-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WmjUsTtMHcNkdRhQ4o44JZzbSotJ05CVJn0ZPcbkG92r5pCuT7eCgu6KjSBSoeyi kZVppPyY3x3BqHEt/LVL8A== 0000031224-96-000023.txt : 19960520 0000031224-96-000023.hdr.sgml : 19960520 ACCESSION NUMBER: 0000031224-96-000023 CONFORMED SUBMISSION TYPE: POS AMC PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960517 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EASTERN UTILITIES ASSOCIATES CENTRAL INDEX KEY: 0000031224 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 041271872 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: POS AMC SEC ACT: 1935 Act SEC FILE NUMBER: 070-08769 FILM NUMBER: 96569468 BUSINESS ADDRESS: STREET 1: ONE LIBERTY SQ STREET 2: P O BOX 2333 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173579590 POS AMC 1 DUKE LOUIS DREYFUS POST EFFECTIVE AMENDMENT #2 File No. 70-8769 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST EFFECTIVE AMENDMENT NO. 2 TO FORM U-1 APPLICATION-DECLARATION WITH RESPECT TO THE ACQUISITION OF A SUBSIDIARY IN CONNECTION WITH THE PROVISION OF POWER MARKETING AND OTHER SERVICES UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 EASTERN UTILITIES ASSOCIATES P.O. Box 2333, Boston, Massachusetts 02107 (Name of company filing this statement and address of principal executive office) EASTERN UTILITIES ASSOCIATES (Name of top registered holding company parent of applicant or declarant) CLIFFORD J. HEBERT, JR., TREASURER EASTERN UTILITIES ASSOCIATES P.O. Box 2333, BOSTON, MASSACHUSETTS 02107 (Name and address of agent for service) The Commission is requested to mail signed copies of all orders, notices and communications to: ARTHUR I. ANDERSON, P.C. McDermott, Will & Emery 75 State Street Boston, MA 02109 ITEM 2. FEES, COMMISSIONS, AND EXPENSES. The fees, Commissions and expenses of the Applicant expected to be paid or incurred, directly or indirectly, in connection with the transactions described are as follows: Fees of Company Counsel $ 7,500 ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS (* Filed herewith) (a) Exhibits. *D-1 Massachusetts Electric Company Retail Access Pilot Programs *D-2 MDPU Letter of Approval dated April 3, 1996. *D-3 NHPUC Order No. 22,033 Retail Competition Pilot Program Order Establishing Fund Guidelines and Requiring Compliance Filings. SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned Applicants have duly caused this statement to be signed on their behalf by the undersigned duly authorized individuals. EASTERN UTILITIES ASSOCIATES By: /s/ Clifford J. Hebert, Jr. Clifford J. Hebert, Jr. Treasurer Dated May 17, 1996 EX-99 2 EXHIBIT D-1 EXHIBIT D-1 RETAIL ACCESS PILOT PROGRAMS March 4, 1996 Submitted to: Massachusetts Department of Public Utilities Submitted by: Massachusetts Electric Company A New England Electric System Company ATTACHMENT 1 3/4/96 Massachusetts Electric Company Residential and Small Business Customers Choice: New England - Pilot Program Massachusetts Electric Company and its affiliates have developed a plan for providing all customers choice in their power supplier called Choice: New England. Choice: New England proposes that all customers have the option of choosing their electricity supplier beginning January 1, 1998. In the meantime, the pilot will test the potential for customers to lower their electricity bills in a competitive marketplace. It also will allow Massachusetts Electric to work out the logistical and administrative details of retail choice, such as metering and billing, before implementing choice on a state-wide scale. The pilot program for residential and small business customers will be administered with the following terms: 1. Participation: - Open to all residential R rate customers, and commercial/industrial G1 or G2 customers receiving electric service from Massachusetts Electric in the cities of Lawrence, Lynn, Northampton, and Worcester. - Total participation will initially be limited to 100 million kWh per year. 50 million kWh will be specifically set aside for residential customers. - MECo reserves the right to expand this program at a later date or conduct additional pilot programs. - If customers totaling more than 50 million kWh each for residential and business customers ask to participate, a lottery will be held to select participants. 2. Pilot Program Administration - Massachusetts Electric will hire an Administrator, who will be responsible for choosing the power supply options, and marketing and administering the program for customers. The Administrator will sign a contract including all the terms in this description, as well as provisions to protect customer information and confidentiality. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 2 - Massachusetts Electric will pay the Administrator a fixed fee plus a bonus for delivering 100% of the 50 million Kwh participation for the business portion and an incremental incentive for each residential customer who chooses to receive power through one of the supply options available. The total amount paid to the administrator will not exceed $75,000. This amount will be added to the generation price that customers pay. 3. Community Outreach - Massachusetts Electric will send an initial letter to all the approximately 140,000 eligible customers, directing them to mail a postage paid card back to the Administrator if interested. In this way, only customers who give permission for their names, addresses, phone numbers, and usage to be released will be given to the Administrator. - These cards also can be filled out and collected by community agencies including neighborhood centers, Community Development Corporations, local business associations, public government offices, etc., and be forwarded to the Administrator. Special efforts will be made to work with agencies who represent seniors, low income customers, customers who do not speak or read English, electric heat customers, locally owned businesses, etc. - Massachusetts Electric will meet initially with local community groups and officials to introduce the program and the Administrator. All further outreach and marketing activities will be conducted by the Administrator. - Massachusetts Electric promptly will refer any inquiries from interested customers it receives directly to the Administrator. 4. Start Date: - The latter of September 1, 1996, or receipt of all necessary regulatory approvals. - This program shall continue through December 31, 1997. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 3 - During the pilot, customers may opt to return to service under their previous bundled tariff. Once they return to bundled tariffs, they cannot rejoin the pilot. 5. Terms: Massachusetts Electric will provide participating customers access to alternative power suppliers on the terms specified in Choice: New England as modified below: - During the term of the pilot, customers will pay MECo for Transmission, Distribution, and Access at the prices specified in Attachments 1-5. - The prices for Transmission and Distribution specified in Attachments 1-5 are estimates of the unbundled prices for those services. While MECo's prices remain bundled, the prices specified in Attachment 1-5 shall increase or decrease in proportion to overall increases or decreases in the distribution portions of MECo's base rates approved from time-to-time by the DPU. 6. Power Supply: - The Administrator will solicit bids from alternative power supplies on behalf of the customers participating in the Pilot. The Administrator also will be responsible for community outreach and marketing the options to interested customers. - All bids received shall be made public. - All bids must specify a price or pricing schedule for all requirements, firm power delivered to NEP's system for an initial term of 12 months. After such initial term, power supplies for Pilot participation may be solicited for different durations, depending on the availability of direct access on terms and conditions approved by the DPU and FERC. - The pilot will not be renewed if direct access will be available to customers within a reasonable time period, as determined by Massachusetts Electric. - NEP specifically reserves the right to bid or not bid in any such solicitation. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 4 - Massachusetts Electric will assist the Administrator in the preparation of the initial power supply Request For Proposal. Massachusetts Electric will encourage the creation of several supply options for each customer class. - To facilitate the pilot program during the period direct access generally is not available to customers, NEP may enter into contracts with the winning bidder to buy and resell power to participating customers if it is not practicable to conduct such transactions under appropriate wheeling tariffs. - Among other things, the RFP will require that each winning bidder be a member of NEPOOL or, if not, have an agreement with a NEPOOL member to include the load served in the NEPOOL member's own-load dispatch. This will ensure that appropriate NEPOOL requirements are met and that if NEP does not bid or is not the winning bidder, it will be relieved of responsibility to meet the requirements of participating customers. 7. Metering/Billing/Customer Service - MECo will continue to provide distribution services, including DSM, to all customers participating in the Pilot Program on the same terms and conditions generally applicable to customers on their previous bundled tariff. - Detailed billing procedures will be developed to coordinate arrangements between MECo and the generation supplier. Among other things, these arrangements must address compensation for losses, cash working capital, and bad debts. - Customers will use existing meters for pilot participation unless they or their supplier elect to install, at their own expense, alternative meters acceptable to Massachusetts Electric. No new metering will be installed as part of the pilot. 8. Regulatory Approval: - Pilot program is subject to regulatory approval by the DPU and FERC. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 5 Attachment 1 - Rate: R1 Distribution Charges(1) Customer Charge (inc. ESC)(2) $6.63 per month Energy Charge $0.02294 per kWh DSM/Renewables(3) $0.00271 per Kwh Transmission Charge(1) Energy Charge $0.00408 per Kwh Access Charges Energy Charge $0.03044 per Kwh 1. To be superseded when unbundled rates are generally available. 2. Subject to adjustment based on base rate changes. 3. As approved by MDPU from time to time. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 6 Attachment 2 - Rate: R2 Distribution Charges(1) Customer Charge (inc. ECS)(2) $4.40 per month Energy Charge $0.01731 per Kwh DSM/Renewables(3) $0.00271 per Kwh Transmission Charges(1) Energy Charges $0.00308 per Kwh Access Charges Energy Charge: $0.02298 per Kwh 1. To be superseded when unbundled rates are generally available. 2. Subject to adjustment based on base rate changes. 3. As approved by MDPU from time to time. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 7 Attachment 3 - Rate: R4 Distribution Charges(1) Customer Charge (inc. ECS)(2) $21.33 per month Energy Charge $0.02429 per Kwh DSM/Renewables(3) $0.00271 per Kwh Transmission Charges(1) Energy Charges $0.00376 per Kwh Access Charges Energy Charge: $0.030000 per Kwh 1. To be superseded when unbundled rates are generally available. 2. Subject to adjustment based on base rate changes. 3. As approved by MDPU from time to time. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 8 Attachment 4 - Rate: G1 Distribution Charges(1) Customer Charge (inc. ECS)(2) $9.46 per month Unmetered Charge $7.20 per month Energy Charge $0.02573 per kWh DSM/Renewables(3) $0.00583 per kWh Transmission Charges(1) Energy Charges $0.00519 per kWh Access Charges Energy Charge $0.030000 per kWh 1. To be superseded when unbundled rates are generally available. 2. Subject to adjustment based on base rate changes. 3. As approved by MDPU from time to time. Massachusetts Electric Company Residential/Small Business Choice: New England Pilot March 4, 1996 Page 9 Attachment 5 - Rate: G2 Distribution Charges(1) Customer Charge (inc. ECS)(2) $17.14 per month Demand $6.33 per kWh-Mo. DSM/Renewables(3) $0.00281 per kWh Transmission Charges(1) Demand $1.48 per kWh-Mo. Access Charges Demand $2.25 per kWh-Mo. Energy $0.02288 per kWh 1. To be superseded when unbundled rates are generally available. 2. Subject to adjustment based on base rate changes. 3. As approved by MDPU from time to time. ATTACHMENT 2 February 14, 1996 Mr. Howard P. Foley President Massachusetts High Technology Council, Inc. Reservoir Place 1601 Trapelo Road Waltham, Massachusetts 02154 Re: Choice: New England -- Pilot Program Dear Mr. Foley: As you are aware, Massachusetts Electric Company and its affiliates have developed a plan for providing all customers true choice in their power supplier called Choice: New England. Although the schedule for implementation of the program is January 1, 1998, we are prepared to seek approval from the Department of Public Utilities (DPU) to implement pilot programs for representative groups of residential, small commercial, and high technology customers that could begin as soon as July 1, 1996. With respect to high technology customers, we are offering the Massachusetts High Technology Council (MHTC) members a pilot program on the following terms: 1. Participation: - Open to MHTC members currently served by MECo on rate G- 3. - MHTC members with more than one G-3 account can designate accounts to participate in the Pilot. All participating accounts shall be for all requirements service. - Total participation initially will be limited to 200 million kWh per year. - MECO reserves the right to expand this Pilot at a later date or conduct additional pilot programs. - Allocation of available kWh among MHTC members to be determined by MHTC. Mr. Howard P. Foley February 14, 1996 Page 2 2. Option to Improve Terms: - MECo agrees that, between the effective date of this Pilot and the time direct access is generally available under terms and conditions approved by the DPU and the Federal Energy Regulatory Commission (FERC), it will not offer any customer, either individually or as part of a group, direct access to alternative power suppliers on terms more favorable than those contained herein without first offering MHTC the opportunity to modify this Pilot to conform to the terms of such other offer. 3. Start Date: - The latter of July 1, 1996, or receipt of all necessary regulatory approvals. - This Pilot shall terminate when direct access is generally available to customers on terms and conditions approved by the DPU and FERC. - During the term of this Pilot, MHTC members may opt to return to service under MECO's G-3 rate, provided such is consistent with the terms of any power supply arrangement entered into by or on behalf of MHTC members. 4. Terms: - Massachusetts Electric will provide participating customers access to alternative power suppliers on the terms specified in Choice: New England as modified below: - During the term of the Pilot, customers will pay MECo for transmission, distribution, and access at the prices specified in Attachment 1. - The prices for transmission and distribution specified in Attachment 1 are estimates of the unbundled prices for those services. While MECo's prices remain bundled, the prices specified in Attachment 1 shall increase or decrease in proportion to overall increases or decreases in the distribution portion of MECO's G-3 base rate approved from time-to-time by the DPU. Mr. Howard P. Foley February 14, 1996 Page 3 - During the term of the Pilot, the access charges specified in Attachment 1 shall be fixed through December 31, 1998, thereafter they shall be adjusted annually in accordance with the terms of Choice: New England as proposed in MECo's February 16, 1996, filing with the DPU. 5. Rights Upon Termination: - At such time as direct access is generally available to customers on terms approved by the DPU and FERC, the Pilot shall terminate and the prices specified on Attachment 1 for transmission, distribution, and access shall be superseded in their entirety by the generally available prices for those services. 6. Power Supply: - MHTC will be required to solicit bids from alternative power suppliers on behalf of its members participating in the Pilot. - All bids received shall be made public. - All bids must specify a price for all requirements, firm power delivered to NEP's system for an initial period of 18 months. After such initial period, power supplies for Pilot participants may be solicited for different durations. - NEP specifically reserves the right to bid or not bid in any such solicitation. - MHTC shall select only one supplier in response to each solicitation conducted under the terms of this Pilot program. If any supplier selected by MHTC is unable to fulfill its obligations under a power supply agreement, MHTC shall have the right to select a replacement supplier. - NEP agrees to reimburse MHTC for reasonable costs incurred in connection with the development and initiation of the Pilot and preparation of the initial power supply RFP by an independent consultant. Mr. Howard P. Foley February 14, 1996 Page 4 - To facilitate the Pilot program, NEP may enter into contracts with the winning bidder to buy and resell power to participating customers if it is not practicable to conduct such transactions under appropriate wheeling tariffs. To the extent possible, any contract entered into by NEP in connection with this Pilot will be assigned to the MHTC and/or its participating members. - The terms of any RFP issued shall be subject to NEP's approval. Among other things, the RFP will require that the winning bidder be a member of NEPOOL or, if not, have an agreement with a NEPOOL member to include the load served in the NEPOOL member's own-load dispatch. This will ensure that appropriate NEPOOL requirements are met and that if NEP does not bid or is not the winning bidder, it will be relieved of responsibility to meet the requirements of participating customers. 7. Metering/Billing/Customer Service: - MECo will continue to provide distribution services, including DSM, to all customers participating in the Pilot program on the same terms and conditions generally applicable to G-3 customers. - Detailed billing procedures will be developed to coordinate arrangements between MECo and the generation supplier. Among other things, these arrangements must address compensation for losses, cash working capital, and bad debts. 8. Miscellaneous Provisions: - MECo agrees that MHTC members that have entered into Service Extension Discount agreements with the Company will be allowed to participate in the Pilot program. - During the term of the Pilot program, the restrictions contained in the Service Extension Discount agreements with respect to purchasing electricity from alternative suppliers shall be suspended for participating MHTC members. Upon a participant's election to end its participation in the Pilot, all obligations under the Service Extension Discount agreements shall be reinstated. MHTC members that participate in the Pilot for its full term shall be relieved of all obligations under Service Extension Discount agreements with MECo. Mr. Howard P. Foley February 14, 1996 Page 5 9. Regulatory Approval: - Pilot program is subject to regulatory approval by the DPU and FERC. If the terms outlined above are acceptable to you, please so indicate by countersigning a duplicate copy of this letter and returning it to me. Thank you for your corporation. I am looking forward to working with you on this exciting endeavor. Very truly yours, MASSACHUSETTS ELECTRIC COMPANY /s/ John H. Dickson John H. Dickson, President Agreed and Accepted: MASSACHUSETTS HIGH TECHNOLOGY COUNCIL, INC. /s/ Howard P. Foley, President Howard P. Foley, President Massachusetts High Technology Council, Inc. Attachment 1 Distribution Charges Customer Charge (inc. ECS)(1) $78.75 per month Demand(1) $3.71 per kW-Mo. DSM/Renewables(2) $.00483 per kWh Transmission Charges Demand(1) $1.75 per kW-Mo. Access Charges Demand $4.42 per kW-Mo. Energy $.01934 per kWh 1. Subject to adjustment based on base rate changes. 2. As approved by DPU from time to time. ATTACHMENT 3 04-Mar-96 MASSACHUSETTS ELECTRIC COMPANY
BASE CHARGE ECS EFF. BASE CHARGE ECS EFF. RATE BLOCKS @ W-95(S) CC FACTOR PRICE RATE BLOCKS @W-95(S) CC PRICE FACTOR R-5 Customer Charge $6.42 $0.21 $6.63 G-7 Customer Charges $16.93 $0.21 $17.14 Transmission Charge $0.00408 Demand Charges Access Charge $0.03044 $0.03044 Transmission Charge $1.48 $1.48 Distribution Charge $0.02294 $0.00271 $0.02565 Distribution Charge $6.33 $6.33 Interruptible Credit Access Charge $2.25 $2.25 IC-1 $0.78 $0.78 Energy Charges IC-2 $2.62 $2.62 Access $0.02288 $0.02288 Distribution Charge $0.00000 $0.00281 $0.00281 R-6 Customer Charge $4.19 $0.21 $4.40 G-8 Customer Charge (1) $78.54 $0.21 $78.75 Transmission Charge $0.00308 $0.00308 Demand Charges Access Charge $0.02298 $0.02298 Transmission Charge $1.75 $1.75 Distribution Charge $0.01731 $0.00271 $0.02002 Distribution Charge $3.71 $3.71 Interruptible Credit Access Charge $4.42 $4.42 IC-1 $0.78 $0.78 Energy Charges IC-2 $2.62 $2.62 Access Charge On-Peak $0.01934 $0.01934 Off-Peak $0.01934 $0.01934 R-7 Customer Charge $21.12 $0.021 $21.33 Distribution Charge $0.00483 $0.00483 Transmission Charge $0.00376 $0.00376 Access Charge On-Peak $0.03000 $0.03000 Off-Peak $0.03000 $0.03000 Distribution Charge $0.00271 $0.02700 G-6 Customer Charge $9.25 $0.21 $9.46 Unmetered Charge $7.20 $0.21 $7.41 Transmission Charge $0.00519 $0.00519 Access Charge $0.03000 $0.03000 Distribution Charge $0.02573 $0.00583 $0.03156 Notes: CC factors by rate class effective for usage on or after January 1, 1996 ECS factor per customer $0.21 Effective 7/01/95 Rate R-1/R-2/R-4 $0.00271 per kwh Rate G-1 $0.00583 per kwh Note: Rate G-2 $0.00281 per kwh 1/ Per Settlement Agreement with Mass High-Tech Council Rate G-3/G-5 $0.00483 per kwh
MASSACHUSETTS ELECTRIC COMPANY Effective Residential Regular R-5 Retail Wheeling Pilot Program Service M.D.P.U. No. 939 Adjusted By: Energy Conservation Service (ECS) Charge Adjustment for Cost of Conservation and Loan Management Monthly Charge as Adjusted Customer Charge $6.63 Access Charge per kWh 3.044 cents Transmission Service Charge per kWh 0.408 cents Distribution Service Charge per kWh 2.565 cents Interruptible Credits IC-1 $0.78 IC-2 $2.62 Minimum Charge The monthly Customer Charge. Other Rate Clauses apply as usual. M. D. P. U. No. 939 Sheet 1 MASSACHUSETTS ELECTRIC COMPANY RESIDENTIAL REGULAR R-5 RETAIL WHEELING PILOT PROGRAM SERVICE AVAILABILITY Electric delivery service under this rate is available for all domestic purposes in individual private dwelling or an individual apartment and for church and farm purposes. The Company may under unusual circumstances permit more than one set of living quarters to be served through one meter under this rate; but if so, the Customer Charge will be multiplied by the number of separate living quarters so served. A church and adjacent buildings owned and operated by the church may be served under this rate, but any such buildings separated by public ways must be billed separately. Customers whose average monthly usage for the previous 12 months exceeds 2500 KWH per month may elect delivery service on rate R-7, subject to the availability of the appropriate metering equipment. This rate is available only to participants of the Pilot program filed by the Company with the Department of Public Utilities on March 4, 1996, and service under this rate is subject to the terms and conditions of the Pilot program included in that filing. MONTHLY CHARGE The Monthly Charge will be the sum of the applicable Customer and kWh Charges, less the applicable Interruptible Credit, if any: Customer Charge $ 6.42 Access Charge per kWh 3.044 cents Transmission Service Charge per kWh 0.408 cents Distribution Service Charge per kWh 2.294 cents M. D. P. U. No. 939 Sheet 1 - Continued Interruptible Credits If the Customer has installed an electric water heater of a type approved by the Company, and permits the Company to control the operation of the water heater for the specified number of hours per day and during emergency situations, the Customer will receive the following credit each month: Control hrs. / day Credit IC-1 6 $0.78 IC-2 16 $2.62 M. D. P. U. No. 939 Sheet 2 MASSACHUSETTS ELECTRIC COMPANY RESIDENTIAL REGULAR R-5 RETAIL WHEELING PILOT PROGRAM SERVICE ADJUSTMENT FOR COST OF CONSERVATION AND LOAD MANAGEMENT The distribution service charge under this rate as set forth under "Monthly Charge" may be adjusted from time to time in the manner described in the Company's Conservation Cost Factor Provisions to reflect costs related to the Company's Conservation and Load Management Programs. MINIMUM CHARGE The monthly minimum charges shall be the monthly Customer Charge. BIMONTHLY BILLING The Company reserves the right to read meters and render bills on a bimonthly basis. When bills are rendered bimonthly, the Customer Charge, the Interruptible Credits, and the Minimum Charge shall be multiplied by two. TERMS AND CONDITIONS The Company's Terms and Conditions in effect from time to time where not inconsistent with any specific provisions hereof, are a part of this rate. Effective September 1, 1996 MASSACHUSETTS ELECTRIC COMPANY Effective Residential-Low Income R-6 Retail Wheeling Pilot Program Service M.D.P.U. No. 940 Adjusted By: Energy Conservation Service (ECS) Charge Adjustment for Cost of Conservation and Load Management Monthly Charges as Adjusted Customer Charge $4.40 Access Charge per kWh 2.298 cents Transmission Service Charge per kWh 0.308 cents Distribution Service Charge per kWh 2.002 cents Interruptible Credit IC-1 $0.78 IC-2 $2.62 Minimum Charge The monthly Customer Charge. Other Rate Clauses apply as usual. M. D. P. U. No. 940 Sheet 1 MASSACHUSETTS ELECTRIC COMPANY RESIDENTIAL-LOW INCOME R-6 RETAIL WHEELING PILOT PROGRAM SERVICE AVAILABILITY Electric delivery service under this rate is available only to currently qualified customers for all domestic purposes in an individual private dwelling or an individual apartment, providing such customer meets both of the following criteria: 1. Must be the head of a household or principal wage earner. 2. Must be presently receiving Supplemental Security Income from the Social Security Administration; one of the following from the Massachusetts' Department of Public Welfare: Medicaid, Food Stamps, General Relief, or Aid to Families with Dependent Children; Low Income Heating Energy Assistance Program (LIHEAP) from a certified Community Action Program Agency; or Veteran's Service Benefits (Chapter 115) from the Commonwealth of Massachusetts's Veteran Services Administration. It is the responsibility of the customer to annually certify, by forms provided by the utility, the continued compliance with the foregoing qualifications. The Company may under unusual circumstances permit more than one set of living quarters to be served through on meter under this rate, but if so, the Customer Charge shall be multiplied by the number of separate living quarters so served. This rate is available only to participants of the Pilot Program filed by the Company with the Department of Public Utilities on March 4, 1996, and service under this rate is subject to the terms and conditions of the Pilot program included in that filing. MONTHLY CHARGE The Monthly Charge will be the sum of the applicable Customer and kWh Charges, less the applicable Interruptible Credit, if any: Customer Charge $4.19 Access Charge per kWh 2.298 cents Transmission Service Charge per kWh 0.308 cents Distribution Service Charge per kWh 1.731 cents Sheet 1 - continued Interruptible Credits If the Customer has installed an electric water heater of a type approved by the Company, and permits the Company to control the operation of the water heater for the specified number of hours per day and during emergency situations, the Customer will receive the following credit each month: Control hrs. / day Credit IC-1 6 $0.78 IC-2 16 2.62 M. D. P. U. No. 940 Sheet 2 MASSACHUSETTS ELECTRIC COMPANY RESIDENTIAL-LOW INCOME R-6 RETAIL WHEELING PILOT PROGRAM SERVICE ADJUSTMENT FOR COST OF CONSERVATION AND LOAD MANAGEMENT The distribution service charge under this rate as set forth under "Monthly Charge" may be adjusted from time to time in the manner described in the Company's Conservation Cost Factor provisions to reflect costs related to the Company's Conservation and Load Management programs. MINIMUM CHARGE The monthly minimum charge shall be the monthly Customer Charge. BIMONTHLY BILLING The Company reserves the right to read meters and render bills on a bimonthly basis. When bills are rendered bimonthly, the Customer Charge, the Interruptible Credits and the Minimum Charge shall be multiplied by two. TERMS AND CONDITIONS The Company's Terms and Conditions in effect from time to time, where not inconsistent with any specific provisions hereof, are a part of this rate. Effective September 1, 1996 MASSACHUSETTS ELECTRIC COMPANY Effective Residential - Time-of-Use (Optional) R-7 Retail Wheeling Pilot Program Service M.D.P.U. No. 941 Adjusted by: Energy Conservation Service (ECS) Charge Adjustment for Cost of Conservation and Load Management Monthly Charge as Adjusted Customer Charge $21.33 Access Charge per kWh Peak Hours Use 3.000 cents Off-Peak Hours Use 3.000 cents Transmission Service Charge per kWh 0.376 cents Distribution Service Charge per kWh 2.700 cents Metering Charge If applicable Minimum Charge The monthly Customer Charge plus the applicable Metering Charge, if any. Other rate clauses apply as usual. M.D.P.U. No. 941 Sheet 1 MASSACHUSETTS ELECTRIC COMPANY RESIDENTIAL - TIME-OF-USE (OPTIONAL) R-7 RETAIL WHEELING PILOT PROGRAM SERVICE AVAILABILITY Electric delivery service under this rate is available for all domestic purposes in an individual private dwelling or an individual apartment and for church and farm purposes. For customers requiring special and complex metering for service, the availability of this rate will be subject to the Company's ability to render such service. The Company may due to limitations of space, considerations of safety, or an existing condition of the premises affecting the delivery of electric service, permit more than one dwelling unit to be served through one meter under this rate; but if so, the Customer Charge shall be multiplied by the number of dwelling units so served. A church and adjacent buildings owned and operated by the church may be served under this rate, but any such buildings separated by public ways must be billed separately. Any residential customer whose average usage exceeds 2500 KWH/month for a 12 month period may elect delivery service under this rate effective with installation of appropriate metering. The actual delivery of service and rendering of bills under this rate is contingent upon the installation of the necessary time-of-use metering equipment by the Company; subject to both the availability of such meters from the Company's supplier and the conversion or installation procedures established by the Company. Until service can be provided under this rate, the customer shall take delivery service under Rate R-5. This rate is available only to participants of the Pilot Program filed by the Company with the Department of Public Utilities on March 4, 1996, and service under this rate is subject to the terms and conditions of the Pilot Program included in that filing. Sheet 1 - Continued MONTHLY CHARGE The Monthly Charge will be the sum of the applicable Customer, Additional Metering, and kWh Charges. Customer Charge $21.12 Access Charge per kWh Peak Hours Use 3.000 cents Off-Peak Hours Use 3.000 cents Transmission Service Charge per kWh 0.376 cents Distribution Service Charge per kWh 2.429 cents Metering Charges New customers requiring special or complex metering for service shall pay a Metering determined on an individual customer basis. M.D.P.U. No. 941 Sheet 2 MASSACHUSETTS ELECTRIC COMPANY RESIDENTIAL - TIME-OF-USE (OPTIONAL) R-7 RETAIL WHEELING PILOT PROGRAM SERVICE PEAK AND OFF-PEAK PERIODS Peak hours will be from 8:00 A.M. to 9:00 P.M. daily on Monday through Friday, excluding holiday. Off-Peak hours will be from 9:00 P.M. to 8:00 A.M. daily Monday through Friday, and all day on Saturdays, Sundays, and holidays. The Company reserves the right to change these peak and off- peak hours, but in no case will the off-peak hours be less than eleven hours per day. The holidays will be: New Year's Day, Washington's Birthday, Memorial Day, Independence Day, Columbus Day, Labor Day, Veteran's Day, Thanksgiving Day, and Christmas Day. All holidays will be the nationally observed day. ADJUSTMENT FOR COST OF CONSERVATION AND LOAD MANAGEMENT The distribution service charge under this rate as set forth under "Monthly Charge" may be adjusted from time to time in the manner described in the Company's Conservation Cost Factor Provisions to reflect costs related to the Company's Conservation and Load Management programs. MINIMUM CHARGE The monthly minimum charge shall be the sum of the monthly Customer Charge plus any applicable monthly Metering Charge. M.D.P.U. No. 941 Sheet 3 MASSACHUSETTS ELECTRIC COMPANY RESIDENTIAL - TIME-OF-USE (OPTIONAL) R-7 RETAIL WHEELING PILOT PROGRAM SERVICE BIMONTHLY BILLING The Company reserves the right to read meters and render bills on a bi-monthly basis. When bills are rendered bi-monthly, the Customer Charge, any applicable Metering Charge, and the Minimum Charge shall be multiplied by two. TERMS OF AGREEMENT The agreement for service under this rate will continue for an initial term of one year if electricity can be properly delivered to a Customer without an uneconomic expenditure by the Company. The agreement may be terminated at any time on or after the expiration date of the initial term by twelve months' prior written notice. TERMS AND CONDITIONS The Company's Terms and Conditions in effect from time to time, where not inconsistent with any specific provisions hereof, are a part of this rate. Effective September 1, 1996 MASSACHUSETTS ELECTRIC COMPANY Effective General Service-Small Commercial & Industrial G-6 Retail Wheeling Pilot Program Service M.D.P.U. No. 942 Adjusted By: Energy Conservation Service (ECS) Charge Adjustment for Cost of Conservation and Load Management Monthly Charge as Adjusted Customer Charge $9.46 Location Service Charge - For allowed unmetered service $7.41 Access Charge per kWh 3.000 cents Transmission Service Charge per kWh 0.519 cents Distribution Service Charge per kWh 3.156 cents Minimum Charge - The applicable monthly Customer Charge or Location Service Charge, provided, however if the KVA transformer capacity needed to serve a customer exceeds 25 KVA, the minimum charge will be increased by $1.75 for each KVA in excess of 25 KVA. Other Rate Clauses apply as usual. M.D.P.U. No. 942 Sheet 1 MASSACHUSETTS ELECTRIC COMPANY GENERAL SERVICE - SMALL COMMERCIAL AND INDUSTRIAL G-6 RETAIL WHEELING PILOT PROGRAM SERVICE AVAILABILITY Electric delivery service under this rate is available for all purposes, subject to the provisions of this section. A new customer will begin service on this rate if the Company estimates that its average use will not exceed 10,000 kWh/month or 200 kW of demand. A Customer may be transferred from rate G-6 at its request or at the option of the Company if the customer's 12 month average monthly usage exceeds either 10,000 kWh/month or 200 kW of demand for 3 consecutive months. A Municipality which owns and maintains streetlight fixtures served by underground conduit may take delivery service under the unmetered service provision of this rate if the Municipality signs an Underground Electric Service for Non-Conforming Streetlighting Contract with the Company for underground electric delivery service for streetlighting. This rate is available only to participants of the Pilot Program filed by the Company with the Department of Public Utilities on March 4, 1996, and service under this rate is subject to the terms and conditions of the Pilot Program included in that filing. MONTHLY CHARGE The Monthly Charge will be the sum of the applicable Customer or Location Service Charge, and the kWh Charges: Customer Charge - applicable to metered service only. Customer Charge $9.25 Location Service Charge - for unmetered service as defined below. $7.20 Access Charge per kWh 3.000 cents Transmission Service Charge per kWh 0.519 cents Distribution Service Charge per kWh 2.573 cents M.D.P.U. No. 942 Sheet 2 - Continued UNMETERED DELIVERY SERVICE Unmetered delivery services usually are not permitted or desirable. However, the Company recognizes that there are certain instances where metering is not practical. Examples of such locations are telephone booths and fire box lights. The monthly bill generally will be computed by applying the rate schedule to a sue determined by multiplying the total load in kilowatts by 720 hours. However, the energy use may be adjusted after tests of the unmetered equipment indicate lesser usage. The kilowatthour use for underground electric service for streetlighting shall be determined according tot he provisions of the Contract for the service. When unmetered service is provided the Customer Charge will be waived and the Location Service Charge will be applied. ADJUSTMENT FOR COST OF CONSERVATION AND LOAD MANAGEMENT The prices under this rate as set forth under "Monthly Charge" may be adjusted from time to time in the manner described in the Company's Conservation Cost Factor Provisions to reflect costs related to the Company's Conservation and Load Management programs. MINIMUM CHARGE The monthly minimum charge will be the applicable monthly Customer Charge or Location Service Charge. However, if the KVA transformer capacity needed to serve a customer exceeds 25 KVA, the minimum charge will be increased by $1.75 for each KVA in excess of 25 KVA. BI-MONTHLY BILLING The Company reserves the right to read meters and render bills on a bi-monthly basis. When bills are rendered bi-monthly, the applicable Customer Charge or Location Service Charge, and the Minimum Charge shall be multiplied by two. M.D.P.U. No. 942 Sheet 2 - Continued TERM OF SERVICE Customers served under this rate must provide the Company with two years prior written notice before installing or allowing to be installed for its use a non-emergency generator with a nameplate capacity greater than that in place on the Customer's location as of October 1, 1993. TERMS AD CONDITIONS The Company's Terms and Conditions in effect from time to time, where not inconsistent with any specific provisions hereof, are a part of this rate. Effective September 1, 1996 MASSACHUSETTS ELECTRIC COMPANY Effective General Service - Demand G-7 Retail Wheeling Pilot Program Service M.D.P.U. No. 943 Adjusted By: Energy Conservation Service (ECS) Charge Adjustment for Cost of Conservation and Load Management Monthly Charge as Adjusted Customer Charge $17.14 Transmission Service Charge per kW $ 1.48 Distribution Service Charge per kW $ 6.33 Distribution Service Charge per kWh .281 cents Access Charge per kW $ 2.25 Access Charge per kWh 2.288 cents Minimum Charge The Customer Charge plus the Demand Charge. Other Rate Clauses apply as usual. M.D.P.U. No. 943 Sheet 1 MASSACHUSETTS ELECTRIC COMPANY GENERAL SERVICE - DEMAND G-7 RETAIL WHEELING PILOT PROGRAM SERVICE AVAILABILITY Electric delivery service under this rate is available for all purposes, subject to the provisions of this section. A new customer will begin delivery on this rate if the Company estimates that its average use will exceed 10,000 kWh/month, but not exceed 200 kW of Demand. A Customer may be transferred from rate G-7 at its request if the customer's 12 month average monthly usage either (a) is less than 8,000 kWh/month or (b) exceeds 200 kW of Demand of 3 consecutive months. A Customer may be transferred at the option of the Company if the Customer's 12 month average usage either (a) is less than 8,000 kWh/month or (b) exceeds 200 kW of Demand for 3 consecutive months. This rate is available only to participants of the Pilot Program filed by the Company with the Department of Public Utilities on March 4, 1996, and service under this rate is subject to the terms and conditions of the Pilot Program included in that filing. MONTHLY CHARGE The Monthly Charge will be the sum of the applicable Customer Charge, kW Charges, and kWh Charge: Customer Charge $16.93 Transmission Service Charge per kW $ 1.48 Distribution Service Charge per kW $ 6.33 Access Charge per kW $ 2.25 Access Charge per kWh 2.288 cents M.D.P.U. No. 943 Sheet 2 MASSACHUSETTS ELECTRIC COMPANY GENERAL SERVICE - DEMAND G-7 RETAIL WHEELING PILOT PROGRAM SERVICE ADJUSTMENT FOR COST OF CONSERVATION AND LOAD MANAGEMENT The distribution service charge under this rate as set forth under "Monthly Charge" may be adjusted from time to time in the manner described in the Company's Conservation Cost Factor Provisions to reflect costs related to the Company's Conservation and Load Management programs. DEFINITION OF DEMAND a) The greatest fifteen minute peak occurring during all hours, Peak and Off-Peak, within such a month as measured in kilowatts, b) 90% of the greatest fifteen minute peak occurring during all hours, Peak and Off-Peak, of such month as measured in kilovolt-amperes, c) 5 kilowatts HIGH-VOLTAGE METERING ADJUSTMENT The Company reserves the right to determine the metering installation. Where delivery service is metered at the Company's supply line voltage, in no case less than 2400 volts, thereby saving the Company transformer losses, a discount of 1.0% will be allowed from the amount determined under the preceding provisions. When the metering equipment is installed on the Customer's side of the transformer and the nameplate transformer rating is greater than 120 percent of the Customer's highest demand over the last twelve months, the Company may adjust the Kw, Kva, and Kwh meter registrations or adjust electronic meter program settings to compensate for unmetered transformer losses. CREDIT FOR HIGH VOLTAGE DELIVERY If the Customer accepts delivery at the Company's supply line voltage, not less than 2400 volts, and the Company is saved the cost of installing any transformer and associated equipment, a credit of 45 cents per kilowatt of billing demand for such month shall be allowed against the amount determined under the preceding provisions. M.D.P.U. No. 943 Sheet 2 - Continued MINIMUM CHARGE The monthly Minimum Charge shall be the sum of the monthly Customer Charge and Demand Charges. TERMS OF SERVICES Customers served under this rate must provide the Company with two years prior written notice before installing or allowing to be installed for its use a non-emergency generator with a nameplate capacity greater than that in place on the Customer's location as of October 1, 1993. TERMS AND CONDITIONS The Company's Terms and Conditions in effect from time to time, where not inconsistent with any specific provisions hereof, are a part of this rate. Effective September 1, 1996 MASSACHUSETTS ELECTRIC COMPANY Effective Time-of-Use - G-8 Retail Wheeling Pilot Program Service M.D.P.U. No. 944 Adjusted By: Energy Conservation Service (ECS) Charge Adjustment for Cost of Conservation and Load Management Monthly Charge as Adjusted Customer Charge $78.75 Transmission Service Charge per kW $1.75 Distribution Service Charge per kW $3.71 Distribution Service Charge per kWh .483 cents Access Charge per kW $4.42 Access Charge per kWh Peak Hours Use 1.943 cents Off-Peak Hours Use 1.934 cents Minimum Charge The monthly Customer Charge plus the Demand Charges. Other Rate Clauses apply as usual. M. D. P. U. No. 944 Sheet 1 MASSACHUSETTS ELECTRIC COMPANY TIME-OF-USE - G-8 RETAIL WHEELING PILOT PROGRAM SERVICE AVAILABILITY Electric delivery service under this rate is available for all purposes, subject to the provisions of this section. A new customer will begin delivery service on this rate of the Company estimates that its average use will exceed 200 kW of Demand. A Customer may be transferred from rate G-8 at its request if the customer's 12 month average monthly demand is less than 180 kW of Demand for 3 consecutive months. A customer may be transferred from rate G-3 at the option of the Company if the Customer's 12 month average monthly demand is less than 180 kW of Demand for 3 consecutive months. The actual delivery of service and the rendering of bills under this rate is contingent upon the installation of the necessary time-of-use metering equipment by the Company; subject to both the availability of such meters from the Company's supplier and the conversion or installation procedures established by the Company. All customers served on this rate must elect to take their total electric delivery service under the time-of-use metering installation as approved by the Company. If delivery is through more than one meter, except at the Company's option, the Monthly Charge for service through each meter shall be computed separately under this rate. This rate is available only to participants of the Pilot program filed by the Company with the Department of Public Utilities on March 4, 1996, and service under this rate is subject to the terms and conditions of the Pilot program included in that filing. MONTHLY CHARGE The Monthly Charge will be the sum of the applicable Customer, Demand, and Energy Charges. Customer Charge $78.54 Transmission Service Charge per kW $ 1.75 Distribution Service Charge per kW $ 3.71 Access Charge per kWh $ 4.42 Peak Hours Use 1.934 cents Off-Peak Hours Use 1.934 cents M. D. P. U. No. 944 Sheet 2 MASSACHUSETTS ELECTRIC COMPANY TIME-OF-USE - G-8 RETAIL WHEELING PILOT PROGRAM SERVICE PEAK AND OFF-PEAK PERIODS Peak hours will be from 8:00 A.M. TO 9:00 P.M. daily on Monday through Friday, excluding holidays. Off-Peak hours will be from 9:00 P.M. to 8:00 A.M. daily Monday through Friday, and all day on Saturdays, Sundays, and holidays. The Company reserves the right to change these peak and off- peak hours, but in no case will the off-peak hours be less than eleven hours per day. The holidays will be: New Year's Day, President's Day, Memorial Day, Independence Day, Columbus Day, Labor Day, Veteran's Day, Thanksgiving Day, and Christmas Day. All holidays will be the nationally observed day. ADJUSTMENT FOR COST OF CONSERVATION AND LOAD MANAGEMENT The prices under this rate as set forth under "Monthly Charge" may be adjusted from time to time in the manner described in the Company's Conservation Cost Factor Provisions to reflect costs related to the Company's Conservation and Load Management programs. DETERMINATION OF DEMAND a) The greatest fifteen minute peak occurring during all hours, Peak and Off-Peak, within such a month as measured in kilowatts. b) 90% of the greatest fifteen minute peak occurring during all hours, Peak and Off-Peak, of such month as measured in kilovolt-amperes. M. D. P. U. No. 944 Sheet 3 MASSACHUSETTS ELECTRIC COMPANY TIME-OF-USE - G-8 RETAIL WHEELING PILOT PROGRAM SERVICE HIGH-VOLTAGE METERING ADJUSTMENT The Company reserves the right to determine the metering installation. Where delivery service is metered at the Company's supply line voltage, in no case less than 2400 volts, thereby saving the Company transformer losses, a discount of 1.0% will be allowed from the amount determined under the preceding provisions. When the metering equipment is installed on the Customer's side of the transformers and the nameplate transformer rating is greater than 120 percent of the Customer's highest demand over the last twelve months, the Company may adjust the kW, kva, and kWh meter registrations or adjust electronic meter program settings to compensate for unmetered transformer losses. CREDIT FOR HIGH VOLTAGE DELIVERY If the Customer accepts delivery at the Company's supply line voltage, not less than 2400 volts, and the Company is saved the cost of installing any transformer and associated equipment, a credit of 45 cents per kilowatt of the billing Demand for such month shall be allowed against the amount determined under the preceding provisions. An additional credit of $2.14 per kilowatt of the billing Demand for such month shall also be allowed if said customer accepts delivery at not less than 115,000 volts, and the Company is saved the cost of installing any transformer and associated equipment. TERM OF SERVICE Customers served under this rate must provide the Company with two years prior written notice before installing or allowing to be installed for its use a non-emergency generator with a nameplate capacity greater than that in place on the Customer's location as of October 1, 1993. TERMS AND CONDITIONS The Company's Terms and Conditions in effect from time to time, where not inconsistent with any specific provisions hereof, are a part of this rate. Effective July 1, 1996 EX-99 3 EXHIBIT D-2 EXHIBIT D-2 April 3, 1996 Thomas G. Robinson, Esq. Massachusetts Electric Company 25 Research Drive Westborough, MA 01582 Re: Retail Access Pilot Programs Dear Mr. Robinson: On March 4, 1996, Massachusetts Electric Company ("MECo" or "Company") submitted two retail access pilot programs to the Department of Public Utilities ("Department") for review. In the first pilot program, the Company proposes to implement retail choice to residential and small commercial and industrial customers in the communities of Lawrence, Lynn, Northampton, and Worcester.(1) The second pilot program extends retail choice to members of the Massachusetts High Technology Council ("MHTC") who currently are served under the Company's G-3 rate.(2) The Company proposes to commence the residential and small commercial and industrial pilot effective September 1, 1996, and the MHTC pilot effective July 1, 1996.(3) The Company has provided unbundled rates for each pilot program and tie directly to its February 16, 1996 industry restructuring proposal. See D.P.U. 96-25, Exhibit PTZ- 13. (1) The residential and small commercial and industrial pilot would be available to customers currently served under the R-1, R-2, R-4, G-1, and G-2 rates for up to 10,000 customers representing 100 million kilowatthours per year (50 million set aside for residential customers) of electricity usage. (2) The second pilot program would provide retail choice for up to 200 million kilowatthours of electricity usage. (3) The residential and small commercial and industrial pilot would terminate on December 31, 1997, and the MHTC pilot would continue until direct access is generally available to customers. Massachusetts Electric Company Page 2 April 3, 1996 The Company stated that approval of the pilot programs is appropriate for several reasons (MECo Cover Letter at 2). First, the pilot programs will allow the Company to test the metering and billing protocols that will be used to develop broader programs. Second, the pilot programs will allow suppliers to aggregate loads, transfer capability responsibilities, and work through the NEPOOL settlement process. Third, the pilot programs will provide a test of the market. In addition, the Company stated that, because participation is voluntary and participants may return to MECo's field rates at any time, customers will not be harmed by the pilot programs. The Company also stated that, because New England Power Company will bear the risk of any under-recovery, non-participants will not be harmed by the pilot programs (DPU-IR- 3). In the transition to a competitive market structure, the pilot programs will provide valuable experience to the Company, customers, and the other participants that will be active in a competitive market. Accordingly, with the understanding that the Company's customers that do not participate in the programs are not harmed by their implementation, the Department approves the pilot programs. In addition, the Department understands that the Company will file a pilot distribution tariff with the Federal Energy Regulatory Commission, with the rates, terms and conditions approved by the Department. Finally, in approving the pilot programs, the Department makes no findings on the merits of the Company's restructuring proposal (D.P.U. 96-25). Sincerely, /s/ John B. Howe John B. Howe, Chairman /s/ Mary Clark Webster Mary Clark Webster, Commissioner /s/ Janet Gail Besser Janet Gail Besser, Commissioner cc: Mary L. Cottrell George Dean, Assistant Attorney General EX-99 4 EXHIBIT D-3 EXHIBIT D-3 NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION DR 95-250 Retail Competition Pilot Program Order Establishing Final Guidelines and Requiring Compliance Filings O R D E R N O. 22,033 February 28, 1996 I. INTRODUCTION In June 1995, the New Hampshire Legislature directed the NHPUC to establish a pilot program (Pilot) to examine the implications of retail competition in the electric industry, provided that it is found to be "fair, lawful, constitutional, consistent with RSA 378:37 and in the public good". NHRSA 374:26- a, Laws of 1995, Chapter 272, effective January 1, 1996, previously referred to as Senate Bill 168-FN-A, 12. See Appendix A. In response to this mandate, the NHPUC issued Preliminary Guidelines on October 9, 1995, followed by First Revised Guidelines on November 20, 1995. On January 23, 1996, the NHPUC issued Second Revised Guidelines which addressed additional comments submitted by interested parties and the recommendations which emerged from an intensive series of collaborative meetings (the Collaborative) during late December 1995 and early January 1996. Hearings were held on the Second Revised Guidelines January 29, 1996. After considering all of the written comments and those offered at the recent hearings, we issue the following Final Guidelines (Guidelines) for the Pilot. The purpose of these Guidelines is to prescribe how the Pilot will be implemented in order to accomplish the objectives set forth below. Nonetheless, the revised procedural schedule contained in Appendix B provides for a number of joint working meetings with representatives from Staff, franchised utilities and other Pilot participants to discuss technical questions raised by these Guidelines. Franchised utilities will be required to make compliance filings on or before March 15, 1996 and we will conduct hearings on those filings April 1-5, 1996. We anticipate issuing a final order on the compliance filings on April 15, 1996 and direct utilities to commence the Pilot on May 28, 1996. As stated in our Preliminary Guidelines and reaffirmed in the Revised Guidelines, the Pilot is not necessarily a blueprint for industry restructuring; rather, it should be viewed as an opportunity to examine the implications of and obstacles to competition in retail electric markets. Accordingly, the Pilot is limited in scope, size and duration. For instance, although performance based regulation may be an effective means to regulate certain segments of the industry which remain naturally monopolistic, it is unnecessary to initiate such regulatory reforms in order to implement the Pilot. We issue these Guidelines with the expectation that stakeholders will take advantage of the opportunity to gain first-hand knowledge of the problems associated with introducing competition into what has previously been a thoroughly regulated industry. We continue to believe that the Pilot should be implemented in a manner which enables policymakers to gather meaningful data without causing an unreasonable financial impact on the state's electric utilities. It is not our intent or purpose to have the Pilot be the battleground for recovery of stranded costs or the future shape of the electric utility industry. For the above reason, the Pilot can not be expected to yield empirical data which will provide easy answers to all of the complex issues associated with the establishment of full retail competition in the electric industry. While some of the information which the Pilot will generate may be anecdotal in nature, the Pilot will provide an opportunity to encounter first-hand many of the realities competitive markets. As with all NHPUC orders or directives, we reserve the right to revisit the issues discussed herein and to make modifications as appropriate during the term of the Pilot. Finally, we affirm our belief that consensus-building and cooperative approaches should play an important role in any future restructuring of New Hampshire's electric utility industry. Based upon the success of the Pilot collaborative, we believe that such an approach should play a part in resolving the many difficult and challenging issues which could delay the introduction of meaningful competition and lower rates for New Hampshire's citizens and businesses. II. PILOT OBJECTIVES The Pilot's primary objective is to determine whether retail competition in the electric utility industry can promote lower retail rates for all customers without compromising the reliability and safety of the power supply system. Consistent with this view, we have developed these Guidelines in order to test certain fundamental assumptions which underlie the case for retail competition. For instance, the Pilot should provide information regarding the level of demand among different customer classes for competitively supplied electric services and the corresponding level of interest among competitive generators to supply those services. The Pilot should also test whether customers of all classes have sufficient bargaining power to significantly benefit from a deregulated power market. Such information potentially has great value since it may enable a competitor to determine which markets are the most profitable to serve. Likewise, we view the Pilot as an opportunity to test certain arguments advanced by those who oppose retail competition or question whether the benefits of competition will be shared by all customer classes. Additionally, the Pilot should provide information relative to the potential financial impact of retail competition on New Hampshire's electric utilities. Finally, the Pilot will allow the parties to gain experience in a broad range of technical and administrative matters relating to competitive markets including the design and costing of unbundled electric services. As we stated in our last Report, we have decided that the Pilot is not the appropriate forum to resolve all of the complex economic and legal issues associated with the restructuring of the electric utility industry. Nonetheless, a meaningful Pilot can not be implemented without specifying the initial level of stranded cost recovery. In Section V we define stranded costs and establish a preliminary level of recovery in order to move the Pilot forward. We will address the broad legal and policy arguments associated with the issue of stranded cost recovery for the Pilot and the transition to full competition in a separate proceeding. III. LEGAL ISSUES A. Authority to Order Retail Wheeling In our previous Reports in this proceeding, we set forth the statutory basis for the establishment of a retail electric competition pilot program. The authorizing legislation requires us to establish a pilot program provided that it is found to be "fair, lawful, constitutional, consistent with RSA 378:37 and in the public good". NH RSA 374:26-a. We believe that, if properly implemented by the state's franchised utilities, these Guidelines are consistent with these conditions. In addition to the express statutory authority to establish the Pilot, we believe that the NHPUC has the existing legal authority to introduce competition into the retail electric markets within this state if we find it to be in the public good. See, NHPUC Order No. 21,683, Re Freedom Electric Company, DE 94-163 (June 6, 1995). Moreover, unlike issues related to retail transmission services, it is undisputed that the FERC has no legal authority to prevent states from ordering retail wheeling. Any disagreement with our position on this issue of state law will be resolved when the New Hampshire Supreme Court issues its decision in the Freedom Electric appeal. B. Stranded Cost Recovery In our previous Reports relative to the Pilot, we discussed the legal and policy considerations which led to our preliminary conclusion that utilities should not be entitled to 100% recovery of their stranded costs in a transition to retail competition. We continue to hold this view and believe that it is legally justified and premised upon sound public policy. Nevertheless, for the reasons set forth below, our discussions in previous Reports do not represent a final determination of this important and contentious issue. Not surprisingly, in response to our Preliminary Guidelines relative to this issue, we received comments from stakeholders which reflected either strong opposition or abundant support for our position. Clearly, the issue of stranded cost recovery in a full transition will present significant and complex challenges for policy-makers. In light of the important interests involved in such a debate, the Pilot could be delayed indefinitely if any of the many stakeholders in this proceeding attempted to use it as the forum to set precedent for the eventual restructuring of the industry. After carefully considering our statutory mandate to establish a Pilot which examines the "implications" of retail wheeling, we have elected to reserve our final determinations relative to stranded cost recovery until the conclusion of a separate, generic restructuring proceeding. In that proceeding, we intend to fully explore the legal and policy considerations relative to stranded cost recovery and develop principles which will guide our decisions concerning industry restructuring. For those utilities that participate in the Pilot under the fifty-fifty mechanism, that proceeding will provide an opportunity for the reconciliation of stranded costs and revenues. C. Jurisdiction over Intrastate Transmission In order for Pilot customers to benefit from competition, it is necessary for competing suppliers to have equal access to transmission services in order to deliver power supplies to the distribution systems of franchised utilities. While it is clear that states have the requisite jurisdiction to regulate the rates, terms and conditions of distribution services, the jurisdictional boundaries are less clear relative to the transmission component. As noted in our previous Reports, we continue to believe that states maintain exclusive jurisdiction over the rates, terms and conditions of the intrastate transmission, distribution and sale of electric power to retail customers - whether those services are provided in bundled or unbundled form. See, NHPUC Order No. 21,850, Cabletron Systems Inc., and Johnson Controls Inc., DE 95-95 (October 3, 1995). Although we maintain our position that we have exclusive jurisdiction over intrastate transmission facilities used to provide electric service to retail customers, it is not our intent to allow participants to convert this proceeding into the forum for resolving the national debate over the respective roles of state and federal regulatory agencies. It is unclear at this time how that debate will proceed and the forum in which it will ultimately be decided, but we do not believe that it is either necessary or in the public interest to delay the Pilot until the jurisdictional lines between state and federal regulators are more clearly delineated. This approach is consistent with the one which we have adopted for stranded costs. We intend to explore alternative solutions to this problem with the FERC in order to implement the Pilot without compelling us to assert our authority in this area. We have established voluntary filing guidelines which are designed to encourage such cooperation. D. Filed Rate Doctrine Several commenters suggest that the NHPUC lacks the authority to deny utilities with FERC-approved purchase power contracts the right to full recovery of power costs shifted to non- participating customers through the application of fuel and purchase power adjustment mechanisms. According to this argument, the "filed rate doctrine" precludes the NHPUC from interfering with the application of adjustment mechanisms. We disagree. As we stated in the First Revised Guidelines, fuel and purchased power adjustment mechanisms are designed to track variations in power costs, not to insulate utilities from the risk of financial loss resulting an inability to compete. This position is consistent with the original NHPUC policy considerations which approved fuel adjustment mechanisms. See, In re Public Service Company of New Hampshire, 31 N.H.P.U.C. Rep. 83 (1949). Similarly, the New Hampshire Supreme Court has observed that the "adjustment clause is a recognized device, most commonly applied to fuel costs, which shortcuts the time lag between changes in cost and the collection of compensation during periods of rapidly changing costs." Public Service Company of New Hampshire v State of New Hampshire, 113 N.H. 497, 502 (1973). Thus, it is clear that fuel and purchased power adjustment clauses are intended to provide utilities with an opportunity to adjust rates for fluctuations in power and not as a means to recover revenues lost as a result of fluctuations in demand. While it has been the NHPUC's practice to adjust rates for variations in supply costs and demand, we will not permit costs to be shifted from Pilot participants to non- participants. We are setting forth our position relative to this issue for purposes of the Pilot. It should not be viewed as our final determination as to how we will treat the uneconomic costs associated with wholesale power contracts in any transition to full competition. As with other issues related to stranded costs, we will investigate this issue fully in the context of a separate restructuring proceeding. E. PSNH Rate Agreement We reiterate the our belief that the Rate Agreement entered into between PSNH and the State of New Hampshire offers PSNH no greater protection from competition than exists for the state's other electric utilities. The basis for our position is set forth in the First Revised Guidelines which we incorporate herein by reference. F. APRA Similarly, we continue to maintain our belief that NHEC's members may participate in the Pilot without causing NHEC to violate the APRA. As we stated in the First Revised Guidelines, nothing in the APRA prohibits NHEC's members from procuring power supplies from alternative competitive sources in order to participate in the Pilot. IV. UNBUNDLED TRANSMISSION SERVICE In order to introduce the beneficial forces of competitive markets into the electric utility industry, it is essential to "unbundle" retail electric services. These services consist of three main components: generation, transmission and distribution which have traditionally been provided in bundled form by one service provider. Generation service provides customers with reliable capacity and energy from a utility's own power plants or from generating facilities owned by other utilities. Transmission is the backbone for the delivery of capacity and energy from generation sources to main load centers and most large customers. Distribution involves the delivery of capacity and energy from the transmission network to most small and medium sized customers. By unbundling the three components of electric service, customers gain access to alternative sources of generation at market prices. Under this scenario, competing suppliers who are located in or outside of the state must utilize the networks of transmission-owning utilities in order to deliver power to the main load centers where transmission interconnects with distribution. Accordingly, the market price of power delivered to main load centers will probably include the costs of such transmission service. A necessary condition for fair competition in electric generation markets is non-discriminatory transmission access and pricing. In simple terms, this means that all suppliers must have an equal right and opportunity to utilize the transmission network and pay the same rate to wheel power across it. In the absence of such a policy, or a failure by regulators to implement it, transmission-owning utilities would adopt restrictive transmission practices which would distort the workings of the bulk power market and unfairly increase the value of their excess generation resources. In light of our intention to resolve the jurisdictional problem cooperatively, we request that our jurisdictional utilities voluntarily file retail transmission tariffs both at the FERC and the NHPUC. Such tariffs shall be non-discriminatory and shall be available to competing suppliers on the same terms and conditions which the utility extends to itself. To the extent that the FERC requires approval of those tariffs before they are made available to competing suppliers, we ask that the utilities seek the FERC 's expedited approval. V. STRANDED COST RECOVERY As we stated above, we intend to investigate the issue of stranded cost recovery generically and within a separate proceeding which relates to industry restructuring. Nevertheless, as a practical matter utilities will need some guidance on this issue in order to develop unbundled rates which provide customers the necessary incentives to participate in the Pilot. Such guidance must begin with a definition of stranded costs. A. Definition of Stranded Costs Stranded costs can be calculated in several ways, some of which are more complex than others. For the purposes of the Pilot, stranded costs will be defined and calculated by projecting the difference between the revenue which a utility would have had an opportunity to collect at current rates, in the absence of the Pilot, and the revenue which the utility expects to collect during the term of the Pilot, including projected revenue from power sales at market prices and from transmission and distribution service s. The assumed market prices to be used in these calculations will be issued following our consideration of the recently filed Joint Recommendation between PSNH and the Staff. This definition means that a cost already on the books but not approved for ratemaking purposes during the term of the Pilot will not qualify as a stranded cost. In this calculation, no adjustment is made for variable cost savings associated with lost load since we assume that a franchised utility or its power marketing affiliate will continue to sell to its Pilot customers at prevailing market rates. B. Stranded Cost Recovery After estimating the magnitude of stranded costs, the next step is to set the level of recovery for the purposes of developing unbundled rates. We have determined that in the absence of a negotiated resolution which sets the level of recovery for each utility, a fifty-fifty division of stranded costs between participating customers and investors is an equitable starting point. The participating customers' share of these costs shall be recovered via a usage-based surcharge on distribution service during the term of the Pilot. C. Separate Stranded Cost Docket As stated in the First Revised Guidelines, we expressed our intent to open a separate docket to determine on a utility-specific basis the appropriate level of stranded cost recovery. As set forth above, utilities which fail to submit or receive approval of an alternative stranded cost recovery mechanism are required to develop unbundled rates which recover 50% of their stranded costs. In order to minimize price uncertainty for participating customers, the difference, if any, between the initial 50% recovery level and the level ultimately found to be appropriate shall be shared among all customers. D. Mitigation Issues We expect significant and aggressive efforts to mitigate above market costs during the Pilot and in any transition to full competition. We recognize, however, that costs incurred by a utility in the process of mitigating strandable costs must receive different treatment. We believe the appropriate way to address such costs is on a project specific basis. Along these lines, full recovery of power costs associated with any small power producer agreements which are subject to RSA 362-A:4-b shall be contingent upon the outcome of our ongoing inquiry into those arrangements . VI. RATES FOR UNBUNDLED SERVICES As noted above, in order to allow customers to benefit from the forces of competitive markets, franchised utilities must unbundle retail electric services. While some argue that unbundling should simply be the functional separation of generation from the remaining industry functions, we believe that approach would result in the loss of valuable information regarding the cost structures of jurisdictional utilities. We will require utilities to disaggregate their bundled retail services into the following minimum functions: customer service, transmission, distribution, C&LM and power supply. The power supply function should be further disaggregated into a market price component and a stranded cost component that reflects the extent to which a utility's generation resources are uneconomic. The overriding policy objectives governing this unbundling are: (i) the provision of accurate market price signals for power supply services; (ii) nondiscriminatory transmission and distribution access and pricing; and (iii) the avoidance of cost shifting among classes or among customers within a class. Because transmission and distribution, and to a lesser degree customer service, continue to exhibit natural monopoly characteristics, these rates should be based on cost rather than the value of those services in the open market. We will require an embedded cost approach to pricing customer service, transmission, distribution and C&LM. Rather than update embedded costs to a recent test year, the rates for such services shall reflect the embedded costs in existing bundled retail rates. While this approach results in embedded costs of different vintages, it levels the playing field by ensuring that unbundled and bundled service customers in the same franchised area and class pay the same rates for equivalent services. Finally, while the costs embedded in existing bundled rates will be used as the basis of unbundled rates for the Pilot, utilities will be permitted to revise those rates during the life of the Pilot provided they are successful in gaining rate relief in a general base rate case. Because the purpose of the Pilot program is to obtain information to help determine whether retail competition is in the public interest, we will require that reasonable incremental costs incurred as a result of the Pilot be recovered from all customers rather than participating customers alone. VII. RESPONSIBILITIES OF PILOT CUSTOMERS Under retail competition, customers will have increased opportunities to lower their power costs by selecting among competing power suppliers. However, commensurate with the opportunity for lower costs, customers also will assume full responsibility and risk for the consequences of their choices. For example, power may be offered as a discrete commodity without transmission and distribution deliverability, at an apparent low cost. However, under this option, customers must also secure and pay additional amounts for the delivery of that commodity over transmission and distribution systems. The aggregate cost and reliability of the delivered commodity will be the customers' responsibility. To avoid some of the decisions and risks involved in acquiring unbundled generation, transmission, and distribution services, customers may opt to purchase generation, transmission, and distribution services as a package from a single broker, marketer or aggregator. Under either approach, it is essential to recognize that the customer bears all financial and reliability risk. As each customer addresses the decision to secure resources from alternate suppliers, the customer must develop a strong understanding of his economic decision-making function, including an understanding of all needs, costs and risks. Based upon these considerations, any customer selected to participate in the Pilot will be responsible for the following: A. Negotiation for Supply of Electric Power The negotiation of a competitive supply of electric power may be done directly by the customer or through an energy broker, marketer or other agent. Electricity may also be purchased from a power marketer affiliated with a franchised utility. The customer will pay for electric power at the negotiated price. The NHPUC will not set or approve that price. B. Back-Up and Emergency Service Because of the requirement that competitive suppliers either be NEPOOL members or contract with members for back-up bulk power service, there is no need for Pilot customers to purchase, and utilities to offer, back-up and emergency services. Those services will be bundled in firm power supplies purchased from competitive suppliers. C. Negotiation and Payment for Delivery of Power Pilot customers their representatives must negotiate with competitive suppliers for the delivery of electric power. Out-of-state power supplies will be transmitted to the New Hampshire border under FERC-approved transmission rates. Transmission and distribution within New Hampshire will conducted under tariffs approved by both the FERC and the NHPUC. VIII. PILOT DESIGN A. Size and Duration 1. Franchised utilities under our jurisdiction shall permit competitive suppliers non-discriminatory access to 3% of their 1994 peak retail load for purposes of the Pilot. This load shall be distributed among the classes in approximate proportion to the estimated peak load for each class including load served under approved special contracts. 2. Any franchised utility seeking to designate a larger percentage of load for the Pilot may make such a request in its March, 15, 1996 compliance filing. 3. In addition to the 3% of existing load, competitive suppliers will also be permitted to access the loads of new large commercial and industrial customers. New large commercial and industrial customers are customers who locate in a franchised utility's service territory on or after March 1, 1996 and who would otherwise be served under the applicable rate schedules listed in Appendix D. Large commercial and industrial customers switching from one New Hampshire service territory to another are not eligible to participate in the Pilot under the new load category. 4. The approximate existing or old load to be allocated to the Pilot for each franchised utility is as follows: Concord Electric Company 2.75 MW Connecticut Valley Electric Company 0.86 MW Exeter and Hampton Electric Company 3.00 MW Granite State Electric Company 3.75 MW New Hampshire Electric Cooperative 5.25 MW Public Service Company of New Hampshire 35.13 MW Total 50.74 MW 5. The Pilot shall be implemented on May 28, 1996 and shall extend for a period of two years from the date of implementation, unless further ordered by the NHPUC. 6. At the conclusion of the Pilot, all negotiated terms and rates with competitive suppliers shall terminate. B. Customer Selection The following guidelines shall control how customers will be selected to participate in the Pilot. Individual Selection 1. Consistent with RSA 374:26-a, customers in all electric utility franchised areas and in all classes shall be eligible to be considered for participation in the Pilot, unless they are contractually prohibited from doing so as explained be low. 2. Customers with existing contractual obligations to franchised utilities may participate in the Pilot only if by doing so they will not violate their obligations under such contracts , or if they are able to renegotiate the terms of those contracts. Those contracts fall into the category of "special contracts" and contracts associated with approved C&LM programs. 3. Individual customers who wish to participate in the Pilot must first express this interest to their franchised utility. All eligible customers should be afforded an opportunity to express such an interest before the actual participants are selected. Although we are inclined to require interested customers to submit some form of written expression of interest to their franchised utility, we are cognizant of the potentially high administrative costs associated with such a process. Accordingly, we will entertain specific proposals from each utility relative to this aspect of the selection process. We strongly encourage utilities to expeditiously submit their preferred methods for customers to apply for participation in the Pilot. 4. The selection of individual participating customers shall be conducted by each utility under the oversight of the NHPUC Staff. We will not specify how customers should be selected, although we have stated in previous Reports that the process must be fair and random. Once a sufficient number of customers has been selected to fill the requisite 3% load requirement, utilities shall be under no further obligation to select additional customers in the event that customers who are initially selected continue to take bundled service. 5. The customers of municipal electric utilities may participate in the Pilot provided that their utility provides access by developing unbundled rates. A participating municipal electric utility means a non- jurisdictional New Hampshire utility which currently provides bundled retail electric service and which voluntarily allows its customers to participate in the Pilot. If any such municipal utility elects to facilitate the participation of its customers in the Pilot, it must agree to develop non-discriminatory transmission and distribution services. Group Selection 6. Approximately one half of the existing residential and small commercial customer load earmarked for the Pilot shall be eligible to participate in the Pilot through Geographic Areas of Choice (GACs). GACs are defined as groups of residential and small commercial customers within a defined geographic area. 7. GACs should be nominated by an appropriate government authority. 8. In order for a GAC to be considered for selection, there must be a written expression of interest submitted to the franchised utility which currently serves the geographic area by a date to be determined by the NHPUC. The written expression of interest must include the following information: * location and geographic boundaries of proposed GAC * estimated aggregate load of the GAC, broken down by customer class; * demographic profile of the GAC; * number of potential participating customers by class 9. The selection of GACs shall be conducted in a random and fair manner from a pool of volunteer GACs. As with individual selection, utilities should expeditiously submit their preferred methods for GACs to apply for participation in the Pilot. The minimum number of GACs per franchised utility are as follows: Connecticut Valley Electric - 1 Concord & Exeter Electric - 1 Granite State Electric - 1 New Hampshire Electric Coop - 2 Public Service of New Hampshire - 4 C. Supplier Eligibility 1. The potential array of suppliers who are eligible to participate in the Pilot include generators, aggregators, marketers and brokers who seek to supply electricity directly or indirectly to participating customers. Such suppliers may include exempt wholesale generators, qualifying facilities, non-jurisdictional utilities, jurisdictional utility marketing affiliates and non-affiliated power marketers, all located both within and outside the State of New Hampshire. 2. Competitive suppliers must obtain NEPOOL membership or contract with a NEPOOL member in order to participate in the Pilot. This requirement will ensure that competitive suppliers with firm load obligations have adequate power supply resources to meet both their firm load and their apportioned share of the NEPOOL required reserves. This requirement will also ensure that competitive suppliers will gain access to NEPOOL scheduled and unscheduled outage service. 3. Competitive suppliers are eligible to participate in the Pilot only after registering with the NHPUC. Such suppliers must include the following information in their registration: (a) Name, business organization, principle place of business, and registered New Hampshire agent; (b) Evidence of eligibility to conduct business in New Hampshire; (c) Evidence that supplier has obtained NEPOOL membership or has contracted with a NEPOOL member for back-up power supply service. Only after receiving confirmation of the receipt of such information from the NHPUC may competing suppliers transact to sell power to participating customers. D. Load Aggregation 1. Pilot participants shall be allowed to aggregate their loads only for the purpose of negotiating the purchase of power from competitive suppliers. 2. Given its unique circumstances, we will allow NHEC's management to perform the role of a load aggregator/supply negotiator on behalf of member participants who request this service. E. Usage and Other Customer Data To develop winning marketing strategies, competing suppliers must obtain good information about the needs and usage patterns of customers. The following guidelines will govern the release by franchised utilities of customer-specific load and usage data to competitive suppliers. 1. Authorization must be obtained before customer-specific load and usage data is made available to competitors. The nature of the required authorization will differ depending upon the selection process used. * Random individual selection - Authorization to release load and usage data is assumed to be given when a customer is selected to participate in the Pilot unless the customer indicates otherwise in writing to its franchised utility. In that instance, the customer's name and address will be released to competitive suppliers but only the participant will receive his or her usage data. * GAC selection -Authorization is automatically given to release the names and addresses of customers located within the boundaries of a chosen GAC. The availability of all other information shall be subject to customer explicit authorization. 2. Customer-specific load and usage data released by a franchised utility shall include: (i) Customer's name, billing address, and location (if different). (ii) The customer's kWh and kW (if applicable) consumption history which is readily available on the franchised utility's computer system. (iii) Load management or other equipment (if any) installed at customer's location. 3. Data for a prescribed area may be obtained from the franchised utility upon request. Such data may include: (i) Number of customers by class. (ii) Typical load shapes. (iii) Approximate kWh sales and kW load. 4. The incremental cost of producing and communicating customer specific or area specific data may be recovered from competitive suppliers through NHPUC approved charges. F. Metering 1. In order to avoid the expense of installing hourly recording meters for the Pilot we will allow participating customers to utilize currently installed equipment. Bills for transmission, distribution and power supply services should be calculated based on monthly metering data. 2. Franchised utilities will be required to estimate the hourly loads of Pilot customers using load profiles for the relevant customer class, and shall make this information available to competing suppliers. A description of how one utility currently proposes to use load profiles to estimate hourly loads is contained for informational purposes in Appendix E. 3. Franchised utilities will be responsible for meter reading and transferring data expeditiously to competitive power suppliers. 4. Franchised utilities may levy separate NHPUC approved charges to recover reasonable incremental metering and data transfer costs not provided for in unbundled rates. 5. Franchised utilities may separately bill a competitive supplier for additional metering and communications expenses associated with the use of more sophisticated metering equipment requested by supplier. 6. Although we are not requiring the installation of hourly metering as a condition for participation in the Pilot, in order to assess the accuracy of load estimates, we direct the franchised utilities to cooperate in a collective effort to ins tall the necessary metering and communications equipment to provide statistically valid hourly load data. G. Billing 1. Competitive suppliers have the option to bill separately for power supply services. 2. Franchised utilities may provide billing services to competitive suppliers if they so desire. If a franchised utility provides billing services to an affiliate power marketer, it must also offer the same or comparable services to non-affiliated competitive suppliers. 3. If a franchised utility provides billing services, the charge for such services shall not exceed the incremental costs incurred. 4. Any bill submitted to a Pilot participant shall include the supplier's name, phone number, and business address. H. Ancillary Services Ancillary services are services which may or may not be necessary for the reliable and safe delivery of power from competing suppliers, including but not limited to, voltage control, operating reserves, and power factor adjustment. 1. Because of the requirement that competitive suppliers must be members of or contract with members of NEPOOL, generation-related ancillary services such as voltage and frequency control and operating reserves will be supplied at the bulk power level and the costs recovered through power supply prices. Consequently, we will not require franchised utilities to offer unbundled generation-related ancillary services. 2. To the extent that there are ancillary services related to the transmission and distribution functions, these services will continue to be provided in a bundled form by the operators of the transmission and distribution systems. 3. Unbundled charges for generation, transmission or distribution related ancillary charges will not be permitted during the term of the Pilot unless already provided under generally available tariffs. I. Responsibilities of Pilot Customers and Franchised Utilities 1. It shall be the responsibility of Pilot customers to negotiate with competing suppliers and other service providers. A franchised utility shall not interfere with the negotiations between Pilot customers and competing suppliers, but it shall be permitted to compete in the Pilot on the condition that it establish an affiliate company for that purpose. Although this requirement will ensure that appropriate inter-affiliate pricing arrangements are instituted for the sale of goods and services by jurisdictional utilities, we recognize that it does nothing to curb possible anti-competitive abuses by non-jurisdictional utilities. We anticipate that other regulators, both state and federal, will exercise their authority to prevent market abuses. That limitation notwithstanding, the requirement is consistent with our position that franchised utilities must aggressively mitigate their stranded costs since revenues received from the sale of utility goods and services can be applied against such costs. The guidelines governing the pricing of inter-affiliate transactions are detailed in Section VIII(L) of these Guidelines. J. Rates and Charges 1. A utility shall not impose an exit fee on Pilot customers and shall not impose a re-entry fee when those customers return either during or at the termination of the Pilot. Reasonable incremental costs, approved by the NHPUC, which are directly related to serving Pilot customers may be recovered from participants. 2. Rates for unbundled services, calculated in accordance with Section VI of these Guidelines, shall be submitted for NHPUC approval. Workpapers shall be presented identifying by account number the embedded costs allocated to each service for each customer class and the corresponding billing determinants used in the development of rates. 3. While transmission and distribution charges shall be based on individual rather than aggregated customer loads, such charges may be collectively billed to an agent authorized to act on behalf of an aggregated group of customers. 4. A utility shall be entitled to levy a surcharge on all customers to recover reasonable administrative costs, approved by the NHPUC, associated with the establishment and implementation of the Pilot. 5. To the extent that a utility believes that it will incur stranded costs as a result of the Pilot, it may seek recovery of those costs consistent with Section V of these Guidelines. That is, prior to the implementation of the Pilot, the utility shall estimate for each rate class its projected stranded costs and, based on those estimates, develop usage- based, stranded cost charges that recover from participating customers 50% of those costs. The assumed market prices to be used in the calculation of stranded costs will be issued following our consideration of the recently filed Joint Recommendation and Staff. 6. Franchised utilities offering billing services in accordance with Section VIII(G) of these Guidelines shall submit for approval applicable rates and terms and conditions. K. Customer Protection 1. Existing rules designed to protect customers who receive bundled electric services shall continue to apply, where appropriate, to unbundled transmission and distribution services offered by franchised utilities. 2. Existing rules relating to the winter termination of certain residential customers shall be applied to all competitive suppliers in the Pilot. 3. The resources of the NHPUC will be available to resolve disputes between customers, utilities and competitive suppliers. L. Pricing of Inter-affiliate Transactions We are indifferent as to the effect affiliated agreements have on utility affiliates. Our interest and concern extends only to the effect these agreements have on franchised utilities and their customers. The most common approaches to pricing affiliate transactions are: (a) transfer at cost where cost is defined to include an allowance for a return on capital; (b) transfer at the market rate; and (c) a multiple of cost. All these approaches recognize that affiliates, whether regulated or non-regulated, must conduct their affairs in a businesslike manner and should have an opportunity to earn a fair profit for services provided. This basic business principle must be reflected in the pricing of any inter-affiliate transaction. Transactions which take place at out of pocket cost violate this principle. Transactions at out-of-pocket cost may be adequate for transactions between divisions or cost centers of the same company but not between independent companies supposedly engaged in arms length negotiations. We will require that the pricing of inter-affiliate transactions be free of all subsidies. Goods and services traded in competitive markets, such as power supply, will be priced at fair market value. For goods and services purchased from the franchised utility or an affiliated service company, such as internal accounting, preparation of records, financial services , data processing, legal advice, and wages and salaries of employees assigned to Pilot activities, prices shall be set on a cost plus basis including administrative and general overhead. In order to verify compliance with this guideline, franchised utilities shall file pursuant to RSA 366:3 affiliate agreements which specify in detail the goods and services to be provided and the related pricing provisions. Such agreements shall be submitted no later than March 15, 1996. IX. MONITORING AND EVALUATION 1. The NHPUC will monitor the progress of the Pilot and evaluate the development of competitive retail electric markets. 2. In connection with this monitoring process, franchised utilities, competing suppliers and Pilot customers shall make certain information available to the NHPUC. Such information, which we detail below, shall be accorded confidential treatment as appropriate under RSA 91-A, New Hampshire's Right to Know Law. 3. Franchised utilities shall report by class the number of customers and customer groups that request to participate in the Pilot. The names and addresses of customers actually selected, including those within participating GACs, shall be provided to the NHPUC no later than May 1, 1996. 4. Franchised utilities shall record all expenses which relate to the Pilot in separate accounts and shall submit monthly reports to the NHPUC which itemize these expenses. These reports shall also include by class the number of participating customers, monthly kWh and kW sales and associated unbundled revenue based on approved tariffs. Additional revenue related to the provision of metering, billing or data processing services, to recover approved administrative costs, or for goods and services sold to power marketing affiliates shall be separately identified. 5. Franchised utilities subject to the NHPUC's fifty-fifty stranded cost sharing mechanism shall calculate actual net lost revenues by class and submit monthly reports summarizing that information. 6. Competitive power suppliers, including power marketing affiliates, shall file quarterly reports detailing by customer account number the prices and quantities associated with each transaction. To the extent that a customer makes more than one power purchase during a reporting period, the price and quantity data for that customer shall be provided on an average or aggregate basis. In addition, in order to verify the reasonableness of inter-affiliate power supply transactions, franchised utilities shall file each month a quantity-weighted average wholesale price for short-term sales and purchases. Short-term transactions are defined as a month or less in duration. 7. We will also require franchised utilities to analyze the customer load data from the sample of participants fitted with hourly recording meters and report their findings in semi-annual reports. 8. Information about competitive power suppliers will be publicly available through the Pilot registration process. X. COMPLIANCE FILINGS 1. Pursuant to these Guidelines, franchised utilities shall file compliance tariffs incorporating unbundled rates and general terms and conditions for customer, distribution and transmission services. The compliance filings must also specify or contain the following: (a) workpapers supporting 3% retail load requirement; (b) breakdown of 3% retail load requirement by rate class and by individual/GAC participation; (c) adjustments to fuel and purchase power adjustment mechanisms to ensure non-participating customers are not burdened with un-recovered power costs; (d) workpapers supporting unbundled rates; (e) method of estimating hourly loads for NEPOOL billing purposes; (f) time period to transfer metering data to competitive suppliers; (g) miscellaneous charges and associated workpapers relating to billing, data processing and transfer, and administrative services; (h) pricing arrangements for power and non-power related goods and services transacted between franchised utilities and affiliated companies; (i) plans to install hourly load meters for state-wide sample. Based upon the foregoing, it is hereby ORDERED, that the foregoing Final Guidelines are APPROVED; FURTHER ORDERED, that all New Hampshire electric utilities shall implement a retail electric pilot program consistent with these Final Guidelines unless alternative proposals are approved by this Commission; and it is FURTHER ORDERED, that all New Hampshire electric utilities shall file compliance tariffs and all other information described in Section X on or before March 15, 1996; and it is FURTHER ORDERED, that for the purposes of making the above-described compliance filings, Granite State, CVEC and PSNH shall file tariffs consistent with their recommended unbundled rates pending our consideration of the Joint Recommendation filed by PSNH. By order of the Public Utilities Commission of New Hampshire this twenty- eighth day of February, 1996. Douglas L. Patch Chairman Bruce B. Ellsworth Commissioner Susan S. Geiger Commissioner Attested by: Claire D. DiCicco Assistant Secretary APPENDIX A New Hampshire Revised Statutes Annotated (RSA) 374:26-a, mandating creation of a pilot program, provides as follows: 374:26-a Retail Competition Pilot Program. The commission shall establish a pilot program, under such terms and conditions as the commission shall deem appropriate, for the purpose of determining the implications of retail competition in the electric industry, provided that the commission determines that such program is fair, lawful, constitutional, consistent with RSA 378:37 and in the public good. This pilot program shall be open to all franchised areas and to all classes of customers. APPENDIX B Procedural Schedule for Implementing Final Guidelines Final Guidelines February 28, 1996 Compliance Filings March 15, 1996 Technical Sessions March 18-29, 1996 Hearings on Pilot Implementation April 1-5, 1996 Final Commission Report April 15, 1996 Pilot Commencement May 28, 1996 APPENDIX C The following organizations submitted written comments on the Preliminary and Revised Guidelines: Associated Power Services Inc., Business and Industry Association of New Hampshire, Cabletron Systems Inc., Central Illinois Light Company, Connecticut Valley Electric Company, Conservation Law Foundation, Office of Consumer Advocate, City of Dover, EnerDev, Inc., The Flatley Company, Freedom Energy Company, Funspot, Granite State Electric Company, Granite State Hydropower Association, Great Bay Power Corporation, KCS Power Marketing, Inc., Rep. Jeffrey C. MacGillivray, City of Manchester, New England Cogeneration Association, New Hampshire Charitable Foundation, New Hampshire Community Action Program, New Hampshire Department of Environmental Services, New Hampshire Electric Cooperative, Inc., New Hampshire Energy Management, Public Service Company of New Hampshire, George E. Sansoucy, Save Our Homes Organization, Suncook Energy Corporation, Sweetheart Cup Company Inc., UNITIL System Companies, UtiliCorp United Inc., Wheeled Electric Power Company, and Certain Wood-Fired Qfs. In addition, several residential customers filed comments. APPENDIX D New Load Criteria Large commercial and industrial customers who locate in a franchised utility's service territory on or after March 1, 1996 and who would otherwise be served under the following rate schedules may participate in the Pilot. * Concord Electric Company - G1, G2, G4, QRWH and Off-Peak WH * Connecticut Valley Electric - GV, and G-T * Exeter & Hampton Electric - G1, G2, G4, QRWH and Off-Peak WH * Granite State Electric - G1, T and V * New Hampshire Electric Coop - G, PG, PGI * Public Service of New Hampshire - GV, LG APPENDIX E Determination Of Hourly Loads For NEPOOL Billing In the event that hourly recording meters are uneconomic or cannot be installed prior to the initiation of the Pilot, existing meters may be utilized and the hourly loads calculated in the following manner: Supplier shall be required to include the load at each account it serves, including losses, in its own-load dispatch at NEPOOL. The reporting of loads for own- load dispatch purposes will be accomplished by the following: 1) Each account will be assigned to a customer class. A customer class would consist of a group of customers with similar load shape characteristics. 2) Each customer class will have an assigned load profile which is based on historical load profile data for customers in the class. For the Pilot, this load profile will be approved for its accuracy by the NHPUC. The load profile for each class shall consist of 24 separate profiles which represent average hourly load profiles for typical day types of the week for each month of the year (e.g, average weekdays in March). 3) Each account will be assigned a Usage Factor which represents the relative usage of the account versus the customer class. The Usage Factor would equal the quotient of (i) the actual total energy consumption of the account for the previous twelve months, expressed in kilowatt-hours divided by (ii) the total energy from the load profile for the customer class for a twelve month period, expressed in kilowatt-hours. For example, if a Non-Electric Heat Residential account had actual usage of 5,986 kWh for the past twelve months and the load profile for the class shows an average twelve month usage of 6,000 kWh, then the Usage Factor for this account would equal 0.998. 4) Each day the distribution utility (Disco) shall read the meter at the Transmission Delivery Point to obtain the hourly loads (TDPL). These loads will then be divided between each supplier based on the customers they serve to determine own-load responsibilities at NEPOOL. 5) For customers with direct access metering equipment, Disco shall remotely access the meter for each account once per day and read the hourly load data for the previous day (Monday's load will be accessed on Tuesday, Tuesday's load will be accessed on Wednesday, Wednesday's load will be accessed on Thursday, Thursday's load will be accessed on Friday, and loads for Friday, Saturday and Sunday will be accessed on Monday); The adjusted load value at the Transmission Delivery Point shall equal the product of: (i) the demand at the meter as measured in kilowatts; and (ii) the Metering Voltage Adjustment Factor expressed as a decimal; and (iii) the Distribution Loss Factor expressed as a decimal. The Metering Voltage Adjustment Factor shall equal 1.00 if meter is located on the secondary side of customer's transformer and shall equal 0.99 if meter is located on the primary side of the Customer's transformer. 6) Disco shall determine the total load allocated to each supplier at the Transmission Delivery Point from direct access meters. DAMLs = _mc=1 DAMRs,c * (1 + Distr. Loss Factor)* (1 + Meter Adj. Factor) Where DAML means Direct Access Meter Load and DAMR means Direct Access Meter Reading. 7) Disco shall determine the total load at the Transmission Delivery Point from all suppliers from direct access meters. DAML = _ns=1 DAMLs 8) Disco shall determine the total load at the Transmission Deliver Point which is to be allocated to non-direct metered loads (NDAML). NDAML = TDPL - DAML 9) Disco shall determine the initial total load at the Transmission Delivery Point which is allocated to each supplier from non-direct access meter loads. INDAMLs = _pk=1 Ns,k * LPk * (1 + Distr. Loss Factor) where INDAML means initial non-direct access meter load, N number of customers per supplier per customer class and LP the load profile for the customer class. 10) Disco shall determine the initial total load which is allocated to all suppliers. INDAML = _ns=1 INDAML 11) Disco shall adjust the total initial total loads to get the final loads allocated to each supplier at the Transmission Delivery Point from non- direct access metered loads. NDAMLs = INDAMLs * (NDAML/INDAML) 12) Disco shall determine the total allocated to each supplier at the Transmission Delivery Point. LOADs = DAMLs + NDAMLs 13) As a check: TDPL = _ns=1 LOADs The loads assigned to each supplier shall be adjusted for actual sales as determined by the meter readings. Forty five (45) days after the end of each month, Disco shall calculate a total adjustment for each calendar month. This will be done by scaling the estimated hourly loads to the metered usage and allocating any difference from the NDAML prorata and multiplying by the Metering Adjustment Factor and Distribution Loss Factor. The total adjusted load will be determined for each supplier and compared to the total load assigned to each supplier for the month. Any differences will be reconciled amongst suppliers at the average NEPOOL cost of supply for the month. A supplier who had more sales than was assessed would pay the difference at the average lambda rate whereas a supplier that was assessed more than the recorded sales would be credited the difference at the average lambda rate. -----END PRIVACY-ENHANCED MESSAGE-----