DR 98-012
                            Offer of Settlement
                             Procedural Order
                         O R D E R   N O.  22,886
                          March 30, 1998
         APPEARANCES:  Carlos A. Gavilondo, Esq., for Granite
     State Electric; F. Anne Ross, Esq., for Retail Merchants
     Association of New Hampshire; Wynn E. Arnold, Esq., for the
     Governor's Office of Energy and Community Services; Rep. Jeb E.
     Bradley and Rep. Clifton Below; Henry Veilleux for the Business
     and Industry Association; Patricia Gregg for Network
     Publications; Susan L. Geiser, Esq., for UNITIL; Robert A.
     Backus, Esq., for Campaign for Ratepayer Rights; Steven V.
     Camerino, Esq., for Great Bay Power; David W. Marshall, Esq., for
     the Conservation Law Foundation; Elizabeth I. Goodpastor, Esq.,
     for City of Manchester, New Hampshire; James Monahan, for the
     Dupont Group and Cabletron; Donna C. Sharkey, Esq., for Enron
     Energy Services; Gerald M. Eaton, Esq., for Public Service
     Company of New Hampshire; Paul Gromer, for Northeast Energy
     Efficiency Council; D. Dickinson Henry, for the Electric Utility
     Restructuring Collaborative; James T. Rodier, Esq., for himself; 
     Sylvester Swierzy for EnerDev, Inc. and the Granite State
     Taxpayers Association;  P. Aalto for PJA Energy Systems; Michael
     W. Holmes, Esq., for the Office of the Consumer Advocate; and
     Eugene F. Sullivan, III, Esq. and Robert J. Frank, Esq., for the
     Staff of the New Hampshire Public Utilities Commission.
               On February 3, 1998, Granite State Electric (GSE) filed
     an Offer of Settlement relative to restructuring of the electric
     utility industry as it affects GSE and its customers.  The New
     Hampshire Public Utilities Commission (Commission) issued an
     Order of Notice on February 11, 1998 requiring that a prehearing
     conference to consider the issues be held on February 27, 1998;
     that parties wishing to intervene must do so by February 24,
     1998; and that parties wishing to object to petitions to
     intervene file objections by February 26, 1998.
               Motions to Intervene were made by the Retail Merchants
     Association of New Hampshire (RMA), the Governor's Office of
     Energy and Community Services (ECS), Rep. Jeb Bradley, Rep.
     Clifton Below, the Business and Industry Association (BIA),
     Network Publications, UNITIL, the Campaign for Ratepayer
     Rights(CRR), Great Bay Power (Great Bay), the Conservation Law
     Foundation (CLF), the City of Manchester, New Hampshire
     (Manchester), The Dupont Group/Cabletron (Cabletron), Enron
     Energy Services (Enron), Public Service Company of New Hampshire
     (PSNH), the Northeast Energy Efficiency Council (NEEC), James T.
     Rodier, Esq., EnerDev, Inc. (Enerdev), the Granite State
     Taxpayers Association (Taxpayers), and PJA Energy Systems (PJA).
     All motions to intervene were granted at the prehearing
     conference. (Tr. February 27, 1998, p. 12)
               On March 9, 1998, GSE filed a proposed scoping
     stipulation for the subject dockets which was supported by
     Granite State Taxpayers, EnerDev, the Restructuring
     Collaborative, BIA, Rep. Bradley and Rep. Below.  On March 10,
     1998, Staff filed a Memorandum in Support of Motion to
     Consolidate, which was supported by RMA and Enron. GSE submitted
     a response on March 11, 1998, which it characterized as a
     clarification of the record, reiterating their position that
     consolidation was unnecessary and would not promote the orderly
     and efficient conduct of either proceeding. 
          A.  Issues
               The Order of Notice stated that the Offer of Settlement
     raised, inter alia, three issues:  
          1) whether the settlement complies with the requirements of
               RSA 374-F and the Commission's policies related thereto; (2)
               how the settlement relates to Granite State's filing in DR
               97-251 relative to the transfer of New England Power's
               generating facilities in New Hampshire; and, (3) whether
               implementation of the settlement is in the public interest.
               GSE contends that its Offer of Settlement complies with
     RSA 374-F inasmuch as, among other things, it will provide retail
     choice and deliver near term rate relief. Moreover, GSE contends
     the settlement is in the public interest because, e.g., it
     supports low income customers as well as environmental and
     conservation programs.  Finally, GSE suggests that the settlement
     is separable from the transfer which is the subject of DE 97-251. 
     The following parties expressed support for the settlement and
     the separation of the transfer and settlement dockets, namely,
     Enerdev and the Granite State Taxpayers Association, the BIA, the
     Restructuring Collaborative, CRR, Representatives Below and
     Bradley, CLF, and the Governor.
               Other parties, PSNH, Unitil and PJA, for instance,
     indicated their intent to monitor the progress of the proceedings
     or their concern for precedential effects.  The City of
     Manchester, Enron, Great Bay, the RMA, and the OCA, however,
     pointed out specific concerns created by the settlement.  A
     number of those parties, and Staff as well, expressed the opinion
     that the settlement and transfer proceedings were inextricable.
               B.  Motion for Consolidation and Scoping Stipulation 
               GSE attempted to resolve the issue of the
     interrelationship between the transfer docket, DE 97-251, and the
     settlement docket, DR 98-012, by suggesting that the parties work
     towards a stipulation on scoping to segregate issues between the
     proceedings.  Nonetheless, the RMA moved orally to consolidate
     the dockets, assuming a stipulation were not achieved, and was
     supported by Enron in that motion.
               The Commission directed that a stipulation on scoping
     be filed by March 6, 1998 and that in the event a stipulation
     could not be achieved that recommendations for further action be
     submitted by March 10, 1998.  Agreement of all the parties was
     not forthcoming and, on March 10, 1998, GSE filed a proposed
     stipulation agreed to by the Governor, Representative Below,
     Enerdev, Granite State Taxpayers Association, CRR, CLF, BIA,
     NEEC, PSNH, Great Bay, Mr. Rodier, Unitil, Cabletron, and the
     Restructuring Collaborative.  PJA took no position while Enron,
     Staff, the OCA and the RMA opposed the stipulation.   
               GSE explained that "[p]ursuant to the Scoping
     Stipulation, any determination by the Commission in the context
     of the transfer proceeding in Docket No. DE 97-251 would not
     prejudice the Commission's ability to consider and decide, or the
     ability of any party to raise, any issue with respect to the
     Offer of settlement pending in Docket No. DR 98-012."  GSE also
     contends there is no evidentiary reason for consolidation and
     that delay caused by consolidation will deprive customers of
     substantial benefits. 
               On March 10, 1998, Staff and the RMA filed memoranda
     supporting the motion to consolidate.  Staff contends that the
     transfer and settlement dockets are fundamentally intertwined and
     that various findings required in the transfer docket presuppose
     information or elements of the settlement docket.  The RMA,
     joined by the City of Manchester and the OCA, argues similarly
     and notes as well the efficiency of consolidation.
                    C. Procedural Schedule
               At the prehearing conference, there was considerable
     discussion regarding the procedural schedule for the transfer
     docket, DE 97-251, and the settlement docket, DR 98-012.  The
     parties agreed to the schedule for the transfer docket, which was
     set out in the Order of Notice in that proceeding.  As for the
     schedule for the settlement docket, an agreement in principle was
     reached dependent on the ability to fashion a stipulation on
               The procedural schedule submitted to the Commission for
     the settlement docket follows:
               March 9, 1998       Testimony in Support
               March 23, 1998      Data Requests to Parties Supporting
               March 30, 1998      Data Responses 
               April 15, 1998      Testimony in Opposition
               April 22, 1998      Data Requests to Parties Opposing                           Settlement
               April 30, 1998      Data Responses
               May 11, 1998        Rebuttal Testimony
               May 26 - 29, 1998   Hearings (beginning 10:00 a.m.                                        daily)
               Inasmuch as the scoping stipulation was not agreed to
     by all the parties, we must address the motion for consolidation. 
     The RMA, Staff and others argue that certain issues can only be
     adequately reviewed if the dockets are consolidated.  For
     instance, Staff is concerned that if the transfer were approved
     without a ruling on the settlement, customers would be at risk to
     pay higher rates through GSE's wholesale purchase agreement. 
     With respect to this specific concern, GSE notes that the New
     England Power FERC filing contains a commitment to a rate freeze
     for GSE.   
               We do not believe that the parties favoring
     consolidation have shown that the transfer and settlement issues
     are so inextricable that we should not proceed with the schedule
     already established for the transfer proceeding by Order No.
     22,489 in Docket No. DE 97-251 nor adopt the independent schedule
     set forth above for the settlement proceeding, Docket No. DR 98-012.  Moreover, the scoping stipulation appears to adequately
     address concerns that a ruling in the transfer docket would
     prejudice the interests of customers or the public interest
     generally.  Accordingly, we deny the motion for consolidation and
     approve the scoping stipulation.  
               While we conclude that the better course at this time
     is to move ahead on separate tracks for the two proceedings, we
     nevertheless put the parties on notice that we have the authority
     to modify the procedural schedule in either proceeding in the
     event issues in one docket are implicated by issues in the other
     docket.  Ultimately, GSE as the petitioner in these two
     proceedings carries the burden of proving the representations it
     has made to date and if its representations that consolidation is
     unnecessary prove to be wrong then we will exercise our authority
     to, among other things, revise the procedural schedules or
     require consolidation.     
               Based upon the foregoing, it is hereby 
               ORDERED, that the various motions to intervene as
     discussed above are GRANTED; and it is
               FURTHER ORDERED, that RMA's motion to consolidate
     Docket No. DE 97-251 and Docket No. DR 98-012 is DENIED; and it
               FURTHER ORDERED, that the Scoping Stipulation filed by
     GSE on March 10, 1998 is APPROVED; and it is
               FURTHER ORDERED, that the procedural schedule for
     Docket No. DE 97-251 set forth in Order No. 22,849 (February 17,
     1998) is RATIFIED; and it is
               FURTHER ORDERED, that the procedural schedule set forth
     above for Docket No. DR 98-012 is APPROVED.
               By order of the Public Utilities Commission of New
     Hampshire this thirtieth day of March, 1998.
        Douglas L. Patch    Bruce B. Ellsworth        Susan S. Geiger
            Chairman           Commissioner            Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary