                          12Other                                                        184,790            -       12070                      184,790            -070
                                                          ------------   -----------   -----------------------------------------------------------------------------------------
NET INCOME (LOSS)                                             $   40                                                            1,914   $   14097,474   $  (20018           683      1,103)  $  (71097,446)701
                                                          ------------   -----------   -----------------------------------------------------------------------------------------
AverageRegulatory numberand ofother shares of commonliabilities:
 stockAccumulated outstandingdeferred income taxes  (inNotes thousands14 and 17)                                160       1,240      177489,352627      163(204,136      184727)     1,201284,900

Basic andLiability dilutedfor earningsswap (loss) per average share ofcontracts                                 757,059                      757,059
 commonEmployee stockpension before extraordinary item and cumulative
other effectbenefits of change in accounting principle                     $     0.18   $     0.08   $    (0.20Note 19)  $    (0.                214,895        26),900        241,795

Extraordinary itemOther per(Note average share of common stock                   -            -           --        16)                                              349,645       (0.1316,555)       333,090
Cumulative effect of change in accounting principle                 0.08                                                                      -         0.08            -
----------   -----------   ------------
                                                            2,811,226      (194,382)     2,616,844
                                                          ------------   -----------   --------------------------------------------------------
BasicCommitments and diluted earnings (loss) per averagecontingencies:
 shareLiability offor commonenvironmental stock                                        $     0.26   $     0.08   $    (0.12)  $    (0.39)restoration                      285,000                      285,000
                                                          ------------   -----------   -----------------------------------------------------------------------------------------
OTHER OPERATING DATA:
Earnings before interest charges                                                          $11, interest income802,992    $ income taxes,
depreciation and amortization, and other regulatory adjustments (EBITDA)                $1193,102,600938)   $111,182609,800054
Net cash interest                                                                       $  349,300                                                          ============   $  377,000===========   ============
Ratio of EBITDA to net cash interest                                                           3.2          3.1

NOTES: TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

- The ~~above~~accompanying ~~information~~Pro isForma Consolidated ~~not~~Financial ~~given~~Information infor ~~connection~~Holdings ~~with~~and ~~any~~Niagara ~~sale~~Mohawk orfor ~~offer~~year toended ~~sell~~December or31, 2000, ~~buy~~the ~~any~~six ~~stock~~months ~~or security. - The~~ended ~~Company~~June ~~files~~30, ~~periodic~~2001, ~~reports~~and ~~pursuant~~at toJune ~~the~~30, ~~Securities~~2001, ~~Exchange~~is ~~Act~~unaudited. This offinancial ~~1934.~~information ~~Accordingly,~~does ~~with~~not ~~respect to~~contain the ~~financial~~detail ~~information~~or ~~set~~footnote ~~forth~~disclosure ~~above,~~concerning ~~you~~accounting ~~are~~policies ~~requested~~and toother ~~refer~~matters tothat ~~such~~would ~~filings~~be ~~for~~included ~~more~~in full ~~detailed~~fiscal ~~information~~year financial statements.

NIAGARANOTE MOHAWK1 POWER- CORPORATIONFUEL AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) COSTS

In The ~~thousands~~$39.0 ofmillion ~~dollars~~and $16.5 ~~Three~~million ~~Months~~decrease ~~Ended Twelve~~in ~~Months~~fuel ~~Ended March~~for ~~31, March~~electric ~~31, 2001~~ generation for 2000 ~~2001 2000 ----------------------------------------------------------------------------------------------------------- OPERATING~~ REVENUES: Electric $ 823,566 $ 828,046 $3,234,773 $3,226,057 Gas 356,140 245,847 768,795 579,155 ----------------------------------------------------------------------------------------------------------- 1,179,706 1,073,893 4,003,568 3,805,212 ----------------------------------------------------------------------------------------------------------- OPERATINGand ~~EXPENSES: Electricity~~the ~~purchased 291,053 279,890 1,187,086 925,963~~six ~~Fuel~~months ~~for~~ended ~~electric~~June ~~generation 14~~30,~~317 13~~ 2001,~~330 75,327 145,893 Gas~~ ~~purchased 249~~respectively,~~760 138,432 468,852 298,288 Other~~ ~~operation~~reflect ~~and~~the ~~maintenance~~discontinuance of expenses ~~248,625 217,656 919,036 919,798~~ ~~Amortization/accretion~~related to the sale of ~~MRA/IPP~~the ~~buyout~~nuclear ~~costs 91,073 93,658 372,902 366,719 Depreciation~~assets. The $306.5 million and ~~amortization 77,768 77,832 311,739 328,070 Other~~$128.7 ~~taxes 50,403 67,995 265,919 358,114~~million ----------------------------------------------------------------------------------------------------------- 1,022,999 888,793 3,600,861 3,342,845 ----------------------------------------------------------------------------------------------------------- OPERATINGincrease ~~INCOME 156,707 185,100 402,707 462,367 Allowance~~in electricity purchased for ~~other~~2000 ~~funds~~and ~~used~~the ~~during~~six ~~construction 797 (264) 3~~months ended June 30,~~511 3~~ 2001,~~013 Other~~ ~~deductions (1~~respectively,~~586) (7,101) (21,690) (12,078) ----------------------------------------------------------------------------------------------------------- INCOME~~ ~~BEFORE~~reflect ~~INTEREST~~the ~~CHARGES 155,981 177,735 384,528 453,302~~costs to replace the power which would have ~~Allowance~~been ~~for~~otherwise ~~borrowed~~available ~~funds~~from ~~used~~owning ~~during~~these ~~construction (906) 281 (4,348) (4,567)~~nuclear assets. Niagara Mohawk ~~Interest~~entered ~~charges 103~~into PPAs with Constellation,~~801 111,051 433,185 470,864 ----------------------------------------------------------------------------------------------------------- INCOME~~ ~~(LOSS)~~the ~~BEFORE~~new ~~INCOME~~owners ~~TAXES 53~~of the nuclear assets,~~023 66,403 (44,309) (12,995)~~ to ~~Income~~purchase ~~taxes 17~~energy at negotiated competitive prices for approximately ten years. In addition,~~774 45,570 (37,322)~~ electric revenues were reduced by $5.4~~,282 ----------------------------------------------------------------------------------------------------------- INCOME~~ ~~(LOSS)~~million ~~BEFORE~~for ~~EXTRAORDINARY~~2000 ~~ITEM 35,249 20,833 (6,987) (17,277)~~and ~~Extraordinary~~$2.0 ~~item~~million -for ~~Loss~~the ~~from~~six ~~the~~months ~~extinguishment of~~ended ~~debt~~June 30, ~~net~~2001 ofto ~~income~~reflect ~~taxes - - (909) (23,807) ----------------------------------------------------------------------------------------------------------- NET~~the ~~INCOME~~loss ~~(LOSS) 35,249 20,833 (7,896) (41,084)~~of ~~Dividends~~voltage onsupport ~~preferred~~income ~~stock 7,758 7,904 31,291 35,688 ----------------------------------------------------------------------------------------------------------- BALANCE~~due ~~AVAILABLE~~to ~~FOR~~the ~~COMMON~~sale ~~STOCK $ 27,491 $ 12,929 $ (39,187) $ (76,772)~~of the nuclear assets. ~~-----------------------------------------------------------------------------------------------------------~~

~~NOTES:~~ The adjustments assume that under the PPAs with Constellation, Niagara Mohawk will purchase 90 percent of the output for Unit 1 and 37 percent of the output for Unit 2 (90 percent of Niagara Mohawk’s 41 percentage ownership of Unit 2) or 7,166,149 Megawatt-hours (“MWhs”) in 2000 for a price of $36.57/MWh and 3,277,517 MWhs for the 6 months ended June 30, 2001 for a price of $33.53/MWh. The adjustments also assume that Niagara Mohawk will purchase 796,239 MWhs in 2000 from the New York Independent System Operator (“NYISO”) for a price of $55.88/MWh and 364,100 MWhs for the 6 months ended June 30, 2001 for a price of $51.58/MWh. The NYISO prices reflect the actual historical variable market prices in effect at the time. Although the prices Niagara Mohawk must pay for electricity are higher than the fuel costs incurred when the assets were owned, Niagara Mohawk avoids operating costs from running these plants, including labor, fuel, real estate taxes and depreciation.

- TheNOTE above2 information is not given in connection with any sale or offer to sell or buy any stock or security. - The CompanyOTHER filesOPERATION periodicAND reports pursuant to the Securities Exchange Act of 1934. Accordingly, with respect to the financial information set forth above, you are requested to refer to such filings for more detailed information. MAINTENANCE

~~NIAGARA~~The ~~MOHAWK~~$142.5 ~~HOLDINGS~~million and $72.2 million decreases in other operation and maintenance expenses for 2000 and the 6 months ended June 30, ~~INC~~2001, respectively, represent a reduction of operation and maintenance expenses associated with the sale of the nuclear assets. These expenses include items such as the operating ~~(Unaudited)~~and maintenance costs to run the plants, labor and related employee-benefit ~~EARNINGS~~costs, ~~REPORT~~property insurance and materials and supplies. Direct costs consist of ~~(In~~approximately ~~thousands~~90 percent of ~~dollars)~~the other operation and maintenance expenses for 2000 and the 6 months ended June 30, 2001.

ThreeNOTE Months3 Ended Twelve Months Ended March 31, March 31, 2001 2000 2001 2000 ----------- ----------- ---------- ----------- Operating Revenues $1,367,217 $1,194,585 $4,711,904 $4,159,637 OperatingAMORTIZATION Income 153,823 186,406 397,267 463,334 IncomeOF (Loss)NUCLEAR BeforeREGULATORY Extraordinary Item and Cumulative Effect of a Change in Accounting Principle 28,124 14,474 (31,984) (47,639) Extraordinary Item for Loss from Extinguishment of Debt (Net) -- -- (909) (23,807) Cumulative Effect of Change in Accounting Principle 12,790 -- 12,790 -- Net Income (Loss) $ 40,914 $ 14,474 $ (20,103) $ (71,446) Average Number of Shares of Common Stock Outstanding (in thousands) 160,240 177,352 163,136 184,201 Basic and Diluted Earnings (Loss) per Average Share of Common Stock Before Extraordinary Item and Cumulative Effect of Change in Accounting Principle $ 0.18 $ 0.08 $ (0.20) $ (0.26) Extraordinary Item Per Average Share of Common Stock -- -- -- (0.13) Cumulative Effect of Change in Accounting Principle $ 0.08 $ -- $ 0.08 $ -- Basic and Diluted Earnings (Loss) per Average Share of Common Stock $ 0.26 $ 0.08 $ (0.12) $ (0.39) ----------- ----------- ----------- ----------- ASSET

~~Note 1:~~ The ~~above~~amortization ~~information~~of the isloss ~~not~~on ~~given~~the insale ~~connection~~of ~~with~~assets ~~any~~for ~~sale~~2000 orand ~~offer~~the to6 ~~sell~~months orended ~~buy~~June ~~any~~30, ~~stock~~2001 ~~or security~~was ~~Note~~$100.0 ~~2: The~~million ~~company~~and ~~files~~$50.0 ~~periodic~~million, ~~reports~~respectively. ~~pursuant~~The todeferred loss on the ~~Securities~~sale ~~Exchange~~of ~~Act~~assets was established as a result of ~~1934. Accordingly,~~the sales of Niagara Mohawk’s generating assets in accordance with PSC ~~respect~~Orders toapproving the ~~financial~~ ~~information~~sales. ~~set~~See ~~forth~~note ~~above,~~15 ~~you~~for ~~are~~a further ~~requested~~discussion toof ~~refer~~the todeferred ~~such~~loss ~~filings~~on ~~for~~the ~~more~~sale ~~detailed~~of ~~information~~assets.

NOTE 4 - DEPRECIATION AND AMORTIZATION

The $114.6 million and $58.6 million decreases in depreciation and amortization for 2000 and the 6 months ended June 30, 2001, respectively, reflect decreased depreciation expense and nuclear decommissioning costs related to the sale of the nuclear assets.

NOTE 5 - OTHER TAXES

The $27.4 million and $13.5 million decreases in other taxes for 2000 and the 6 months ended June 30, 2001, respectively, principally reflect decreased property taxes due to the sale of the nuclear assets.

NOTE 6 - OTHER INCOME (DEDUCTIONS)

The $21.1 million and $7.6 million increases in other income (deductions) for 2000 and the 6 months ended June 30, 2001, respectively, principally reflect interest income earned on the notes receivable resulting from the nuclear sale (using 11.0 percent interest rate), the elimination of the income received from the co-tenants related to the carrying costs on the inventory for Unit 2 and the elimination of the equity portion of the allowance for funds used during construction relating to nuclear generation construction projects.

NOTE 7 - INTEREST CHARGES

The $7.8 million and $7.6 million decreases in interest charges for 2000 and the 6 months ended June 30, 2001, respectively, primarily reflect decreased interest expense as a result of the required use of the sale proceeds to fund $217.6 million in debt reductions and the elimination of the interest portion of the allowance for funds used during construction relating to nuclear generation construction projects. The redemptions are assumed to occur 180 days subsequent to the receipt of the net proceeds from the sale of the nuclear assets.

NOTE 8 - INCOME TAXES

The $17.4 million and $0.4 million decrease in income taxes for 2000 and the 6 months ended June 30, 2001, respectively, primarily reflect lower overall net taxable income because of the items described above, calculated at the federal statutory federal income tax rate of 35.0 percent. This was partially offset by the elimination of the amortization of investment tax credits associated with the nuclear assets of $3.5 million and $1.1 million for 2000 and the 6 months ended June 30, 2001.

NOTE 9 - ELECTRIC PLANT AND NUCLEAR FUEL SOLD

The decrease of $2,401.0 million in electric plant and $25.9 million in construction work in progress represents the original cost of utility property, plant, and equipment sold to Constellation. In addition, the entire balance of nuclear fuel was sold to Constellation in the amount of $674.7 million. Accumulated depreciation , which includes accumulated amortization of nuclear fuel, was reduced by $1,966.3 million as a result of the sale of the nuclear assets.

NOTE 10 - OTHER PROPERTY AND INVESTMENTS

The decrease of $349.5 million in other property and investments represents the transfer of the decommissioning trust fund to Constellation.

NOTE 11 - NET CASH PROCEEDS

Cash and funds restricted for repayment of debt increased by $271.0 million, which represents the cash proceeds that was received for the nuclear assets, partially offset by the estimated expenses associated with the nuclear sale of $15.0 million. Funds restricted for repayment of debt represents the 85 percent of cash proceeds that are required to be used for debt reductions within 180 days of receipt.

NOTE 12 - NOTES RECEIVABLE

The increase of $249.8 million in notes receivable and other assets represents the note receivable that Niagara Mohawk received from Constellation upon the closing of the sale of the nuclear assets. The principle balance note receivable is scheduled to be received in five equal annual installments. The current portion ($50.0 million) is shown in notes receivable and the noncurrent portion is recorded in other assets.

NOTE 13 - MATERIALS AND SUPPLIES SOLD

Materials and supplies were reduced by $71.5 million as a result of the sale of the nuclear materials and supplies.

NOTE 14 - TAXES

Accrued taxes were increased by $6.8 million to reflect the provision for deferred taxes on the tax gain on the sale of the nuclear assets of $16.6 million with a corresponding decrease in accumulated deferred income taxes, partially offset by a decrease of $9.8 million to reflect the real estate tax adjustments associated with the sale. The decrease of $269.5 million in the regulatory tax asset was primarily due to the reclassification of Statement of Financial Accounting Standards No. 109 (“SFAS No. 109”) nuclear regulatory asset to the deferred loss on the sale of the assets. The $204.7 million decrease in accumulated deferred income taxes liability primarily represents the elimination of the SFAS No. 109 net regulatory asset associated with nuclear assets of $197.0 million.

NOTE 15 - DEFERRED LOSS ON SALE OF ASSETS

The increase of $1,171.4 million in the deferred loss on the sale of the assets represents the deferral for future recovery of the net losses resulting from the sale of the nuclear assets. The deferred loss on the sale of the assets was reduced by the stranded costs that Niagara Mohawk was required to write-off of $123 million in accordance with the October 26, 2001 PSC Order approving such sale. This asset is expected to be recovered and amortized over approximately 12 years.

NOTE 16 - OTHER REGULATORY ASSETS AND LIABILITIES

The decrease in other regulatory assets of $45.2 million and the decrease in other regulatory liabilities of $16.6 million reflect the reclassification of nuclear regulatory assets and liabilities to the deferred loss on the sale of assets.

NOTE 17 - RETAINED EARNINGS

The decrease of $0.2 million in Retained Earnings reflects the non-cash after tax write-off of $79.9 million in accordance with the October 26, 2001 PSC Order approving such sale, partially offset by the recognition of ITCs with the corresponding decrease in accumulated deferred income taxes. Unamortized ITCs associated with the nuclear assets are not transferable to the new owners, but flow through to income as a result of the sale. Because these items constitute a one-time event resulting from the sale, we have credited retained earnings on the pro forma balance sheet for $79.7 million in ITCs but have not reflected this amount on the pro forma income statement.

NOTE 18 - ACCRUED VACATION PAY

The decrease in accrued vacation pay of $4.2 million reflects the cash paid to nuclear employees for their accrued vacation pay.

NOTE 19 - EMPLOYEE PENSION AND OTHER BENEFITS

The increase of $26.9 million in employee pension and other benefits liability represents recognition of the estimated pension curtailment loss as a result of employees transferring to the buyers. This loss is also included in the deferred loss on the sale of assets account.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Form 8-K may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements should be read with the cautionary statements and important factors included in the Holdings and Niagara Mohawk’s Annual Report on Form 10-K for the year ended December 31, 2000, before Item 1, “Business.” Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words “expects,” “believes,” “anticipates,” and similar expressions.

NIAGARA MOHAWK HOLDINGS, INC. AND SUBSIDIARY COMPANIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

                                                                                 NIAGARA MOHAWK HOLDINGS, INC.
                                                                                                            (Registrant)

Date:  November 9, 2001                                       By: /s/ Steven W. Tasker
                                                                                            Steven W. Tasker
                                                                                            Vice President–Controller and
                                                                                            Principal Accounting Officer,
                                                                                            in his respective capacities as such

                                                                                 NIAGARA MOHAWK POWER CORPORATION
                                                                                                            (Registrant)

Date:  November 9, 2001                                       By: /s/ Steven W. Tasker
                                                                                            Steven W. Tasker
                                                                                            Vice President–Controller and
                                                                                            Principal Accounting Officer,
                                                                                            in his respective capacities as such

EXHIBIT INDEX

Following is the index of Exhibits furnished in accordance with the provisions of Item 601 of Regulation S-K, filed as part of this current report on Form 8-K.

Exhibit No. 99 - Press release of Niagara Mohawk issued on November 7, 2001 relating to its sale of the nuclear generation assets.

Filing Compare · NIAGARA MOHAWK HOLDINGS INC/NY