Forward-Looking Statements

This filing contains certain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, related to the expected future performance of our plans and objectives, such as forecasts and projections of expected future performance or statements of Management's plans and objectives. These forward-looking statements may be contained in filings with the SEC and in press releases and oral statements. We use words such as "anticipate," "estimate," "predict," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. These statements are based on the current expectations, estimates or projections of Management and are not guarantees of future performance. Some or all of these forward-looking statements may not turn out to be what the Company expected. Actual results will differ, and some of the differences may be material.

Factors that could cause actual results to differ materially from our projections include, among other matters, legislation and regulation; construction of new transmission facilities; development of MAM USG; attraction and retention of qualified employees; economy of the region and general economic conditions; competitive conditions; holding company structures; interest rate and debt covenant risk; pension plan investments; information technology; environmental risks; aging infrastructure and reliability; weather; vandalism, terrorism and other illegal acts; alternative generation options; professional liability; final settlement of remaining obligations of discontinued operations; divestiture of unregulated real estate; and foreign operations. Therefore, no assurances can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

Accounting Policies

Critical accounting policies are disclosed in the Company's 2007 Annual Report
on Form 10-K.

Results of Operations and Executive Overview

Net Income and Earnings Per Share

                                               Quarters Ended June 30,            Six Months Ended June 30,
(Dollars in Thousands Except per Share
Amounts)                                       2008               2007             2008               2007
Income (Loss) from Continuing Operations
Regulated Electric Utility                 $        213       $        456     $      2,200       $      2,411
Unregulated Utility Services                       (190 )                -              (95 )                -
Other*                                              (79 )             (270 )           (186 )             (665 )
(Loss) Income from Continuing Operations            (56 )              186            1,919              1,746
Loss from Discontinued Operations
Unregulated Engineering Services                    (12 )             (446 )            (21 )             (525 )
Unregulated Software Technology                       -               (117 )              -               (247 )
Loss from Discontinued Operations                   (12 )             (563 )            (21 )             (772 )

Net (Loss) Income                          $        (68 )     $       (377 )   $      1,898       $        974

Basic (Loss) Income Per Share              $      (0.04 )     $      (0.22 )   $       1.13       $       0.59

Executive Overview

Overall results continue to be better than the prior year for the quarter and for the year-to-date. The net losses for the second quarter and net income year- to-date are $68,000 and $1.9 million, respectively, compared with prior year's net loss for the quarter of $377,000 and net income for prior year-to-date of $974,000, indicating a 95% increase in net income year-to-date. Last year's net income for the second quarter had losses from discontinued operations of $563,000 for the quarter and $772,000 for year to date. Losses from discontinued operations were not a significant factor in the current year results which highlights our success in divesting our unprofitable segments.

While it is normal for us to experience losses in the second and third quarters due to seasonality of our earnings at the utility as a result of the rate structure mandated by our regulators, results for the quarter were negatively affected by a large increase in expense due to a change in deferred directors' compensation. This expense of $518,000 is a mixed blessing. It is the result of our stock price moving up 54% from $27.80 per share at the end of the first quarter, to $42.75 per share at the end of the second quarter. We are very happy for our shareholders that this increase took place; however, it does have the inverse effect of generating a non-cash expense for the overall increase in the value of phantom shares owned by our board members. We still firmly agree that aligning the interests of directors and shareholders through the use of phantom shares is important, and the issuance of these shares eliminates a portion of the immediate cash requirement for director compensation.

Another trend we see developing for utilities in the region, including ours, is the impact of the overall economy and cost of energy on the volume of energy consumption. Overall regulated utility revenues are down $146,000 for the quarter and $160,000 year to date for our utility. Despite revenues being off, our financial performance at the utility in terms of net income remained positive for the quarter. Operations and maintenance expenses are up $137,000 for the quarter and $97,000 year to date compared with the prior year. If not for the increase in deferred directors' compensation, operations and maintenance expenses would be significantly lower for the quarter and flat for the year to date.

We have made significant progress on the Maine Power Connection project. We jointly filed for two regulatory approvals with our partner, Central Maine Power Company. On July 1, 2008 we filed with the MPUC for a CPCN, requesting approval for the physical siting of the transmission line. We also filed with FERC on July 18, 2008, requesting incentive rate treatment on our line of an additional 150 basis points above our current allowed return on equity of 10.5%. In addition, the FERC filing requests regulatory approval for recovery of abandoned plant to protect us from any risks of not recovering development costs. We will continue to diligently pursue these approvals. In order for the project to be built, we will also need to become a member of ISO-NE, and obtain its approval of inclusion of project costs in ISO-NE regional rates. Due to the magnitude of the project for our customers and the State of Maine, we cannot accurately predict when these proceedings will conclude or if all will conclude favorably. However, we would like to see these approvals obtained by year end, which would lead to construction commencing before the end of 2009.

In parallel with these regulatory filings, we are working with ISO-NE on the cost-benefit analyses and terms under which this project could be included in the regional transmission network and MPS could become a member of ISO-NE. We expect this approval process to coincide with the other regulatory approvals mentioned above.

Our newest segment, MAM USG, recognized a loss for the quarter of approximately $190,000 and a year-to-date net loss of $95,000. While the electrical construction projects MAM USG is working on are estimated to provide a profitable operating margin, two factors contributed to the second quarter loss. The first factor is MAM USG's pro rata share of common costs of the parent holding company which includes its portion of the deferred directors' compensation expense, as well as other common costs that cannot be directly attributable to a specific segment. The second factor is a revised estimate of project costs and profitability based on our experience with/performance of the jobs to date and related requests for change orders from the project owners.

Overall, Management is pleased with the progress of our strategy and our financial results are in line with our expectations.

Regulated Operations

Regulated operations include MPS and Me&NB, the Company's regulated subsidiary
and its inactive unregulated Canadian subsidiary:

                                       Quarters Ended              Six Months Ended
                                          June 30,                     June 30,
                                     2008          2007           2008          2007
      Net Income - Regulated
      Electric Utility (In
      thousands)                  $      213     $     456     $    2,200     $   2,411
      Earnings Per Share from
      Regulated Electric
      Utilities                   $     0.13     $    0.27     $     1.31     $    1.45

Regulated Operating Revenue

Consolidated revenues (in thousands of dollars) and Megawatt Hours ("MWH") for
the quarters and six months ended June 30, 2008, and 2007, are as follows:

                                  Quarters Ended June 30,                               Six Months Ended June 30,
                             2008                        2007                        2008                       2007
                     Dollars         MWH         Dollars         MWH        Dollars         MWH        Dollars         MWH
Residential         $   3,561        41,212     $   3,582        42,126     $  7,906        92,634     $  7,919        94,123
Large Commercial          949        37,399         1,034        43,682        2,296        75,403        2,517        86,415
Medium Commercial       1,061        24,346         1,047        25,456        2,916        50,691        2,995        53,290
Small Commercial        1,394        21,409         1,413        21,742        3,882        47,338        3,929        48,297
Other Retail              231           848           228           847          463         1,699          456         1,694

Total Regulated
Retail                  7,196       125,214         7,304       133,853       17,463       267,765       17,816       283,819

Other Regulated
Operating Revenue         609                         647                      1,243                      1,050

Total Regulated
Revenue             $   7,805                   $   7,951                   $ 18,706                   $ 18,866

Residential and small commercial sales decreased $21,000 and $19,000, respectively, for the three months ended June 30, 2008, compared to the same period of 2007, due to the approximately 2% decreases in volume for each. Medium commercial sales were up $14,000, due to an increase in average prices. Sales volume from these customers decreased 1,110 MWH or 4.4%. These decreases in sales volume have continued from the first quarter, and are due primarily to customers ceasing or cutting back operations, or implementing conservation efforts.

Large commercial customer sales are down $85,000 on a 6,283 MWH or 14.4% decrease in volume. Similar to the first quarter of 2008, the largest decreases include reductions in usage by our two largest customers and two local mills. The duration of these cutbacks is unknown.

Other retail revenue for the quarter is up approximately $3,000, on a 1 MWH increase in volume and an increase in the average price. Other regulated operating revenue consists of transmission wheeling revenue, unbilled revenue and profits on billable work. This revenue has decreased from $647,000 in the second quarter of 2007 to $609,000 in the second quarter of 2008, primarily due to lower profits on billable work.

Consistent with the quarter, residential customer sales are also down for the year to date, approximately $13,000 on a 1,489 MWH or 1.6% decrease in sales volume. Likewise, medium and small commercial customer sales decreased $126,000 from the first half of 2007 to the first half of 2008, with volume down 3,558 MWH or 3.5%.

Year to date, large commercial customers have contributed $221,000 less revenue in 2008 than in the first six months of 2007, on 11,012 or 12.7% fewer MWH. The reduced sales volume to the customers identified in the quarterly explanation above was also the largest impact year to date.

Other retail revenue is also up for the year to date, approximately $7,000 and 5 MWH. Other regulated operating revenue is up $193,000 year-over-year. Wheeling revenue was up significantly in the first quarter of 2008 compared to the same period of 2007, contributing $271,000 more revenue in the first six months. This increase was partly offset by the decrease in unbilled revenue of approximately $72,000 due to lower volume, and other smaller differences.

MPS's 2008 OATT formula was filed June 16, 2008, based on the 2007 test year. As described in earlier filings, MPS transmission rates are based on the Company's revenue requirement (transmission expenses plus the allowed rate of return on assets) less the wheeling revenue earned. The rates go into effect on June 1 for wholesale customers, and July 1 for retail customers. The additional wheeling revenue earned in 2007 over 2006 offset the revenue requirement in the 2008 OATT formula. As a result, the revenue decreases were approximately $230,000 or 28% for wholesale customers, and $670,000 or 18% for retail customers.

For more information on regulatory orders approving the most recent rate increases, see Part II, Item 1, "Legal Proceedings."

Regulated Utility Expenses

For the quarters and six months ended June 30, 2008, and 2007, regulated
operation and maintenance expenses are as follows:

                                                Quarters Ended June 30,            Six Months Ended June 30,
(In thousands of dollars)                       2008               2007             2008               2007
Regulated Operation and Maintenance
Labor                                       $      1,108       $      1,132     $      2,371       $      2,251
Benefits                                             203                267              597                713
Outside Services                                     246                242              507                441
Holding Company Management Costs                     696                526              971                962
Insurance                                            127                131              258                273
Regulatory Expenses                                  303                247              613                500
Transportation                                       209                174              450                489
Maintenance                                          160                163              309                305
Other                                                253                286              566                611
Total Regulated Operation and Maintenance   $      3,305       $      3,168     $      6,642       $      6,545

Regulated operation and maintenance expense increased $137,000 or 4.3% for the second quarter of 2008 compared to the second quarter of 2007. The largest increases in expense were:

† Holding company management costs increased $170,000 quarter-over-quarter, due to the increase in the value of deferred directors' compensation. MAM's stock price increased $14.95 per share, from $27.80 at March 31, 2008, to $42.75 at June 30, 2008, resulting in $518,000 of non-cash expense, compared to $252,000 for the second quarter of 2007. Under the regulator-approved common cost allocation methodology, 77.6% or $402,000 was allocated to MPS and the remaining $116,000 to MAM USG in 2008, compared to 71.8% or $181,000 allocated to MPS for deferred directors' compensation in the second quarter of 2007, an increase of $221,000.

† Regulatory expenses increased $56,000, or 23%, from the quarter ended June 30, 2007, to the quarter ended June 30, 2008, due to higher regulatory annual fees.

These increases in expense were partly offset by the $88,000 decrease in labor and benefits expense. Insurance expense decreased $117,000, due to settlement of the 2006 and 2007 contingent health insurance premiums. Also, MPS employees have been working on two large MAM USG projects, reducing salaries and expenses at MPS approximately $24,000. These decreases were offset by increases in pension and post-retirement medical expense and in the additional 401(k) contributions to compensate employees for the pension freeze effective December 31, 2006.

Year to date, regulatory operation and maintenance expenses are up $97,000 or 1.5%. The increases include:

† Similar to the quarter, regulatory expenses are up $113,000 year-over-year as a result of the higher regulatory annual fees.

† Outside services have increased $66,000, from $441,000 for the first six months of 2007 to $507,000 for the first six months of 2008. As noted in the first quarter, certain engineering and information technology services were outsourced in late 2007 and early 2008.

Expense decreases in the first two quarters of 2008 partly offset these increases. The decreases were a result of:

† Transportation expense decreased $39,000 in the first half of 2008 compared to 2007. During the first quarter of 2007, additional maintenance work was required on the vehicle fleet, resulting in higher-than-normal expense. This reduction in fleet maintenance expense was partly offset by higher fuel costs.

† Other expenses fell by $45,000, due to a $26,000 reduction in rent expense for equipment rented in 2007 but not 2008, and a reduction in expensed materials.

Stranded cost expenses of the regulated utility are as follows:

                                               Quarters Ended June 30,            Six Months Ended June 30,
(In thousands of dollars)                      2008               2007             2008               2007
Stranded Costs
Maine Yankee                               $        588       $        721     $      1,176       $      1,441
Seabrook                                            384                384              768                768
Deferred Fuel                                     1,559              1,345            3,119              2,849
Cost Incentive Refund                                63                 62              125                125
Cancelled Transmission Plant                         64                 65              128                128
Special Discounts                                    70                 70              140                140
Total Stranded Costs                       $      2,728       $      2,647     $      5,456       $      5,451

The stranded cost expenses presented above for both 2008 and 2007 reflect the impact of MPS's most recent stranded cost rate case, MPUC Docket No. 2006-506. The amortization amounts for the rest of 2008 are expected to remain consistent with the first and second quarters. The changes from prior year are a result of the timing of recovery of stranded costs under the Docket, primarily related to Maine Yankee and deferred fuel. The recovery of Maine Yankee in the Docket correlates to Maine Yankee's cost budget, which is decreasing over time, while the recovery of deferred fuel is the levelizing mechanism, which allowed for less amortization of deferred fuel in 2007 than in 2008.

Unregulated Utility Services

 (in thousands except per share amounts)               Period Ending June 30, 2008
                                                       Quarter           Six Months
 Operating Revenue                                  $       2,078       $       3,374
 Cost of Services                                           2,092               3,210
 Gross Margin                                                 (14 )               164
 Other Operating Expenses                                     301                 320
 Income Tax Benefit                                           125                  61
 Net Loss - Unregulated Utility Services            $        (190 )     $         (95 )
 Loss Per Share from Unregulated Utility Services   $       (0.11 )     $       (0.06 )

Unregulated Utility Services is comprised of the operations of MAM USG. The activity for the quarter includes work performed on two significant wind farm projects outside of MPS's service territory, as well as other smaller projects. Year to date, these projects have earned approximately $164,000 of gross margin. The projects are expected to be completed during the third and fourth quarters of 2008.

Other Operating Expenses consist of administrative expenses to support the operations of MAM USG. These costs include accounting, legal and business development. Other operating expenses also include common costs allocated from the holding company, MAM. MAM USG's share of these common costs, including deferred directors' compensation, was $186,000 for the second quarter of 2008, and $209,000 year to date.

Other Continuing Operations

                                       Quarters Ended              Six Months Ended
                                          June 30,                     June 30,
                                     2008          2007           2008          2007
       Net Loss - Other
       Continuing Operations (in
       thousands)                  $     (79 )   $    (270 )   $     (186 )   $    (665 )
       Loss Per Share from Other
       Continuing Operations       $   (0.05 )   $   (0.16 )   $    (0.11 )   $   (0.40 )

Other continuing operations are the corporate costs of MAM directly associated with the former unregulated businesses and intercompany eliminations. The divestiture of the unregulated software technology and engineering services operations reduced the costs included in this segment; however, some of these costs are expected to continue subsequent to the divestiture of the unregulated operations without other cost reduction or recovery efforts.

Interest Expense

Interest expense decreased significantly, down $163,000 for the quarter and $269,000 for the year to date in 2008, compared to 2007, as a result of the repayment of debt. Nearly $6.5 million of short- and long-term debt has been repaid during the first six months of 2008, including MAM's term note with Bank of America and MPS's 1998 FAME Notes.

The offsetting stranded cost carrying charges are slightly lower in 2008 than in 2007, down $39,000 for the quarter and $93,000 for the year to date, as a result of the decreasing stranded cost asset balance. This trend will continue during the stranded cost recovery period.

Income Tax Expense / Benefit

Regulated income tax expense was $127,000 less in the second quarter of 2008 than the second quarter of 2007, as a result of lower earnings at MPS. Year-to-date regulated income tax expense is down $80,000, also do to lower earning in the segment year-over-year, and a slight reduction in the effective income tax rate.

The benefit of unregulated income taxes was $175,000 for the quarter ended June 30, 2008, compared to $181,000 for the same quarter of 2007. Year to date, the income tax benefit from continuing unregulated operations was $245,000 less than prior year, due to lower costs.

The benefit of income taxes from discontinued operations was also down for the quarter and year to date, due to the minimal impact of discontinued operations on net income in 2008.

Taxes Other Than Income

Taxes other than income are primarily payroll and property taxes. For both the quarter and year to date 2008, compared to 2007, there were no material changes in taxes other than income.

Off-Balance Sheet Arrangements and Financial Information System Hosting Agreement

Please refer to Note 8 of the financial statements.

Liquidity and Capital Resources

MAM has continued the trend of improving its liquidity position demonstrated in 2007 and the first quarter of 2008. In the six months ended June 30, 2008, we have reduced our consolidated short-term debt by $2.4 million, and long-term debt by $4.1 million. This includes the repayment of all but $1.2 million of debt incurred in the discontinued unregulated engineering and software technology acquisitions and operations. We have also substantially improved our cash flow from operating activities, which increased by $2.9 million or 52.6% year-over-year due to favorable differences in net income and accounts payable, and other changes.

The Company's cash and cash equivalents as of June 30, 2008, were $1.6 million, up from $910,000 at December 31, 2007. The "Statements of Consolidated Cash Flows" of the Company's Consolidated Financial Statements, as presented in Part I, Item 1 of this Form 10-Q, reflects the Company's sources and uses of capital.

Cash flow provided by operating activities for the first six months of 2008 was $8.4 million, compared to $5.5 million in the first six months of 2007. The increase in net income of $924,000 from the first two quarters of 2007 to the first two quarters of 2008 and the increase in accounts payable, as a result of higher accruals at June 30, 2008, than December 31, 2007, for the MPC project and construction season, were the largest factors in the increase in operating cash flow period-over-period. Net cash flow provided by operating activities was reduced the first half of 2008, compared to the first half of 2007, by $1.1 million from the change in accounts receivable and unbilled revenue.

Cash flow used for financing included the repayment of short- and long-term debt totaling $6.5 million in the first six months of 2008. Cash flow used for financing activities for the first six months of 2007 totaled $4.1 million, as long- and short-term debt was reduced.

Cash flow used for investing activities for the first half of 2008 was $1.2 million. The $4.2 million use of cash for investments in fixed assets was mitigated by the change in restricted investments which provided cash flows from the capital reserve account upon final payment of the 1998 FAME Notes obligation. For the first six months of 2007, cash flow used for investing activity totaled $925,000. The $2.6 million investment in fixed assets was offset by $1.8 million of proceeds from the sale of discontinued operations. Approximately $187,000 was used in the first six months of 2007 for settlement of the stock contingencies associated with acquisitions in 2003 and 2004. The final stock contingency obligations from TMG acquisitions were settled in September 2007.

In accordance with rate stipulations approved by the MPUC, for ratemaking purposes, MPS is required to maintain a capital structure not to include more than 51% common equity for the determination of delivery rates. Also, in the order approving the reorganization of MPS and the formation of MAM, the parties stipulated to several restrictions on the capital structure of MPS and MPS's . . .