8-K

SECURITIES AND EXCHANGE COMMISSION

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 (date of earliest event reported) December 5, 2002

      CENTRAL VERMONT PUBLIC SERVICE CORPORATION      
(Exact name of registrant as specified in its charter)

               Vermont                
(State of other jurisdiction
of incorporation)             1-8222              
(Commission
File Number)           03-0111290         
(IRS Employer
Identification No.)

       77 Grove Street, Rutland, Vermont               05701       

(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code (802) 773-2711

                                      N/A                                      
(Former name or former address, if changed since last report)

Item 5.   Other Events.

Connecticut Valley Electric Company Inc. ("Connecticut Valley"), a wholly-owned subsidiary of Central Vermont Public Service Corporation (the "Company"), serves approximately 10,000 customers in the State of New Hampshire. In recent years, Connecticut Valley has been involved in certain disputes and litigation involving electric industry restructuring, power supply from the Company, and a power purchase contract with Wheelabrator, an independent power producer. See Note 5 to the Consolidated Financial Statements included in the Company's Form 10-Q for the period ended September 30, 2002, for additional information related to: New Hampshire Retail Rate/Federal court Proceedings; FERC Proceedings; and Wheelabrator Power Contract.

Ending years of litigation, Connecticut Valley, the State of New Hampshire, the City of Claremont and Public Service of New Hampshire ("PSNH") today announced agreements for the sale of Connecticut Valley to PSNH, New Hampshire's largest electric utility. A copy of each of the term sheets among Connecticut Valley, the Company, and the parties, and among PSNH, Connecticut Valley and the Company, are provided with this filing.

The sale agreement is the result of months of negotiations among Connecticut Valley, the Company, PSNH, the Governor's Office of Energy and Community Services, staff of the New Hampshire Public Utilities Commission, the Office of Consumer Advocate, the City of Claremont and New Hampshire Legal Assistance. The sale agreement resolves all issues in litigation over New Hampshire's restructuring plan, Connecticut Valley's rates, and the recovery of stranded costs, and renders moot a pending exit fee decision by the Federal Energy Regulatory Commission ("FERC").

Under the terms of the sale agreement, PSNH will pay the Company the book value for Connecticut Valley's franchise utility assets, which approximates $8 million. Contemporaneously with the sale, PSNH will pay an additional $21 million to the Company as a stranded cost reimbursement for the power resources the Company acquired to serve Connecticut Valley's customers.

Connecticut Valley residential customers' rates will be reduced by approximately 15 percent. PSNH will acquire Connecticut Valley's poles, wires, substations and other facilities, as well as several independent power obligations, including the Wheelabrator contract. A number of CVPS employees are anticipated to become PSNH employees, to continue to serve the former Connecticut Valley territory.

Connecticut Valley customers currently enrolled in electronic payment, electric assistance and budget programs will be automatically enrolled in PSNH's equivalent programs. Connecticut Valley serves approximately 10,000 customers, while PSNH serves more than 430,000 customers.

Absent the sale, if the Company was unable to obtain approval by the FERC of an exit fee from its power supply arrangement and Connecticut Valley was forced to terminate its relationship as a wholesale customer of the Company, it is possible that the Company would be required to recognize a pre-tax loss under the power supply arrangement totaling approximately $32.9 million as of December 31, 2003. The Company would also be required to write-off approximately $0.7 million pre-tax of regulatory assets associated with its wholesale business as of December 31, 2003. The sale agreement resolves these issues. The sale will likely result in a gain or loss; however, the nature and size of such gain or loss will be highly dependent upon power market price forecasts at the time of the sale and mitigation efforts both before and after the sale. Accordingly, the Company cannot predict at this time such gain or loss.

The FERC, the NHPUC and Securities and Exchange Commission must approve the sale. In addition, as a condition to the sale, the NHPUC must approve the pending settlement in the Wheelabrator docket. The closing is expected to take place late in 2003, with an effective date of January 1, 2004.

If the sale transaction does not close, and if there is an adverse resolution of the pending FERC exit fee proceeding, these events would have a material adverse effect on the Company's results of operations, financial condition and cash flows. However, the Company cannot predict the ultimate outcome of this matter.

Forward-Looking Statements Statements contained in this report that are not historical fact are forward-looking statements intended to qualify for the safe-harbors from liability established by the Private Securities Reform Act of 1995. Statements made that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CENTRAL VERMONT PUBLIC SERVICE CORPORATION
By	/s/  Joseph M. Kraus                                Joseph M. Kraus, Senior Vice President Customer Service, Corporate Secretary, and General Counsel

December 5, 2002

Exhibit Index
Exhibit Number	Exhibit Title
99.1	Term Sheet by and between Public Service Company of New Hampshire and Central Vermont Public Service Corporation/Connecticut Valley Electric Company Inc.
99.2	Term Sheet New Hampshire Parties and CVEC and CVPS

EX-99

Exhibit 99.1

CONNECTICUT VALLEY ELECTRIC COMPANY RESTRUCTURING

Term Sheet
by and between
Public Service Company of New Hampshire
and
Central Vermont Public Service Corporation/Connecticut Valley Electric Company Inc.

This Term Sheet, dated November 27, 2002, is entered into by the above-named Parties as one part of a series of negotiations intended to result in a comprehensive settlement of issues related to the restructuring of Connecticut Valley Electric Company. The Parties agree to negotiate in good faith to finalize a final settlement agreement that is based upon and incorporates the terms set forth herein. The provisions contained herein are subject to change based upon review and analysis of information requested by PSNH, as well as adjustments required by PSNH and CVEC/CVPS to effectuate beneficial tax treatment of this transaction.

1.        PSNH shall purchase substantially all of CVEC's New Hampshire electric business. The franchises held by CVEC shall be transferred to PSNH, as well as substantially all of CVEC's real, personal and intangible property. These assets will be described in detail in an exhibit to the P&S Agreement. Such assets will be purchased at their net book value, adjusted for accrued depreciation, as of the date of closing. In addition, certain property of CVPS, such as meter reading vehicles and line construction trucks, may be purchased by PSNH at their fair market value. Such property to be purchased from CVPS will be described in detail in an exhibit to the P&S Agreement.

2.        Power Purchase Obligations

        a. As of the date of closing, PSNH shall assume and be obligated to pay for any power purchase obligations of CVEC or CVPS for the following Qualifying Facilities:

• NH/VT Refuse Facility (Wheelabrator)
• Pettyboro
• Bath Electric
• Celly Mills
• Eastman Brook

        b. CVPS shall retain the obligation to purchase the output of the following facilities pursuant to the terms and conditions of their respective existing contracts:

• Lafayette Street Hydro
• Lower Valley
• Sweetwater Hydro
• Woodsville Hydro

        c. Subject to adjustments required by PSNH and CVEC/CVPS to effectuate beneficial tax treatment of this transaction, the existing RS-2 wholesale power contract between CVPS and CVEC shall be assigned to PSNH effective as of closing. This contract shall then be immediately terminated. Simultaneous with the contract termination, PSNH shall make a termination payment to CVPS as agreed upon by the State/CVPS which shall equal the sum of:

• the stranded cost reimbursement. The stranded cost reimbursement will be adjusted upwards or downwards based upon the actual date of closing;
• the restructuring reimbursement of $200,000;
• the FAS 109-related reimbursement agreed upon by the State/CVPS. This payment shall be reconciled as of the date of closing; and
• amounts necessary to be made whole for reconciliation of CVEC balances as of the date of closing for its Tiered Discount Program, PPCA, FAC, BPTAP, C&LMPA, and any other similar charges.

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3.        Delivery Points and Transmission Service

        a. On and after closing of the transaction, PSNH will be responsible for all costs incurred by the transmission providers for the transmission power to PSNH to serve the former CVEC load through rates approved by the applicable regulatory agency.

• PSNH will pay for NEPOOL Regional Network Service (RNS), either by way of the VELCO Open Access Tariff or the NU Open Access Tariff according to the terms of the NEPOOL Open Access Tariff. (Delivery Service A in Table 3(b))
• PSNH will directly take Local Network Service (LNS) by way of the VELCO Open Access Tariff. (Delivery Service B in Table 3(b))
• PSNH will take Network Service by way of the CVPS Open Access Transmission Tariff for transmission service (Delivery Service C in Table 3(b)) and will take distribution service for an allocated portion of specific distribution facilities by way of the CVPS Open Access Tariff. (Delivery Service D in Table 3(b))
• PSNH shall be responsible for provision of delivery service and billing to the New Hampshire Electric Cooperative (NHEC) for use of the PSNH system.
• Woodsville Fire District Water and Light Department (Woodsville) will continue to be served by CVPS including service over the former CVEC transmission line transferred to CVPS.

        b. The points of delivery shall be as follows:

INTERCONNECT POINT	VERMONT SOURCE	NEW HAMPSHIRE DELIVERY POINT	VOLTAGE (kV)	NHEC CONNECTION	GEN. (see below)	DELIVERY SERVICES
1	Ely	Orford	12.5			A, B, C, D
2	Bradford	Piermont	12.5		*	A, B, C, D
3	Wells River	Bath	12.5			A, B, C, D
4	Newbury	Haverhill	12.5	X	**	A, B, C, D
5	Thetford	Lyme	12.5	X		A, B, C, D
6	Windsor	Cornish	12.5	X		A, B, C, D
7	Ascutney	Lafayette St.	46		***	A, B, C
8	Ascutney	Maple Ave.	46			A, B, C
9	Ascutney (Inactive)	Claremont Foundry (Joy)	46			A, B, C
10	Ascutney	River Rd. (Temple Eastex)	46	X		A, B, C
11	Ascutney	Coy (Sweetwater Hydro)	46		****	A, B, C
12	Ascutney	Grissom River (Sullivan)	46			A, B, C
13	Ascutney	Wheelabrator (NH/VT Solid Waste)	46		*****	A, B, C
Generators * Celly Mills, Eastman Brook ** Bath Electric, Pettyboro, Woodsville Hydro *** Lafayette St. Hydro (Lower Village Hydro),        Lower Valley **** Sweetwater Hydro ***** Wheelabrator (NH/VT Solid Waste)			Delivery Services Required VELCO as agent for ISO-NE RNS service (69 kV, 115 kV, 230 kV, and 345 kV facilities). VELCO LNS service (mostly 115 kV). CVPS Network Service (34.5 kV, 46 kV, 69 kV, and 115 kV). Includes certain allocated charges from National Grid for network service. CVPS distribution delivery facility charge (local distribution 12.5 kV).

        c. CVPS and PSNH shall cooperate to establish clearly defined demarcations of ownership at each delivery point. It is agreed that the 12 kV delivery point demarcation (see table 3(b)) is at the Vermont-New Hampshire border (west side of Connecticut River). In addition, 46kV delivery points (Interconnection Points 8 through 13 in table 3(b)) are at each radial 46kV tap on the CVPS 46 kV facilities from Bellows Falls to Windsor, Vermont. The Lafayette Street delivery point (Interconnection Point 7 in table 3(b)) shall be on the load side of switch 406 and 389, subject to site review.

        d. CVPS shall have the right to revise the transmission service and the terms and conditions thereof from time to time in accordance with the provisions of Section 205 of the Federal Power Act and PSNH shall have the right to seek remedies or modification under Section 206 of the Federal Power Act.

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        e. If PSNH terminates delivery at any delivery point described in table 3(b), PSNH will provide one-year advance notification to CVPS, and the Parties shall negotiate termination compensation as necessary.

        f. PSNH and CVPS shall cooperate in establishing metering at each interconnection point sufficient to allow accurate billing of transmission services listed in section 3(a) and 3(b) above and to accurately report hourly load information to VELCO and the Independent System Operator New England, or successor organization, as required for regional energy markets. CVPS will own and maintain all delivery point metering providing service to the thirteen PSNH delivery points. PSNH will own and maintain all delivery point metering providing service to the four NHEC delivery points and metering for all generation to be purchased by PSNH. CVPS and PSNH will share access to meter information as required by each company.

        g. PSNH shall continue to deliver power to CVPS from the IPP's denoted below at no charge to CVPS through the remaining term of CVPS's current power purchase obligations: Lafayette Street Hydro, Lower Valley, Sweetwater Hydro, and Woodsville Hydro.

        h. An operating agreement between CVPS and PSNH will be required for the safe, economical, and reliable operation and maintenance of the respective electric systems. The Parties will negotiate land rights, easements and licenses required for such operation and maintenance of the electric systems.

4.        Customer Transition

        a. At least 60 days prior to closing, CVEC will provide to PSNH sufficient data for PSNH to prepare its systems to receive CVEC customers including but not limited to service addresses, meter information, meter reading routes, circuit information, etc. The data to be transferred will be mutually agreed upon between CVEC and PSNH and will be transferred in a format and manner also to be mutually agreed upon.

        b. On the closing date, CVEC will prepare a computer file in a format to be mutually agreed upon by PSNH and CVEC that contains the specific customer data on all parties who are active CVEC customers. If a customer is enrolled in a CVEC program where PSNH offers an equivalent program, the file will contain sufficient information to allow PSNH to enroll the customer in the PSNH program on initiation of their PSNH account. Examples would be PSNH's Level Payment Program, the statewide Electric Assistance Program, LIHEAP, etc.

        c. The CVEC customer meters will be read by PSNH using CVPS-supplied hand-held meter reading recording devices on their regularly scheduled cycle meter read date after closing. CVEC will prorate the difference between the meter reading obtained after the closing and the customer's prior meter reading based solely on the number of days during the reading period that occurred before and after the closing date. CVEC will on a daily basis transfer to PSNH in a format and method to be mutually agreed upon, the prorated meter reading which CVEC calculated attributable to the closing date and the reading obtained on the cycle read date. For customers with demand billing, CVEC and PSNH agree to use best efforts to obtain actual meter readings as of the day of closing. At least the 100 largest demand customers will be read on the closing date. For CVEC accounts that have interval metering, CVEC will transfer the detailed 15 minute interval data recorded on or a fter the closing date to PSNH for use in preparing the PSNH billing for the period after the closing date. CVEC will use the prorated meter reading difference attributable to the period prior to the closing to prepare a final bill for the customer. CVEC will use their normal final billing protocols to prepare the final bill including the crediting of deposits and accrued interest to the customers accounts. PSNH will use the closing date and cycle read date readings to generate billings to the customers for such initial bill period.

        d. CVEC will continue to own all accounts receivable generated prior to the closing and pursue collection of such receivables in the normal course for "final billed" customers. Any deposits and interest remaining after successful collection of any outstanding accounts receivable will be refunded under current NHPUC regulations.

        e. CVEC will retain all inactive accounts receivable.

        f. CVPS, or its appropriate affiliate, will retain the water heater rental program currently available to CVEC customers through CVPS's unregulated subsidiary Smart Energy and will generate their own billings for that program after the closing date.

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        g. On the closing date, CVEC will also transfer to PSNH in a format and manner to be mutually agreed upon all service orders with effective dates after the closing date. CVEC will continue to pursue the finalization of service orders commenced prior to the closing date and send the results to PSNH in a format and method to be mutually agreed upon as they are finalized by CVEC.

        h. CVPS will cooperate with PSNH to provide metering equipment and spares at fair market value following closing as requested by PSNH.

5.        Employee Protections

        PSNH will offer qualified CVPS employees who are designated by CVPS and who are working in the CVEC franchise area at the time of closing similar positions with PSNH, which positions, if represented, will be covered under the terms and conditions of the collective bargaining agreement then in effect between PSNH and IBEW Local 1837. Such designated employees who are not represented by a union will be offered similar positions with PSNH. These designated employees (both represented and non-represented) will be eligible to participate in the same employee benefits (health, life insurance, disability, 401(k), vacation, holiday, pension and post-retirement health and life insurance, etc.) that are made available to, and under the same terms and conditions as, PSNH employees generally. Specific details relating to the merging, bridging and/or offsetting of benefits and service will be provided once all of the benefit plan and other related information specifie d in the data requests have been received and fully reviewed.

6.        Taxes

        a. Property taxes and any similar assessments related to the assets to be purchased shall be prorated between the parties as of the date of closing.

        b. Conveyance taxes shall be shared equally by the parties.

7.        Approvals

        a. This transaction is conditioned upon receipt of necessary regulatory approvals. Such approvals must be unconditional or with conditions acceptable to the parties in their sole discretion, and must include approval of PSNH's methodologies for full recovery of the costs of this transaction and payment of the amounts contemplated herein to CVPS. Regulatory agencies from which approvals may be required include, but are not limited to:

i. NHPUC

ii. FERC

iii. SEC

        b. This transaction is conditioned upon receipt by PSNH and CVEC/CVPS of necessary lender consents.

        c. This transaction is conditioned upon approval to the extent necessary by the Boards of NU, PSNH, CVPS, and CVEC.

8.        Closing

        Closing shall take place at a mutually acceptable time and place as necessary to ensure an effective date of the transaction of January 1, 2004, or such other date as adjusted by mechanisms agreed to by the Parties hereto and the State Parties in the other related term sheets. At closing, CVPS shall present PSNH with all bills of sale, assignments, deeds, assignments customer lists, service records, maps, diagrams, equipment records, inventory accounts, etc., in its or CVEC's possession reasonably necessary for the operation and maintenance of the CVEC system by PSNH or for the billing and management of CVEC's customer accounts by PSNH.

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9.        Indemnification and Hold Harmless

        a. PSNH shall not be liable for injury or damages to person (including death) or property or any claims, demands, causes of action and contentions which the New Hampshire Department of Environmental Services ("NHDES"), the United States Environmental Protection Agency ("USEPA"), any other governmental entity or potentially responsible party ("PRP") or other person has or might have against PSNH, its respective successors, affiliates, parents, subsidiaries, and assigns (collectively, the "PSNH Entities"), on account of, with respect to, or in any way connected with or arising solely out of from or in connection with CVPS's, its agents', employees', customers', subcontractors' or invitees' use of the Property prior to Closing or otherwise occurring within the Property prior to Closing, including, without limitation, study costs, remediation costs, response costs, governmental over sight costs, contribution costs, costs of operation and maintenance of any remedy, damages, or attorneys' fees taken at or in respect of the Property under applicable Federal or State statutory or common law including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq. ("CERCLA" or "Superfund"), the New Hampshire Hazardous Waste Clean-Up Fund, R.S.A. 147-B (the "NH Hazardous Waste Act"), as amended, or any successor statutes thereto (together, the "Pre-Closing Covered Claims"). To the maximum extent this agreement may be made effective according to law, CVPS agrees to defend, indemnify and save harmless the PSNH Entities from and against the Pre-Closing Covered Claims.

        b. In like manner CVPS shall not be liable for injury or damages to person (including death) or property or any claims, demands, causes of action and contentions which the NHDES , the USEPA, any other governmental entity or PRP or other person has or might have against CVPS, its respective successors, affiliates, parents, subsidiaries, and assigns (collectively, the "CVPS Entities"), on account of, with respect to, or in any way connected with or arising solely out of from or in connection with PSNH's, its agents', employees', customers', subcontractors' or invitees' use of the Property following Closing or otherwise occurring within the Property following Closing, including study costs, remediation costs, response costs, governmental oversight costs, contribution costs, costs of operation and maintenance of any remedy, damages, or attorneys' fees taken at or in respect of the Property under applicable Federal or State statutory or common law including , without limitation, CERCLA, the NH Hazardous Waste Act, as amended, or any successor statutes thereto (together, the "Post-Closing Covered Claims"). To the maximum extent this agreement may be made effective according to law, PSNH agrees to defend, indemnify and save harmless the CVPS Entities from and against the Post-Closing Covered Claims.

10.        Post Closing

        The parties agree to cooperate with each other post-closing to provide assistance concerning the provision of electric service to CVEC's customers and evidence and testimony as necessary before regulatory, administrative and judicial bodies as may reasonably be necessary and requested by PSNH for a period of two (2) years from date of closing. PSNH shall be responsible for reimbursing CVPS for all costs, including legal fees, associated with these matters.

11.        The Preservation of Business

        CVPS agrees to continue to operate CVEC's business in accordance with customary utility practice through the date of closing, including the preservation of franchises, licenses, property rights, insurance, etc.

12.        Access to Property

        CVPS shall cooperate with PSNH through the date of closing to allow PSNH to have access at mutually agreeable and reasonable times during normal business hours to CVEC facilities, books and records to make such investigations as PSNH deems necessary. PSNH will perform any such investigations, and shall keep information received during such investigations confidential to the extent set forth in the confidentiality agreement that is a part of this transaction.

13.        Choice of Law

        New Hampshire law shall govern this transaction.

14.        Legislation

        Should changes in New Hampshire law be required to implement the provision of this term sheet, CVPS and PSNH shall use their best efforts to effect such changes.

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15.        Termination

        Termination by mutual consent is permitted and termination without cause is actionable. In the event that all the approvals are not obtained by June 30, 2004, this agreement and the transaction contemplated herein shall terminate.

16.        Breach

        Damages for claims of breach of contract shall be limited to direct costs related to the breach and shall not include consequential damages.

17.        Dispute Resolution

        In the event that it becomes necessary, the parties agree to pursue resolution first through mediation and share the cost of a mutually acceptable mediator. If the parties are unable to resolve the issues through mediation within a reasonable period of time, the parties will jointly select an arbitrator or panel of arbitrators to resolve the matter through binding arbitration.

18.        Contingency

        The Parties understand and agree that the agreement set forth in this Term Sheet is contingent upon PSNH, CVEC and the State Parties entering into and closing on transactions related to this transaction and necessary to its resolution.

PUBLIC SERVICE CO. OF NEW HAMPSHIRE By its President and Chief Operating Officer /s/ Gary A. Long                                      Gary A. Long	CENTRAL VERMONT PUBLIC SERVICE CORPORATION By its Senior Vice President Customer Services, Secretary, and General Counsel /s/ Joseph M. Kraus                                  Joseph M. Kraus
	CONNECTICUT VALLEY ELECTRIC COMPANY INC. By its Senior Vice President Customer Services, Secretary, and General Counsel /s/ Joseph M. Kraus                                  Joseph M. Kraus

EX-99

Exhibit 99.2
Connecticut Valley Electric Company Restructuring Settlement Term Sheet New Hampshire State Parties and CVEC and CVPS
1.	Sale of CVEC to PSNH: CVEC shall sell substantially all of its New Hampshire retail distribution franchise works to PSNH. The transaction shall be effective 1/1/04 under separate terms to be agreed to by PSNH, CVEC and CVPS. See Adjustment Mechanisms for dates other than 1/1/04.
2.	CVEC QF Purchases and Costs: PSNH shall assume responsibility for all CVEC (direct purchase) QF going forward costs as of 1/1/04 or other date of closing.
3.	RS-2 Stranded Costs Payment: The stranded cost payment from PSNH shall be $21M -- effectively 62% of FERC Initial Decision amount of $33.9M. Termination of RS-2 service and buyout payment shall be effective as of 1/1/04 or other closing date (Present Value of $21M as of 1/1/04 -- see Adjustment Mechanisms for dates other than 1/1/04.)
4.	Recovery of CVEC Restructuring Costs and Regulatory Assets shall include 12/31/03 balances or fixed amount as shown below in stranded cost buyout:
				DR 96-150 NH Restructuring                                        $200,000 Patch Case                                                                              $0 NH Unbundling                                                                       $0 SFAS 109                                              balances as of closing date
5.	Full Recovery/Return of Remaining CVEC balances as of 12/31/03 or closing date shall include: Tiered Discount Program PPCA FAC BPTAP CLMPA Wheelabrator litigation costs The parties agree that the Commission shall retain jurisdiction over the parties and this settlement agreement sufficient to verify and determine, via an audit within 45 days after closing, the accuracy of amounts of the expenditures and/or balances as appropriate to be included in the restructuring costs, regulatory assets and remaining CVEC balances referenced in Paragraphs 4 and 5 above. CVEC, CVPS and the Commission Staff shall work in good faith prior to closing to resolve any issues pertaining to the amounts to be audited and the procedures by which the audit shall be conducted. CVEC shall be permitted by the NHPUC to prorate its tariff rates over the number of days of service provided by it prior to closing for final month billing to its New Hampshire customers.
6.	Releases: Upon the closing of the sale of CVEC to PSNH and termination of the RS-2 power purchase, CVPS, CVEC and the NHPUC shall petition to dismiss with prejudice all litigation relating to any prior actions before the Federal Energy Regulatory Commission and the US District Court. Recognizing the extensive benefits provided herein to CVEC customers, this agreement is contingent upon the issuance of a final order in Docket DE 00-110 (re Wheelabrator) approving without change or condition the pending settlement filed therein, filed on April 29, 2002. The GOECS, NHLA and the City of Claremont, though not parties to Docket DE 00-110, hereby express their unqualified support in favor of that settlement, in conjunction with the additional benefits achieved in this present transaction. The litigation costs provided for in the Wheelabrator settlement, shall be submitted in CVEC's FAC/PPCA to be recovered by CVEC during 2003. Approval of this agreement and the transactions that are contemplated herein shall constitute full settlement by the State of New Hampshire of all rate and utility issues within the jurisdiction of the NHPUC concerning CVEC or CVPS as of the closing date (other than the reconciliation referenced in paragraph 5).
7.	Timing of Transactions: Closing of these transactions is scheduled to occur on January 1, 2004; provided however that any earlier closing may occur with the approval of all the parties; and it is further provided however that if the only reason that closing has not occurred is that all final regulatory approvals have not been received, this agreement shall extend to June 30, 2004. Subject to adjustments required by PSNH and CVEC/CVPS to effectuate beneficial tax treatment of this transaction, the existing RS-2 wholesale power contract between CVPS and CVEC shall be assigned to PSNH effective as of closing; provided however, such adjustment for such beneficial tax treatment shall not otherwise adversely affect New Hampshire ratepayers.
8.	Adjustment Mechanism:
		a.	Closing/RS-2 Terminations Dates Prior to January 1, 2004: Based on the Pro Forma Table attached to the Federal Energy Regulatory Commission's April 30, 2001 Initial Decision, the stranded cost component of the power provided under the RS-2 Rate Schedule is equal to $4,737,898 during 2003. For each month earlier than January 1, 2004, for which termination is advanced, adequate compensation is equal to 1/12th of this amount or $394,825 per month. This additional amount would be remitted by PSNH to CVPS in addition to a $21 million present value equivalent amount as of 1/1/04. (The utilities expect termination and closing to occur on the same month-ending day.) CVPS shall be compensated $120,000 per month in lieu of unrecovered fixed operating costs due to closing occurring prior to January 1, 2004. The total additional amount would be determined by the product of the number of months between such closing prior to January 1, 2004 times $120,000 per month and remitted by PSNH to CVPS in addition to the stranded cost buyout amounts detailed herein.
		b.	Closing/RS-2 Termination Dates After January 1, 2004: For each month that closing is delayed after January 1, 2004, CVPS shall decrease the $21 million present value equivalent at that time by $150,000 per month. PSNH shall remit the stranded cost buyout amounts detailed herein decreased by the sum of $150,000 times the number of full calendar months after January 1, 2004.
9.	This term sheet is conditional upon approvals by the CVPS and CVEC Boards of Directors.
10.	This term sheet is conditional upon approval of the Claremont New Hampshire City Council and the New Hampshire Office of the Consumer Advocate's Advisory Board.
11.	CVEC/CVPS' obligation to consummate this transaction is conditioned upon (a) receipt of unconditional approvals from the NHPUC, the FERC, the SEC, and all other regulatory agencies from which approvals are necessary, and (b) consent from all lenders which may be required under financing documents.
12.	Termination of Agreement: Termination by consent of all parties is permitted and termination without cause is actionable. In the event that all necessary approvals are not obtained by 6/30/04 this agreement shall terminate.
13.	The parties understand and agree that the agreement set forth in this term sheet is contingent upon PSNH, CVEC, CVPS and the State Parties entering into and closing on transactions related to this transaction and necessary to its resolution.
Dated as of this 26th day of November 2002
CVPS
By:                                                             Its					Date:
CVEC
By:                                                             Its					Date:
GOECS
By:                                                             Its					Date:
OCA
By:                                                             Its					Date:
City of Claremont New Hampshire
By:                                                             Its					Date:
NH Legal Assistance
By:                                                             Its					Date:
Staff of the NHPUC
By:                                                             Its					Date: