DR 98-192
            Connecticut Valley Electric Company Inc.
  1999 Conservation and Load Management Percentage Adjustment
     Order Addressing Interventions and Procedural Schedule
                    O R D E R   N O.  23,103
                        January 11, 1999
       APPEARANCES:  Kenneth C. Picton, Esq., for Connecticut
     Valley Electric Company Inc.; Heidi L. Kroll for the Governor's
     Office of Energy and Community Services; Kenneth E. Traum for the
     Office of the Consumer Advocate for residential ratepayers; and
     Michelle A. Caraway, Paul S. Keller, and James J. Cunningham, Jr.
     for the Staff of the New Hampshire Public Utilities Commission. 
       On November 4, 1998, Connecticut Valley Electric
     Company Inc. (CVEC) filed with the New Hampshire Public Utilities
     Commission (Commission) its Proposal for 1999 Conservation and
     Load Management (C&LM) Percentage Adjustment (C&LMPA).  CVEC is
     proposing a 1999 C&LMPA which is substantially composed of the
     collection of the net present value of the net revenue loss for
     the 1999-2024 period.  CVEC ramped down the C&LM programs in
     CVEC's service territory during 1997, as ordered by the
     Commission in Order No. 22,536 (March 31, 1997).  The proposed
     1999 C&LMPA recovers no direct program spending, only the net
     present value of future net revenue loss, as well as 1999
     administrative costs and prior period over/undercollections.  The
     1999 C&LMPA is also proposed to be applicable only to off-season
     billings in the March through November 1999 period.  No C&LMPA
     billing is proposed for the peak season months of January,
     February, and December 1999.  The proposed C&LMPAs are 2.32% for
     the residential rate class and 4.37% for the commercial and
     industrial rate class.
       By an Order of Notice issued November 30, 1998, the
     Commission scheduled a prehearing conference for January 4, 1999,
     set deadlines for intervention requests and objections thereto,
     outlined a procedural schedule, and required the parties and
     Commission Staff (Staff) to summarize their positions with regard
     to the filing for the record.  On December 30, 1998, the
     Governor's Office of Energy and Community Services (ECS) filed a
     late Motion for Full Intervention.  There were no objections to
     ECS' motion to intervene.  The Office of the Consumer Advocate
     (OCA) is a statutorily recognized intervenor. 
       At the prehearing conference, CVEC, ECS, OCA, and Staff
     modified certain dates of the procedural schedule as outlined in
     the Order of Notice.  The revised procedural schedule agreed to
     is as follows:
                   Data Requests by Staff and                January 8, 1999 
              Company Data Responses                   January 15, 1999 
              Technical Session                        January 20, 1999 
              Testimony by Staff and                   January 25, 1999 
              Data Requests by the Company             January 28, 1999 
              Data Responses by Staff and              February 1, 1999 
              Settlement Conference                    February 5, 1999 
              Filing of Settlement Agreement,         February 16, 1999 
                      if any
              Hearing                                 February 18, 1999 
       At the prehearing conference, in accordance with the
     Order of Notice, CVEC, ECS, OCA and Staff stated their positions
     with regard to the filing for the record.  CVEC stated that it
     proposes no C&LM programs for 1999.  CVEC proposed an
     acceleration of the recovery of net revenue loss on a net present
     value basis, all such recovery to be completed by November 1999.
       ECS stated that it has conducted a preliminary review
     of CVEC's recent filing.  ECS is concerned about CVEC's proposal
     to accelerate the recovery of the net revenue loss for the period
     1999 through 2024.  ECS stated that it was not clear what amount
     of lost fixed cost recovery, if any, might be appropriate in a
     restructured industry.  ECS stated that the Commission has asked
     the Energy Efficiency Working Group (Working Group) to consider
     this issue, among many others.  ECS stated that the accelerated
     recovery could provide CVEC with the opportunity to double
     recover certain costs, i.e., costs that it might also recover in
     future rate cases or through potential future stranded cost
     recovery charges.  ECS is concerned that the proposed net revenue
     loss might include lost generation revenues that a transmission
     and distribution company might not be in a position to collect. 
     Furthermore, if CVEC's proposal were adopted, ECS is concerned
     that CVEC would have a greater assurance of cost recovery than it
     would have under traditional ratemaking.  ECS is troubled that
     CVEC has phased out its entire portfolio of C&LM programs and
     that it is not proposing to offer any programs in 1999.  ECS
     feels strongly that if funds are going to be collected from
     ratepayers, then there should be C&LM programs available to
     ratepayers to help them lower their bills. 
       OCA stated that its concerns include: (1) whether there
     are programs that could be offered cost-effectively; (2) whether
     there are programs that could be offered to low-income customers;
     and (3) whether educational programs should be offered.  OCA
     stated that it was unaware of what information CVEC possessed,
     including any analyses CVEC has completed, concerning the
     benefits of such potential programs.  OCA also expressed concern
     about the acceleration of net revenue loss as a concept. 
     Further, OCA was unsure whether it supports billing for C&LM in
     the off-season, if the benefits, theoretically, will be aimed
     primarily at the peak season.
       Staff is also unsure whether it is appropriate for the
     Commission to approve the accelerated recovery of the lost net
     revenue stream as CVEC has proposed until such time as the
     Working Group has completed its deliberations.  Staff has
     concerns regarding the assumptions that were used to net present
     value the revenue stream, including the inflation and discount
     rates.  Staff stated that the Commission allowed CVEC to use 1997
     to phase out its programs and believes that it is not the best
     use of ratepayers' money at this time to require CVEC to
     reintroduce programs that may or may not be appropriate in the
     future.  Staff recommended that no C&LM programs be offered until
     the Working Group, which was established in Docket DR 96-150, has
     completed its deliberations and has provided its recommendations
     to the Commission.  At the time the Commission rules upon those
     recommendations, Staff believes that it would be entirely
     appropriate for CVEC to consider the effects of the Commission's
     order regarding energy efficiency programs on CVEC and to request
     approval for C&LM programs consistent with the Commission's
       We find the proposed procedural schedule, as modified
     by the parties and Staff, to be reasonable and will, therefore,
     approve it for the duration of the case.  Additionally, we will
     grant the late Motion for Full Intervention filed by ECS.
       Based upon the foregoing, it is hereby 
       ORDERED, that the procedural schedule delineated above
     is APPROVED; and it is 
       FURTHER ORDERED, that the Motion for Full Intervention
     filed by the Governor's Office of Energy and Community Services
     is GRANTED.
       By order of the Public Utilities Commission of New
     Hampshire this eleventh day of January, 1999.
           Douglas L. Patch       Susan S. Geiger     Nancy Brockway
               Chairman           Commissioner          Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary