DR 97-212
       Cooperative Interruptible Service Compliance Filing
     Order Nisi Approving Update of Cooperative Interruptible Service
     Credits and Non-Compliance Charges for the 1997/98 Program Year
                     O R D E R  N O.  22,889
                          March 30, 1998
               On October 1, 1997, Granite State Electric Company
     (Granite State or the Company) filed with the New Hampshire
     Public Utilities Commission (Commission) an update of the short-term value of capacity and a review of the long-term value of
     capacity used to calculate customer credits in Granite State's
     Cooperative Interruptible Service (CIS) Program.  The Company's
     CIS Program provides credits to large commercial and industrial
     customers based on the customer's ability and willingness to
     interrupt load as requested by Granite State during capacity
     shortages.  Under the Settlement Agreement between Granite State
     and Commission Staff (Staff) approved by Order No. 20,684
     (November 30, 1992) in Docket DR 92-188, Granite State is
     required to file updated short-term and long-term avoided costs
     and to recalculate the credits on or before October 1st of each
               Granite State's CIS program consists of two types of
     contracts, CIS-1 and CIS-2.  Through CIS-1, a customer commits to
     a firm interruptible load level with a seven year notice of
     termination provision, is paid regardless of whether or not an
     interruption actually occurs and is penalized in the event that
     an interruption is called and the customer fails to comply. 
     CIS-2 does not require a commitment for a firm interruptible load
     level by the customer.  Rather, the contract is performance-based, with higher credits paid in months when the company
     requests an interruption and the customer agrees to the request. 
     Both contracts offer three options which differ in terms of
     frequency, duration and interruption notification period.  A
     different credit is paid for each option.
               In its October 1, 1997 filing, Granite State updated
     the data on program expenses and the total credited interruptible
     load to calculate new program cost factors which were then used
     to update the credit calculations.  The long-term avoided cost
     value, used in establishing the credit levels in CIS-1 contracts,
     remained unchanged from 1996/97 at a level of $65.10 per kW. 
     Granite State proposes two changes to its CIS Programs.  First,
     the Company proposes to close the CIS-1 Program to any new
     customers.  Second, the Company proposes eliminating the CIS-2
     Program in its entirety.  Granite State recommends these changes
     on the basis of impending retail access, under which the Company
     will not, with the exception of default power, be selling
     electricity to its customers.
               Granite State proposes the following credits
     ($/kW-Month) and non-compliance charges ($/kW-Day), depending
     upon which option the customer chooses.  The proposed CIS-1
     credits and non-compliance charges are approximately 2 percent
     higher than the 1996/97 charges.
                              Credit             Charge
               Option 1       $ 4.33             $ 5.20
               Option 2       $ 4.75             $ 5.70
               Option 3       $ 3.25             $ 3.90
               On February 13, 1998, Staff issued data requests to
     Granite State requesting additional information regarding the
     Company's CIS Program filing.  On February 20, 1998, the Company
     filed responses which served to clarify issues about Granite
     State's CIS Program expenses.
               The Commission has reviewed Granite State's filing and
     will approve the updated avoided costs, credits and non-compliance charges.  We find that the credits have been
     calculated in accordance with the formulas approved in Order No.
     20,684.  We are satisfied that Granite State's CIS-1 Program
     continues to provide value to the Company and its ratepayers as
     the industry makes the transition to increased competition and
     that the updated avoided costs and resulting credits are
     reasonable.  We find that elimination of the CIS-2 Program will
     not impact current ratepayers because Granite State has no
     customers in the CIS-2 Program.  We further find that elimination
     of the CIS-2 Program is consistent with the Commission's efforts
     to move forth with retail choice. 
               Based upon the foregoing, it is hereby
               ORDERED NISI, that Granite State's request for approval
     of its updated CIS-1 Credits and elimination of the CIS-2 Program
     is GRANTED; and it is
               FURTHER ORDERED, that pursuant to N.H. Admin. Rules,
     Puc 1601.05, Granite State shall cause a copy of this Order Nisi
     to be published once in a statewide newspaper of general
     circulation, such publication to be no later than April 6, 1998
     and to be documented by affidavit filed with this office on or
     before April 13, 1998; and it is
               FURTHER ORDERED, that Granite State serve a summary of
     its proposed rate change and a copy of this Order Nisi on all
     current CIS-1 and CIS-2 customers by first class U.S. Mail,
     postmarked no later than April 13, 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 April 20, 1998; and it
               FURTHER ORDERED, that any party interested in
     responding to such comments or request for hearing shall do so no
     later than April 27, 1998; and it is
               FURTHER ORDERED, that this Order Nisi shall be
     effective April 30, 1998, unless the Commission provides
     otherwise in a supplemental order issued prior to the effective
     date; and it is
               FURTHER ORDERED, that Granite State shall file a
     compliance tariff with the Commission on or before April 30,
     1998, in accordance with N.H. Admin. Rules, Puc 1601.04(b).
               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