DR 97-157 DR 97-175 Exeter and Hampton Electric Company, Inc./ Concord Electric Company, Inc. Petitions to Provide Back-Up, Stand-by and Supplemental Services Order Rejecting Proposed Tariffs O R D E R N O. 22,902 April 13, 1998 I. PROCEDURAL HISTORY On August 4, 1997, Exeter & Hampton Electric Company (Exeter & Hampton) filed with the New Hampshire Public Utilities Commission (Commission) a proposed rate schedule "Back-up Service Classification B" pursuant to RSA 378:1 and a request for a Declaratory Ruling on Applicability, for which the Commission opened docket number DR 97-157. On August 27, 1997, Concord Electric Company (Concord Electric) filed a petition to offer a new back-up service similar to the Exeter & Hampton petition, for which the Commission opened docket number DR 97-175. Under the respective tariffs, the proposed service would be available to "generation facilities for station service purposes, where customer provides capacity and energy sufficient to meet Customer's needs . . . ." Exeter and Hampton and Concord Electric (collectively the Unitil Companies) would provide "for the delivery of energy and capacity, to be purchased by the customer from a third party supplier. . . ." Initial Memorandum of the Unitil Companies at 1. In its petitions, the Unitil Companies also requested a declaratory ruling that the proposed services will apply to Seabrook Station and Merrimack Station and their campus loads. These loads are currently located within the boundaries of the service territories of Exeter and Hampton and Concord Electric, respectively but the loads are served by Public Service Company of New Hampshire (PSNH), the owner of Merrimack Station and the sister company of the lead owner of Seabrook Station. Concord Electric also provides service to SES Concord under a special service agreement no longer in effect. Concord Electric seeks a determination that the proposed tariff should apply to back-up, stand-by and supplemental services supplied to SES Concord. On September 2, 1997, the Commission issued Order No. 22,698 (September 2, 1997) suspending the proposed tariff of Exeter & Hampton in DR 97-157 and the proposed tariff of Concord Electric in DR 97-175, scheduling a prehearing conference for September 17, 1997, and setting a deadline for intervention requests. On September 8, 1997, Concord Regional Solid Waste/Resource Recovery Cooperative (Cooperative) filed a Motion to Intervene in DR 97-175. All jurisdictional utilities were made mandatory parties by Order No. 22,698. By Order No. 22,742 (September 29, 1997), the Commission granted the Cooperative's Motion to Intervene and established a procedural schedule for discovery and to consider memoranda of law from the parties. On October 29, 1997, the Commission received legal memoranda from Exeter and Hampton, Concord Electric and PSNH. On November 12, 1997, the Commission received reply memoranda from Exeter and Hampton, Concord Electric and PSNH. II. POSITIONS OF THE PARTIES AND STAFF A. Exeter and Hampton/Concord Electric The Unitil Companies argued that because the generation facilities are located in their service territories they have the right to provide service to the facilities, and the facilities are obligated to take service from them under the proposed tariffs. The Unitil Companies also argued that although PSNH has provided station service to Merrimack Station and Seabrook Station since their construction they have never been authorized to provide that service by the Commission under RSA 374:22 and 374:26. Thus, the Unitil Companies contended that the Commission should require the facilities to take the proposed services from the respective franchised utility. B. PSNH PSNH argued that under both tariffs the respective utilities would not own, operate or manage any plant or equipment for the conveyance of electricity to the public and, therefore, neither Company was acting as a New Hampshire public utility under the tariffs. RSA 362:2. PSNH further argued that franchise rights are not exclusive, as a matter of law, in New Hampshire and that PSNH should be allowed to continue to provide station service to these facilities under the public interest standards of RSA 374:22 and 374:26 to the extent that authority has not already been granted by the Commission. III. COMMISSION ANALYSIS The issues for our consideration are whether Seabrook Station, Merrimack Station and SES Concord are required to take service under the tariffs from respectively, Exeter and Hampton and Concord Electric and, if so, whether the proposed tariffs are just and reasonable pursuant to RSA 378:7. With respect to Merrimack Station and Seabrook Station, we conclude that it would not serve the public interest to require the generating stations to take service from the Unitil Companies. As recognized by both PSNH and the Unitil Companies, service territories are not exclusive as a matter of law in New Hampshire. Appeal of Public Service Company of New Hampshire, 141 N.H. 13 (1996). Whether more than one utility should be allowed to provide service in a particular service territory or to a particular customer in that service territory under particular circumstances is a question of fact and policy for the Commission's resolution. Id. In reaching its decision, the Commission must also determine which alternative or alternatives best serves the public interest or the public good. Id., (applying RSA 374:26). Thus, in the case at hand we have examined what facilities are in place to serve the load, what new facilities would be required to serve the load and which utility presents the rational and logical means to providing service, in light of the investments that have been made and that are already in place. See eg., Re Exeter and Hampton Electric Company/Hall Farm Realty Trust, Order No. 22,663 (July 21, 1997); Re Exeter and Hampton Electric Company/Kingston-Warren Corporation, Order No. 22,697 (September 2, 1997). In this case, the facilities being used to provide back-up, stand-by and supplemental service to Seabrook and Merrimack stations are the same facilities used for the generation and transmission of energy when the plants are operating. Thus, the rational and logical means of providing these services, that avoids the construction of redundant facilities, is the continued provision of these services under the current arrangement. We note that this case differs from other cases we have addressed regarding the issue of franchise exclusivity because it is the franchised utility requesting an order from the Commission requiring a customer to take its service, rather than a customer requesting service from a different utility. Moreover, it is undisputed that neither Exeter & Hampton nor Concord Electric owns or operates the necessary facilities to deliver the required capacity and energy to Seabrook Station or Merrimack Station. Thus, we do not accept the definition of "service" the Unitil Companies would provide to customers subject to this tariff. The Unitil Companies are, in effect, asking us to approve a charge to a customer for nothing more than the customer's presence in its service territory. We will not approve such a charge. With regard to SES Concord, which does use Concord Electric facilities to receive service, we cannot conclude that the proposed back-up, stand-by and supplemental service tariff would be just and reasonable. Initially, the tariff would require SES Concord to take service for a minimum of three years. Given the advent of competitive generation services, we find this provision anti-competitive and, therefore, not just or reasonable. We also question the requirement that SES Concord purchase its own energy and capacity for transmission and distribution to its facility when no other customer is required or allowed such a choice under any other Unitil Company tariff. See, RSA 378:10 With regard to the expired special contract under which Concord Electric is providing service to SES Concord, the special contract was in effect for one year while SES Concord was allowed to determine whether it wanted back-up, stand-by and supplemental service, or station service. The contract terminated in 1990 and Concord was required by the Commission to file a tariff or special contract to provide service to SES Concord in 1990. Re Concord Electric Company, 74 NH PUC 122, 123 (1989). To date, we have received no such contract or tariff filing from Concord Electric to provide service to SES aside from this filing which has been suspended and rejected herein. Concord Electric shall file a special contract reflecting the rates, terms and conditions of service for effect in the provision of service to SES Concord. Based upon the foregoing, it is hereby ORDERED, that Exeter and Hampton Electric Company, Inc.'s proposed tariff pages NHPUC No. 17 - Electricity, Original Page 40-S and Original Page 40-T are REJECTED; and it is FURTHER ORDERED, that Concord Electric Company, Inc.'s proposed tariff pages NHPUC No. 12 - Electricity, 40-R and 40-S are REJECTED; and it is FURTHER ORDERED, that Concord Electric Company, Inc. shall file a special contract reflecting the rates, terms and conditions of service for effect in providing service to SES Concord. By order of the Public Utilities Commission of New Hampshire this thirteenth day of April, 1998. Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger Chairman Commissioner Commissioner Attested by: Thomas B. Getz Executive Director and Secretary