DF 98-035
                                     
                TILTON & NORTHFIELD AQUEDUCT COMPANY, INC.
                                     
       Petition for Authority to Issue Securities and Increase Rates
                                     
              Order NISI Approving Financing and Stipulation
                                     
                         O R D E R   N O.  22,908
                                     
                              April 28, 1998

         The Petitioner, Tilton & Northfield Aqueduct Company,
Inc. (TNA or the Company), was authorized by the New Hampshire
Public Utilities Commission (Commission) in dockets DF 95-185 and
DF 96-210 to issue securities in an amount not to exceed
     $4,159,889 pursuant to RSA 369.  The funds were expended to
     construct gravel packed wells in Northfield, a new transmission
     system, reservoirs and other plant to comply with the Surface
     Water Treatment Rule of the Safe Drinking Water Act (SDWA).  The
     use of the funds was found to be prudent by the Commission. 
     Order No. 21,876 (October 24, 1995) and Order No. 22,296 (August
     27, 1996).   
         On December 31, 1997, Phase I of the project was
     completed and the new wells and transmission system were placed
     in service.  Those system improvements resulted in slightly
     increased water pressure which caused numerous failures in
     "cement-tin" mains located in the Towns of Tilton and Northfield
     which were installed one hundred years ago.  The main failures
     were not determined to be an engineering risk during the planning
     phase of the SDWA compliance project, and have resulted in
     customers in the affected areas being without water for
     substantial periods of time.
         On February 11, 1998, TNA filed a petition with the
     Commission, pursuant to RSA 369, requesting authority to borrow
     an additional $2,319,439 to replace the cement-tin mains and to
     upgrade a substantial amount of undersized mains, thereby
     improving system reliability.  By letter dated March 18, 1998,
     the Company decreased its requested borrowing authority to
     $1,230,000 to target only those mains in most immediate need of
     replacement.  The revised request covered replacement of only the
     cement-tin mains and 2 inch mains located on Watson Street and
     Route 132 in Northfield.
         TNA has filed an application with the New Hampshire
     Department of Environmental Services (NHDES) requesting State
     Revolving Loan Fund (SRF) financing for the main replacement
     project.  The Company is on the funded portion of the NHDES list
     of projects to receive SRF financing at a twenty year fixed rate
     of 4.216%, subject, in part, to the prior approval by the
     Commission to issue the securities and to increase rates to
     service the resultant debt.  
         On April 10, 1998, TNA and Staff executed an Agreement
     resolving all of the issues in this proceeding.  The Agreement
     stipulates that the proposed use of the funds is in the public
     interest and prudent, and further provides that TNA shall receive
     the necessary funds to service the resultant debt once the
     proposed plant is placed in service.  The Agreement also concurs
     in the terms of the financing; however, as of the date of the
     Agreement, the terms and conditions were recommendations of the
     New Hampshire Business Finance Authority and were not yet
     finalized.  The Company agrees to submit the final terms to the
     Commission as soon as they are available.  TNA's March 18, 1998
     letter also indicated that it had been identified as a
     "disadvantaged water company" which makes it eligible to receive
     principal reduction payments of between 15% to 30% of the loan
     amount. 
         Staff has reviewed the proposed terms and conditions of
     the financing as they currently are proposed and finds them to be
     just and reasonable and in the public interest.  Staff has also
     reviewed the proposed use of the funds and believes such use to
     be prudent.  Based upon Staff's review and the Agreement, we find
     the proposed use of the funds to be prudent and in the public
     interest and the terms and conditions of the loan just and
     reasonable.  
         We believe the Company should vigorously pursue the
     principal reduction and any other avenues that will assist it in
     reducing its cost of debt and, therefore, rates to its customers.
     The Company shall keep the Commission informed of all such
     efforts.  If the final terms and conditions of the SRF financing
     vary materially from those outlined in the Agreement; however, we
     reserve the right to revisit any borrowing authority provided
     under this order.
         Based upon the foregoing, it is hereby 
         ORDERED NISI, that, pursuant to RSA 369, TNA is
     authorized to borrow up to $1,230,000 under the terms and
     conditions set forth in the Stipulation and the forgoing order;
     and it is
         FURTHER ORDERED, that the proposed use of these funds
     is prudent as presented; and it is
         FURTHER ORDERED, that pursuant to N.H. Admin. Rules,
     Puc 1604.03 or Puc 1605.03, the Petitioner shall cause a copy of
     this Order Nisi to be published once in a statewide newspaper of
     general circulation or of circulation in those portions of the
     state where operations are conducted, such publication to be no
     later than May 5, 1998 and to be documented by affidavit filed
     with this office on or before May 12, 1998; and it is
         FURTHER ORDERED, that all persons interested in
     responding to this petition be notified that they may submit
     their comments or file a written request for a hearing on this
     matter before the Commission no later than May 19, 1998; and it
     is
         FURTHER ORDERED, that any party interested in
     responding to such comments or request for hearing shall do so no
     later than May 26, 1998; and it is
         FURTHER ORDERED, that this Order Nisi shall be
     effective May 28, 1998, unless the Commission provides otherwise
     in a supplemental order issued prior to the effective date; and
     it is
         FURTHER ORDERED, that the Petitioner shall file an
     accounting with this Commission, each January 1 and July 1, duly
     sworn to by its Treasurer, showing the disposition of the
     proceeds of this financing, until said proceeds are fully
     expended.
         By order of the Public Utilities Commission of New
     Hampshire this twenty-eighth day of April, 1998.
     
                                                                     
        Douglas L. Patch    Bruce B. Ellsworth        Susan S. Geiger
            Chairman           Commissioner            Commissioner
     
     Attested by:
     
     
     
                           
     Claire D. DiCicco
     Assistant Secretary