NE ELECTRIC <NES> AUDITORS QUALIFY ANNUAL REPORT
  New England Electric System's auditors
  have again qualified the utility's annual report because of
  uncertainty about whether its oil and gas subsidiary can
  recover its investments.
      The qualification was noted in the annual report which New
  England Electric released at a security analysts meeting today.
  The auditors also qualified the company's 1985 report for the
  same reason, noting the sharp drop in oil and gas prices in
  early 1986.
      President Samuel Huntington told analysts the utility will
  have to take a write-down of about 235 mln dlrs if Federal
  regulators do not allow the company to pass on the losses cited
  by the accountants to its rate payers.