DE 94-163
                        freedom energy company, llc
                    Petition of Freedom Energy Company
            Order Denying Request for Public Utility Status in
                    Light of Pending Rulemaking Efforts
                         O R D E R   N O.  22,830
                             January 12, 1998
         On August 1, 1994, Freedom Electric Company, since
     reorganized as Freedom Energy Corporation, LLC (hereinafter
     Freedom), filed with the New Hampshire Public Utilities
     Commission (Commission) a Petition for Permission and Approval to
     Do Business on a Limited Basis as a Public Utility in New
     Hampshire.  By Order No. 21,683 (June 6, 1995), the Commission
     found that electric utility franchises were not exclusive as a
     matter of law and that a competing utility could be granted a
     franchise if it were in the public good.  The Commission did not
     rule on Freedom's qualifications to be a public utility,
     deferring that issue to a further evidentiary phase of the
         Public Service Company of New Hampshire (PSNH) appealed
     the Commission's Order to the State Supreme Court, which upheld
     the Commission's determination.  Appeal of Public Service Company
     of New Hampshire, 141 N.H. 13 (1996).  The Commission moved
     forward with the phase of the docket assessing Freedom's
     qualifications as a public utility pursuant to RSA 362:2.
         On March 28, 1997, Freedom requested suspension of the
     proceeding due to the last minute withdrawal of its anticipated
     financial partner.  The Commission granted the request to suspend
     the proceedings but asked Freedom to file a status report of its
     developments by May 1, 1997.  The Commission also held in
     abeyance the Motion to Dismiss filed by PSNH on March 10, 1997. 
         The New Hampshire General Court enacted HB 726 during
     the 1997 legislative session, which amended RSA 374-F by allowing
     competitive energy suppliers the right to seek public utility
     status from the Commission despite a lack of facilities owned or
     operated.  It is in the Commission's discretion to determine
     whether such treatment would be in the public interest.  See RSA
     374-F:7.  The amendment was effective June 20, 1997.
         Freedom, on June 2, 1997, filed a status report with
     the Commission in which it asked to be designated a public
     utility, pursuant to the amended RSA 374-F:7.  In its request,
     Freedom argued that it no longer needed to "own, lease, operate,
     or otherwise control facilities" and therefore the lack of a
     financial partner was no longer a concern. 
         PSNH objected to the request on June 4, 1997, arguing
     that there was no need for further proceedings and that the
     matter of Freedom's status should be consolidated with the
     Commission's docket on restructuring, DR 96-150.  
         The Commission heard arguments on the matter on August
     21, 1997.  In addition to Freedom and PSNH, the Office of
     Consumer Advocate (OCA) participated and explored the legislative
     history regarding the amendment to RSA 374-F.  The OCA
     recommended that the Commission grant the request if it found
     that doing so would be in the public interest. 
         Since completion of that hearing and the Commission's
     oral deliberations on this issue on November 3, 1997, Freedom
     submitted a letter notifying the Commission that some of
     Freedom's principals no longer wished to pursue this docket,
     though Mr. Rodier and Mr. Clough intended to do so in the name of
     Freedom Partners which was in the process of being organized. 
     Freedom Partners, according to Mr. Clough, would have the same
     interest in this and the Retail Wheeling Pilot Program as did
         We have considered the arguments in favor and
     opposition to Freedom's request and believe the matter is best
     addressed in the broader context of a rulemaking docket
     concerning the standards for all aspects of competitive
     suppliers.  This does not mean, however, that we are
     consolidating the issue with the full restructuring docket, as
     PSNH urges.  The Commission is in the midst of a rulemaking on
     standards for competitive suppliers, which in turn is the
     outgrowth of efforts of the working group established in our
     February 28, 1997 Restructuring Plan.  Because the bulk of the
     working group's meetings were before the enactment of RSA 374-F:7, the current draft of the rules does not address the issue of
     what standards should be applied to suppliers who seek to be
     regulated as public utilities.  We think it should be included in
     the current rulemaking and will direct our Staff to develop
     standards regarding when a competitive supplier should be
     regulated as a public utility. Freedom (or Freedom Partners) and
     all other interested parties will have the opportunity to
     participate in the development of those rules through our
     standard rulemaking process.
         We will not proceed further with this docket.  After
     adoption of the rules, Freedom (or Freedom Partners) will be free
     to seek authorization pursuant to the terms of the rules.       
         Based upon the foregoing, it is hereby
         ORDERED, that the Commission's draft rules regarding
     competitive energy suppliers be amended to address suppliers who
     seek public utility status; and it is
         FURTHER ORDERED, that Freedom's request is hereby
     DENIED pending completion of the rulemaking. 
                   By order of the Public Utilities Commission of New
     Hampshire this twelfth day of January, 1998.
        Douglas L. Patch    Bruce B. Ellsworth        Susan S. Geiger
            Chairman           Commissioner            Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary