DE 98-138 New Hampshire Electric Cooperative/Granite State Electric Petition to Establish Parallel Service in Joint Service Territory Order Adopting Procedural Schedule O R D E R N O. 23,076 December 7, 1998 APPEARANCES: Dean, Rice and Kane by Mark X. Dean, Esq. on behalf of the New Hampshire Electric Cooperative, Inc.; Carlos X. Gavilondo, Esq. on behalf of Granite State Electric Co., Inc., Gerald M. Eaton, Esq. on behalf of Public Service Company of New Hampshire, Inc.; Dr. Robert Cimis on behalf of himself and other residents; Eugene F. Sullivan III, Esq. for the Staff of the New Hampshire Public Utilities Commission. I. PROCEDURAL HISTORY On January 28, 1998, Dr. Robert Cimis filed a complaint with the New Hampshire Public Utilities Commission (Commission) on behalf of himself and numerous neighbors concerning the quality of service provided in the Methodist Hill area of the Town of Enfield, New Hampshire by the New Hampshire Electric Cooperative, Inc. (NHEC). Dr. Cimis complained that he and his neighbors experienced numerous electric outages while nearby customers of Granite State Electric (Granite State) did not experience these outages. Dr. Cimis requested that he and his neighbors be allowed to receive service from Granite State thereby allowing them to receive the same quality of service provided nearby commercial customers of Granite State. Commission Staff attempted to bring the matter to a consensual resolution through the adjustment of service territory lines between Granite State and NHEC. See DE 95-290. These attempts ultimately proved unsuccessful, culminating in a vote of the NHEC Board of Directors to oppose any readjustment of the service territory lines in the Methodist Hill area. On October 27, 1998, the Commission issued an Order of Notice initiating an investigation into the adequacy of service provided in the Methodist Hill area of Enfield and whether a transfer of the territory was in the public interest. The Order of Notice made NHEC, Granite State, Public service Company of new Hampshire (PSNH) mandatory parties and scheduled a prehearing conference for November 19, 1998. NHEC, Granite State, PSNH, Dr. Cimis and a number of residents of Methodist Hill and Staff appeared at the prehearing conference. NHEC, Granite State and PSNH stated that they had entered into an agreement that would resolve the issue of the adequacy of service provided to the residential customers and presented an outline of the agreement. The agreement provided that Granite State would continue to serve all existing and new "three phase" customers in the Methodist Hill area while NHEC would continue to serve all existing and new single phase customers in the same service area. NHEC would no longer provide service from the distribution line currently providing service, however, which is the cause of the numerous service outages. Rather, NHEC and Granite State would establish a new single phase delivery point in the Methodist Hill area of the GSEC system. Dr. Cimis and the residents expressed general dissatisfaction with the quality of service they are receiving which consisted of numerous outages while they could see the lights of the commercial establishments served by Granite State. The customers also objected to the rate discrimination that would result from the proposed agreement. That is, the customers did not believe it was appropriate that they should pay NHEC rates while commercial customers received substantially lower charges from Granite State. Staff also objected to the proposed settlement because it would create unnecessarily redundant distribution systems in the Methodist Hill area and is inconsistent with the planning practices for the distribution system reorganization set forth by NHEC and Granite State in DE 95-290 that resulted in Granite State providing three phase service in the Methodist Hill area. See, Re New Hampshire Electric Cooperative, Inc. 80 NH PUC 732 (1995). The utility parties, at the request of the presiding Commissioner, agreed that NHEC and Granite State would establish the new delivery point in the Methodist Hill area within two weeks of the prehearing conference via which NHEC will draw power from the GSEC system on a temporary basis, pending the outcome of the hearing on the merits, so that service quality to the affected residents can be substantially corrected, and not wait until the final disposition of the case. The utility parties agreed that they could implement this reinforcement of the physical delivery system (and make interim arrangements for the wholesale pricing and relative rights and obligations of the utilities) for a de minimus cost, and would agree to reserve the question of the merits of their proposed settlement until the hearing on the merits. Following the prehearing conference the parties and Staff concurred in the following procedural schedule to govern the Commission's investigation into this matter: Joint testimony NHEC/GSEC December 9, 1998 Data requests for NHEC/GSEC (via facsimile) December 14, 1998 Data responses from NHEC/GSEC December 21, 1998 Staff testimony January 4, 1999 NHEC and GSEC separate rebuttal testimony January 11, 1999 Hearing on the merits January 14, 1999 II. COMMISSION ANALYSIS We find the proposed procedural schedule to be reasonable and will approve it as filed. With regard to the issue of service, we believe the parties need to address the Commission's decision in Re New Hampshire Electric Cooperative, Inc. 80 NH PUC 732 (1995) in their testimony. We also find that the interim arrangement under which NHEC will draw power from the GSEC system on a temporary basis pending the outcome of the hearing on the merits is appropriate and reasonable. Based upon the foregoing, it is hereby ORDERED, the procedural schedule set forth above is APPROVED; and it is FURTHER ORDERED, that the interim arrangement described above is approved. By order of the Public Utilities Commission of New Hampshire this seventh day of December, 1998. Douglas L. Patch Nancy Brockway Chairman Commissioner Attested by: Thomas B. Getz Executive Director and Secretary