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, financing risk for new transmission facilities, risk from joint development agreement, contract risks at MAM USG, attraction and retention of qualified employees, economy of the region and general economic conditions, competitive conditions, holding company structure, 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, and professional liability. 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 2008 Annual Report
on Form 10-K.

  Results of Operations and Executive Overview

  Net Income and Earnings Per Share

                                                    Quarters Ended March 31,
       (in thousands except per share amounts)       2009               2008
     Income (Loss) from Continuing Operations
        Regulated Electric Utility               $      1,486       $      1,987
        Unregulated Utility Services                      (13 )               95
        Other*                                            (67 )             (107 )
       Income from Continuing Operations                1,406              1,975
     Loss from Discontinued Operations
        Unregulated Engineering Services                    -                 (9 )

     Net Income                                  $      1,406       $      1,966

     Basic Income Per Share                      $       0.84       $       1.17

Net income above is allocated based upon the segments as presented in Note 3, "Segment Information," of the Consolidated Financial Statements. The results by segment are explained more fully in the following sections.

The first quarter 2009 consolidated net income of the Company was down $560,000 or 28.5% when compared to the first quarter of 2008. There are three primary reasons for this downturn:

1. Regulated revenues were lower by $789,000 or 7.2% compared to the same quarter last year. Of that amount, the majority was from the commercial customer class where the wood and lumber industry continues to mirror the national economy, suffering closures and layoffs within our service territory. Revenues were up approximately $129,000 or 3.0% for residential customers, but residential home owners also are looking to conserve. These trends started in the middle of 2008 and Management cannot say for certain if, or when, these trends may cease or reverse.

2. MAM USG, our unregulated contracting subsidiary, had no material projects during the first quarter of 2009, compared to having two large projects in the first quarter of 2008. The reduction in activity greatly impacted MAM USG revenues, which are down $1.1 million in the first quarter of 2009 compared to the first quarter of 2008. Because MAM USG expenses for the period were also significantly lower, the resulting impact on its net income was not nearly as great as the impact on its revenues - MAM USG had a small profit in 2008 and a small loss in 2009.

3. Cost increases at MPS, which are explained more fully in the MPS Regulated Utility Expenses Section below, include an increase in operations and maintenance expenses, net of a reclassification of expense from depreciation to operation and maintenance, by $206,000 or 6.2% over the same quarter in 2008.

We are taking the following steps to address these issues:

· MPS revenue dollars are partly protected from decreases in volume. In the Company's most recent stranded cost rate case, MPUC Docket No. 2006-506, MPS agreed to reconcile annually the projected sales volume on which the stranded cost rates were based to the actual sales volume. With volume down significantly, MPS recognized revenue and established a regulatory asset of $754,000 in the fourth quarter of 2008 to reflect this reconciliation provision. A similar adjustment is expected to be made in 2009, if the sales volume remains at current levels.

· MAM USG has several outstanding bids on projects with developer time horizons within the next one to three years. MAM USG is also pursuing other commercial and industrial projects.

· We continue to analyze and pursue additional transmission investments which would support the development of additional renewable generation within our service territory as well as possibly provide additional capacity, stabilization, and security for existing customers, principally on the project described in our previous filings as the MPC project. We continue to work with our partner, Central Maine Power Company, as well as generation developers on matters related to that project.

Strategically, management believes that our strategy of continued growth through the pursuit of prudent transmission and distribution investments, diversification of revenue lines within our core competencies through MAM USG, and cost controls provide the best balance for our shareholders and customers.

Regulated Operations

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


                                                                Quarters Ended
                                                                   March 31,
                                                               2009        2008
     Net Income - Regulated Electric Utility (In thousands)   $ 1,486     $ 1,987
     Earnings Per Share from Regulated Electric Utilities     $  0.88     $  1.18

Regulated Operating Revenues

Consolidated revenues (in thousands of dollars) and Megawatt Hours ("MWH") for
the quarters ended March 31, 2009, and 2008, are as follows:


                                                 2009                       2008
                                        Dollars         MWH        Dollars         MWH
    Residential                         $  4,474        53,855     $  4,345        51,422
    Large Commercial                         816        30,180        1,347        38,004
    Medium Commercial                      1,743        25,081        1,854        26,346
    Small Commercial                       2,492        26,359        2,488        25,929
    Other Retail                             226           852          233           850

    Total Regulated Retail                 9,751       136,327       10,267       142,551

    Other Regulated Operating Revenue        368                        634

    Total Regulated Revenue             $ 10,119                   $ 10,901

MPS residential customer revenue volume increased 2,433 MWH or 4.7% from the first quarter of 2008 to the first quarter of 2009. Due to colder weather in January, heating degree days for the quarter are up slightly, approximately 22 heating degree days or 0.5%. Also, the number of customers using electric heat increased year-over-year, requiring an additional 351 MWH in the first quarter of 2009 compared to the first quarter of 2008. These volume increases resulted in $206,000 more revenue, while a decrease in average rates reduced revenue approximately $77,000.

Revenue from our large commercial customers continued to decline in the first quarter of 2009. The manufacturing of forest products, principally lumber, plywood, and oriented strand board, continue to be the dominant economic forces within MPS's service area. Plant shutdowns and slow economic growth in these industries have resulted in a 7,824 MWH or 20.6% reduction in sales volume. We are continuing our efforts with Aroostook Partnership for Progress, a public/private partnership, to encourage economic development. Further, under the most recent stranded cost filing, MPUC Docket No. 2006-506, MPS is required to reconcile actual sales volume to expected sales volume, to ensure we do not over- or under-earn on stranded cost rate base due to fluctuations in volume. This annual adjustment, recorded in December, will partly mitigate the large commercial customer revenue shortfall.

Medium commercial customers also reduced their volume in the first quarter of 2009 compared to the same period of 2008. This 1,265 MWH or 4.8% decrease is attributable to a combination of fewer customers and lower use by the remaining customers, and resulted in $111,000 less revenue year-over-year.

Small commercial customers increased their electricity use slightly, up 430 MWH or 1.7%, but also experienced a decrease in average rates, resulting in revenue remaining consistent with the prior year. Other retail revenue was also essentially flat, at $226,000 in first quarter of 2009, compared to $233,000 for the first quarter of 2008.

Other regulated operating revenue is down $266,000 in the first three months of 2009 compared to the same period of 2008. Transmission wheeling revenue decreased $155,000, due to the reduction in rates effective July 1, 2008. MPS's transmission rates are based on the Company's revenue requirement (transmission expenses plus the allowed return on assets) less the wheeling revenue earned. The rates go into effect on July 1 each year, and are calculated from the financial results of the previous calendar year. Higher wheeling volume in 2007 resulted in the reduction in rates effective July 1, 2008.

Other regulated operating revenue was also reduced by approximately $52,000 due to less miscellaneous service revenue, and by $43,000 for unbilled revenue. The remaining decrease is due to other smaller changes in other operating revenues.

For more information on the status of the most recent rate filings, see Part II, Item 1, "Legal Proceedings."

Regulated Utility Expenses

For the quarters ended March 31, 2009, and 2008, regulated operation and
maintenance expenses are as follows:


          (In thousands of dollars)                       2009        2008
          Regulated Operation and Maintenance
            Labor                                        $ 1,207     $ 1,160
            Benefits                                         398         395
            Outside Services                                 301         261
            Holding Company Management Costs                 295         275
            Insurance                                        127         131
            Regulatory Expenses                              311         311
            Transportation                                   189         241
            Maintenance                                      144         149
            Rent                                             429          12
            Other                                            387         402
             Total Regulated Operation and Maintenance   $ 3,788     $ 3,337

Regulated operation and maintenance expense increased approximately $451,000 or 14% from the first quarter of 2008 to the first quarter of 2009. The $417,000 increase in rent expenses represented the majority of the increase. This change was due to higher rent expense from the reclassification of depreciation and amortization of leased assets described more fully in Note 9.

Labor and benefits also increased $50,000, or 3% year-over-year, due to normal pay increases and an increase in the number of employees, partly offset by an increase in capitalized labor. Outside services are up approximately $40,000, primarily due to an expansion of MPS's tree trimming program in response to a vegetation management study performed in 2008.

The remainder of the increase in expense is due to other smaller changes in various expense categories.

Stranded cost expenses of the regulated utility are as follows:

                                               Quarters Ended March 31,
           (In thousands of dollars)            2009               2008
           Stranded Costs
             Maine Yankee                   $         69       $        588
             Seabrook                                384                384
             Deferred Fuel                         2,115              1,560
             Cost Incentive Refund                    62                 62
             Cancelled Transmission Plant              -                 64
             Special Discounts                        70                 70
              Total Stranded Costs          $      2,700       $      2,728

The stranded cost expenses presented above for both 2009 and 2008 reflect the impact of MPS's most recent stranded cost rate case, MPUC Docket No. 2006-506. The amortization amounts for the rest of 2009 are expected to remain consistent with the first quarter. 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.

Unregulated Utility Services

Unregulated Utility Services is comprised of the operations of MAM USG.


                                                         Quarters Ended March 31,
                                                        2009                  2008
Revenue                                            $           194       $         1,296
Direct Expenses                                                134                 1,118
Gross Profit                                                    60                   178
Other (Expenses) Income                                        (58 )                   3
Common Corporate Costs and Facilities Charges                  (23 )                 (22 )
Income Tax Benefit (Provision)                                   8                   (64 )
  Net (Loss) Income - Unregulated Utility
Services                                           $           (13 )     $            95

  (Loss) Earnings Per Share from Unregulated
Utility Services                                   $         (0.01 )     $          0.06

MAM USG incurred a loss of $13,000 for the first quarter of 2009, compared to income of $95,000 for the first quarter of 2008. In 2008, MAM USG was performing work on two significant wind farm projects outside of MPS's service territory, as well as other smaller projects. In 2009, such development activity has slowed. As noted in MAM's 2008 Form 10-K, MAM USG has hired a new General Manager, and continues to seek opportunities to provide its electrical contracting, engineering, planning, procurement and project management services to developers, generators and others in both the private and public sectors.

Other Continuing Operations


                                                               Quarters Ended
                                                                  March 31,
                                                              2009        2008
     Net Loss - Other Continuing Operations (in thousands)   $   (67 )   $  (107 )
     Loss Per Share from Other Continuing Operations         $ (0.04 )   $ (0.06 )

Other continuing operations are the common costs of MAM that cannot be allocated to MPS or MAM USG, the corporate costs of MAM directly associated with the former unregulated businesses and intercompany eliminations. The net loss from this segment is $40,000 less in the first quarter of 2009 than 2008, due to a reduction in interest expense, from $54,000 in 2008 to $11,000 in 2009. This reduction is a combination of the repayment of debt during 2008 and into 2009, and lower interest rates on MAM's variable rate debt.

Interest Expense

Interest charges decreased from $253,000 in the first quarter of 2008 to $120,000 in the first quarter of 2009. The decrease is primarily due to lower debt balances, with $3.4 million of short- and long-term debt and capital lease obligations repaid in the first quarter of 2009, in addition to the $6.9 million repaid during 2008. Also, interest rates have decreased on MAM and MPS's variable rate debt.

Income Tax Expense / Benefit

The regulated provision for income taxes decreased $391,000 from 2008 to 2009, due to the decrease in net income at MPS. The decrease in revenue of $789,000 resulted in a $316,000 reduction in income tax expense, with the remainder of the reduction due to higher expenses.

The benefit of income taxes for unregulated continuing operations increased from $2,000 in the first quarter of 2008 to $52,000 in the first quarter of 2009. The increase is a result of the reduction in income from MAM USG.

Taxes Other Than Income

Taxes other than income are primarily payroll and property taxes. These taxes decreased $3,000 from prior year to $451,000 for the quarter ended March 31, 2009.

Off-Balance Sheet Arrangements and Financial Information System Hosting Agreement

Please refer to Note 8 of the financial statements.

Liquidity and Capital Resources

MAM continued to improve its liquidity position in the quarter ended March 31, 2009. We have paid down approximately $3.4 million of debt during the first three months of 2009. Our cash flow from operating activities also remains strong as we continue through the stranded cost free cash flow period. The increased cash flow allowed for the return of our quarterly dividend, with dividends of $0.05 per share paid in January and April 2009.

The Company's cash and cash equivalents as of March 31, 2009, were $793,000, down $1.1 million from $1.8 million at December 31, 2008. 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 quarter of 2009 was $5.5 million, compared to $5.7 million in the first quarter of 2008. The decrease in net income of $560,000 from the first quarter of 2008 to the first quarter of 2009 and the changes in deferred income taxes were the largest factors in the decrease in operating cash flow period-over-period. In the first quarter of 2008, the Company had a net operating loss carryforward available to reduce its income tax payment obligations. With the use of the net operating loss carryforward in 2008, MAM's cash income tax payments have increased from $16,000 in the first quarter of 2008 to $1.1 million in the first quarter of 2009, due to the stranded cost free cash flow. The largest increase in operating cash flows is $2.4 million in accounts receivable and unbilled revenue from the utility, due to the collection of receivables at MAM USG during 2008, and the reduced activity in this segment in 2009.

Cash flow used for investing activities in the first quarter of 2009 was $3.2 million. Investments in fixed assets were $2.2 million, and restricted investments increased $849,000 due to the transfer of cash received from the reduction of Me&NB's stated capital to the first mortgage bond trustee. The January dividend payment of $84,000 was the remaining use of investing cash. Cash flow provided by investing activities for the first quarter of 2008 was $329,000, largely as a result of the change in restricted investments which provided cash flows from the capital reserve account upon final payment of the 1998 FAME Notes obligation. This source of cash was offset by investments in fixed assets of $1.9 million

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 ability to make dividend payments to MAM. As of March 31, 2009, MPS is in compliance with these conditions.

As part of the refinancing of short-term borrowings during 2005 and continuing under the revised terms in May of 2008, MAM and MPS agreed to certain financial and other covenants, such as debt service coverage and earnings before interest and taxes ratios. In the event of a default, the various lenders could require immediate repayment of the debt. A default could also trigger increases in interest rates, difficulty obtaining other sources of financings and cross-default provisions within the debt agreements. MAM USG also has similar provisions under its one-year line of credit agreement. MAM, MPS and MAM USG are in compliance with all debt covenants as of March 31, 2009.

Regulatory Proceedings

For regulatory proceedings, see Part II, Item 1, "Legal Proceedings," which is incorporated in this section by this reference.