DR 98-012 GRANITE STATE ELECTRIC COMPANY Offer of Settlement Procedural Order O R D E R N O. 22,886 March 30, 1998 APPEARANCES: Carlos A. Gavilondo, Esq., for Granite State Electric; F. Anne Ross, Esq., for Retail Merchants Association of New Hampshire; Wynn E. Arnold, Esq., for the Governor's Office of Energy and Community Services; Rep. Jeb E. Bradley and Rep. Clifton Below; Henry Veilleux for the Business and Industry Association; Patricia Gregg for Network Publications; Susan L. Geiser, Esq., for UNITIL; Robert A. Backus, Esq., for Campaign for Ratepayer Rights; Steven V. Camerino, Esq., for Great Bay Power; David W. Marshall, Esq., for the Conservation Law Foundation; Elizabeth I. Goodpastor, Esq., for City of Manchester, New Hampshire; James Monahan, for the Dupont Group and Cabletron; Donna C. Sharkey, Esq., for Enron Energy Services; Gerald M. Eaton, Esq., for Public Service Company of New Hampshire; Paul Gromer, for Northeast Energy Efficiency Council; D. Dickinson Henry, for the Electric Utility Restructuring Collaborative; James T. Rodier, Esq., for himself; Sylvester Swierzy for EnerDev, Inc. and the Granite State Taxpayers Association; P. Aalto for PJA Energy Systems; Michael W. Holmes, Esq., for the Office of the Consumer Advocate; and Eugene F. Sullivan, III, Esq. and Robert J. Frank, Esq., for the Staff of the New Hampshire Public Utilities Commission. I. PROCEDURAL HISTORY On February 3, 1998, Granite State Electric (GSE) filed an Offer of Settlement relative to restructuring of the electric utility industry as it affects GSE and its customers. The New Hampshire Public Utilities Commission (Commission) issued an Order of Notice on February 11, 1998 requiring that a prehearing conference to consider the issues be held on February 27, 1998; that parties wishing to intervene must do so by February 24, 1998; and that parties wishing to object to petitions to intervene file objections by February 26, 1998. Motions to Intervene were made by the Retail Merchants Association of New Hampshire (RMA), the Governor's Office of Energy and Community Services (ECS), Rep. Jeb Bradley, Rep. Clifton Below, the Business and Industry Association (BIA), Network Publications, UNITIL, the Campaign for Ratepayer Rights(CRR), Great Bay Power (Great Bay), the Conservation Law Foundation (CLF), the City of Manchester, New Hampshire (Manchester), The Dupont Group/Cabletron (Cabletron), Enron Energy Services (Enron), Public Service Company of New Hampshire (PSNH), the Northeast Energy Efficiency Council (NEEC), James T. Rodier, Esq., EnerDev, Inc. (Enerdev), the Granite State Taxpayers Association (Taxpayers), and PJA Energy Systems (PJA). All motions to intervene were granted at the prehearing conference. (Tr. February 27, 1998, p. 12) On March 9, 1998, GSE filed a proposed scoping stipulation for the subject dockets which was supported by Granite State Taxpayers, EnerDev, the Restructuring Collaborative, BIA, Rep. Bradley and Rep. Below. On March 10, 1998, Staff filed a Memorandum in Support of Motion to Consolidate, which was supported by RMA and Enron. GSE submitted a response on March 11, 1998, which it characterized as a clarification of the record, reiterating their position that consolidation was unnecessary and would not promote the orderly and efficient conduct of either proceeding. II. POSITIONS OF THE PARTIES A. Issues The Order of Notice stated that the Offer of Settlement raised, inter alia, three issues: 1) whether the settlement complies with the requirements of RSA 374-F and the Commission's policies related thereto; (2) how the settlement relates to Granite State's filing in DR 97-251 relative to the transfer of New England Power's generating facilities in New Hampshire; and, (3) whether implementation of the settlement is in the public interest. GSE contends that its Offer of Settlement complies with RSA 374-F inasmuch as, among other things, it will provide retail choice and deliver near term rate relief. Moreover, GSE contends the settlement is in the public interest because, e.g., it supports low income customers as well as environmental and conservation programs. Finally, GSE suggests that the settlement is separable from the transfer which is the subject of DE 97-251. The following parties expressed support for the settlement and the separation of the transfer and settlement dockets, namely, Enerdev and the Granite State Taxpayers Association, the BIA, the Restructuring Collaborative, CRR, Representatives Below and Bradley, CLF, and the Governor. Other parties, PSNH, Unitil and PJA, for instance, indicated their intent to monitor the progress of the proceedings or their concern for precedential effects. The City of Manchester, Enron, Great Bay, the RMA, and the OCA, however, pointed out specific concerns created by the settlement. A number of those parties, and Staff as well, expressed the opinion that the settlement and transfer proceedings were inextricable. B. Motion for Consolidation and Scoping Stipulation GSE attempted to resolve the issue of the interrelationship between the transfer docket, DE 97-251, and the settlement docket, DR 98-012, by suggesting that the parties work towards a stipulation on scoping to segregate issues between the proceedings. Nonetheless, the RMA moved orally to consolidate the dockets, assuming a stipulation were not achieved, and was supported by Enron in that motion. The Commission directed that a stipulation on scoping be filed by March 6, 1998 and that in the event a stipulation could not be achieved that recommendations for further action be submitted by March 10, 1998. Agreement of all the parties was not forthcoming and, on March 10, 1998, GSE filed a proposed stipulation agreed to by the Governor, Representative Below, Enerdev, Granite State Taxpayers Association, CRR, CLF, BIA, NEEC, PSNH, Great Bay, Mr. Rodier, Unitil, Cabletron, and the Restructuring Collaborative. PJA took no position while Enron, Staff, the OCA and the RMA opposed the stipulation. GSE explained that "[p]ursuant to the Scoping Stipulation, any determination by the Commission in the context of the transfer proceeding in Docket No. DE 97-251 would not prejudice the Commission's ability to consider and decide, or the ability of any party to raise, any issue with respect to the Offer of settlement pending in Docket No. DR 98-012." GSE also contends there is no evidentiary reason for consolidation and that delay caused by consolidation will deprive customers of substantial benefits. On March 10, 1998, Staff and the RMA filed memoranda supporting the motion to consolidate. Staff contends that the transfer and settlement dockets are fundamentally intertwined and that various findings required in the transfer docket presuppose information or elements of the settlement docket. The RMA, joined by the City of Manchester and the OCA, argues similarly and notes as well the efficiency of consolidation. C. Procedural Schedule At the prehearing conference, there was considerable discussion regarding the procedural schedule for the transfer docket, DE 97-251, and the settlement docket, DR 98-012. The parties agreed to the schedule for the transfer docket, which was set out in the Order of Notice in that proceeding. As for the schedule for the settlement docket, an agreement in principle was reached dependent on the ability to fashion a stipulation on scope. The procedural schedule submitted to the Commission for the settlement docket follows: March 9, 1998 Testimony in Support March 23, 1998 Data Requests to Parties Supporting Settlement March 30, 1998 Data Responses April 15, 1998 Testimony in Opposition April 22, 1998 Data Requests to Parties Opposing Settlement April 30, 1998 Data Responses May 11, 1998 Rebuttal Testimony May 26 - 29, 1998 Hearings (beginning 10:00 a.m. daily) III. COMMISSION ANALYSIS Inasmuch as the scoping stipulation was not agreed to by all the parties, we must address the motion for consolidation. The RMA, Staff and others argue that certain issues can only be adequately reviewed if the dockets are consolidated. For instance, Staff is concerned that if the transfer were approved without a ruling on the settlement, customers would be at risk to pay higher rates through GSE's wholesale purchase agreement. With respect to this specific concern, GSE notes that the New England Power FERC filing contains a commitment to a rate freeze for GSE. We do not believe that the parties favoring consolidation have shown that the transfer and settlement issues are so inextricable that we should not proceed with the schedule already established for the transfer proceeding by Order No. 22,489 in Docket No. DE 97-251 nor adopt the independent schedule set forth above for the settlement proceeding, Docket No. DR 98-012. Moreover, the scoping stipulation appears to adequately address concerns that a ruling in the transfer docket would prejudice the interests of customers or the public interest generally. Accordingly, we deny the motion for consolidation and approve the scoping stipulation. While we conclude that the better course at this time is to move ahead on separate tracks for the two proceedings, we nevertheless put the parties on notice that we have the authority to modify the procedural schedule in either proceeding in the event issues in one docket are implicated by issues in the other docket. Ultimately, GSE as the petitioner in these two proceedings carries the burden of proving the representations it has made to date and if its representations that consolidation is unnecessary prove to be wrong then we will exercise our authority to, among other things, revise the procedural schedules or require consolidation. Based upon the foregoing, it is hereby ORDERED, that the various motions to intervene as discussed above are GRANTED; and it is FURTHER ORDERED, that RMA's motion to consolidate Docket No. DE 97-251 and Docket No. DR 98-012 is DENIED; and it is FURTHER ORDERED, that the Scoping Stipulation filed by GSE on March 10, 1998 is APPROVED; and it is FURTHER ORDERED, that the procedural schedule for Docket No. DE 97-251 set forth in Order No. 22,849 (February 17, 1998) is RATIFIED; and it is FURTHER ORDERED, that the procedural schedule set forth above for Docket No. DR 98-012 is APPROVED. By order of the Public Utilities Commission of New Hampshire this thirtieth day of March, 1998. Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger Chairman Commissioner Commissioner Attested by: Thomas B. Getz Executive Director and Secretary