DR 97-183


                1997 Conservation and Load Management Programs

                          Order Approving Stipulation

                            O R D E R  N O. 22,813

                               December 31, 1997

          APPEARANCES: Catherine E. Shively, Esq.,for Public
Service Company of New Hampshire; David W. Marshall, Esq., for
the Conservation Law Foundation; Kenneth E. Traum for the Office
of the Consumer Advocate; and, James J. Cunningham, Jr. and
Thomas C. Frantz for the Staff of the New Hampshire Public
Utilities Commission.

          On August 29, 1997, Public Service Company of New
Hampshire (PSNH) filed with the New Hampshire Public Utilities
Commission (Commission) its 1997 Conservation and Load Management
(C&LM) Pre-Approval filing.  PSNH seeks approval for a C&LM
budget of $2,345,429, of which $1,445,402 represents Lost Fixed
Cost Recoveries (LFCR).  PSNH proposed to continue the following
programs, which have previously been approved by the Commission;
Energy Crafted Home, Energy Service, Residential Conservation,
Energy Check, Education and Energy Conscious Construction.
          By an Order of Notice issued September 24, 1997, the
Commission scheduled a prehearing conference for October 14,
1997, set deadlines for intervention requests and objections
thereto, outlined a proposed procedural schedule, and required
the Parties and Commission Staff (Staff) to summarize their
positions with regard to the filing for the record.  On October
20, 1997, the Conservation Law Foundation (CLF) filed a petition
to intervene, which the Commission granted on November 4, 1997.
The Office of the Consumer Advocate (OCA) is a statutorily
recognized intervenor.  
          On October 29, 1997, PSNH filed a Motion for Protective
Order to exempt from disclosure certain attachments to its data
responses which contained customer specific information.  On
November 18, 1997, the Commission granted PSNH's Motion.
          Pursuant to the approved procedural schedule, PSNH,
CLF, OCA and Staff engaged in formal discovery and technical
sessions. Staff did not file testimony in this Docket.  On
November 21, 1997, PSNH, CLF, OCA and Staff participated in a
settlement  conference.
          Subsequent to the settlement conference, PSNH, OCA and
Staff entered into a Stipulation.  CLF was not a signatory to the
Stipulation.  The Stipulation was submitted to the Commission on
November 26, 1997.  A hearing was held on December 4, 1997, at
which time testimony supporting the Stipulation was presented to
the Commission.
          PSNH, OCA and Staff agreed that the 1997 Conservation
and Load Management Program proposal, as set forth in PSNH's
August 29, 1997 filing, should be modified as set forth in the
Stipulation and as summarized below: 

1.  Subject to audit by the New Hampshire Public Utilities
Commission Audit Staff, PSNH is not subject to the underspending
charge described in Docket No. DR 94-256, Order No. 21,623; the
end of fixed rate period budget allocation of 42% residential and
58% non-residential is acceptable; use of the recalculated LFCR
rate as set forth in the End-of-Settlement Agreement Report is
acceptable; the end of fixed-rate period C&LM account balance is
an under collection of approximately $4,000; and, any final over
or under collected balance with interest applied will be added to
or subtracted from the funds otherwise available for C&LM
expenditures in 1998.
2.  The 1997 C&LM budget is $1.6 million.  The programs as
proposed in the Company's August 29, 1997 Pre-Approval filing are
accepted and, until the Commission reaches a generic decision
regarding C&LM in a restructured electric utility industry,
continuation of expenditure levels and existing programs as
described in the 1997 C&LM Pre-Approval filing and amended by
this Settlement Agreement is appropriate.
3.  The Parties agree that during the post fixed-rate period in
1997, PSNH will continue to fund C&LM expenditures out of Base
rates.  The monthly commitment in the post fixed rate period in
1997 is $141,433 and savings from the issuance of tax exempt
pollution control revenue bonds (PCRBs) and revenues from the
sale of SO2 allowances will not be specifically allocated to
4.   LFCR will be reset to zero as of July 1, 1997, the date base
rates take effect in the PSNH base rate case.  Resetting LFCR to
zero as of July 1, 1997 will significantly reduce PSNH's
estimated 1997 C&LM expenditures, resulting in an estimated
unspent balance as of December 31, 1997 of approximately
$555,000.  The actual unspent balance as of December 31, 1997
will be added to funds available for C&LM in 1998.
5.  PSNH will file its 1998 C&LM Pre-Approval filing within 30
days after issuance of the Commission's rehearing order in Docket
DR 96-150 regarding energy efficiency programs or, if the
rehearing order is not issued by December 31, 1997, then PSNH
would be required to make its filing by February 1, 1998.  In the
period from January 1, 1998 until Commission approval of PSNH's
1998 Pre-Approval filing, PSNH will continue implementation of
existing programs, and will fund C&LM activities at a level of
$141,433 per month on an interim basis.  The amount expended
during this period will be deducted from funds authorized or
available in 1998.  
          CLF did not sign the Settlement Agreement because it
believed that the C&LM budget was too low.  CLF recommends the
Commission approve a budget of $2.3 million, an increase of $.7
          After careful review of the Stipulation, supporting
testimony and exhibits provided at the December 4, 1997 hearing,
we find that PSNH's proposed C&LM programs, as modified by the
Stipulation, are reasonable and in the public good.
          Regarding the C&LM budget amount, we find that Staff's
recommended 1997 C&LM budget of $1.6 million is a reasonable
budget.  The Commission believes that, since 1997 is the baseline
year for establishing the cap on C&LM expenditures during the
phase-out period, as specified in our February 28, 1997 Final
Plan on Restructuring (Docket DR 96-150), it is important to
ensure that 1997 spending levels are realistic and achievable. 
The Commission believes that, based on the most recent forecast
for 1997 spending, as included in the Settlement Agreement
(Exhibit 1), the $1.6 million is achievable and we will approve
that amount.  
          Regarding the lost fixed cost recoveries (LFCR), we
note that the 1997 amount is considerably more (roughly $700
thousand more) than the amount that is anticipated for 1998. 
This is due to the reset of LFCR to zero as of July 1, 1997, the
effective date for base rates in the Company's rate case
proceeding in Docket DR 97-059.  In order to be in accord with
the Commission spending cap in its Final Plan in DR 96-150, it is
clear that PSNH will increase expenditures on C&LM direct program
spending to compensate for the reduced level of LFCR, such that
the combined direct program spending amount and the LFCR amount
do not exceed the $1.6 million spending cap for 1998. 
          Regarding funding levels during the post fixed-rate
period of June 1,1997 through December 31, 1997, and for the
interim 1998 time period until PSNH files its 1998 C&LM proposal,
the Company will fund C&LM programs out of base rates at a
monthly amount of $141,433.
          Regarding the allocation of SO2 Allowances and savings
on PCRBs, it is our understanding that the allocation, for
purposes of C&LM funding, ends on May 31, 1997.  Further, it our
understanding that PCRB savings from refinancings are recognized
in the cost of capital in the Company's rate case in Docket DR
          Based upon the foregoing, it is hereby
          ORDERED, that the proposed C&LM programs, as amended by
the Stipulation, are hereby APPROVED.   
          By order of the Public Utilities Commission of New
Hampshire this thirty-first day of December, 1997.

  Douglas L. Patch      Bruce B. Ellsworth     Susan S. Geiger
      Chairman             Commissioner          Commissioner

Attested by:

Thomas B. Getz
Executive Director and Secretary