DR 96-149
                  Public Service Company of New Hampshire
                     Investigation into Light Loading
                  Order Establishing Technical Conference
                         O R D E R   N O.  22,895
                               April 7, 1998
         APPEARANCES:  Brown, Olson and Wilson by Amy L.
     Fracassini, Esq., for Concord Regional Solid Waste/Resource
     Recovery Cooperative; Brown, Olson and Wilson by Bryan K. Gould,
     Esq. and Robert A. Olson on behalf of Bio-Energy Corporation,
     Bridgewater Power Company, L.P., Hemphill Power and Light
     Company, Pinetree Power, Inc., Pinetree Power-Tamworth, Inc. and
     Whitefield Power and Light Company; Bossie, Kelly, Hodes, and
     Buckley by Jay L. Hodes, Esq., on behalf of Wheelabrator Concord;
     Orr and Reno, by Jonathon A. Chorlian, Esq., for the Granite
     State Hydropower Association; Daniel Allegretti, Esq., for
     American Hydro, Inc.; Gerald M. Eaton, Esq., for Public Service
     Company of New Hampshire; Phillip Munck for Waste Management of
     NH; Wynn Arnold, Esq., for the Office of the Governor; Michael
     Holmes, Esq., for the Office of Consumer Advocate; and Eugene F.
     Sullivan, III, Esq.  for the Staff of the New Hampshire Public
     Utilities Commission.
               On May 14, 1996, the New Hampshire Public Utilities
     Commission (Commission) issued an Order of Notice opening an
     investigation into the issue of "light loading" as it relates to
     certain of the State's largest Small Power Producers (SPPs) or
     Qualifying Facilities (QFs) selling power to Public Service
     Company of New Hampshire (PSNH) under rate orders.  
               In the most recent PSNH Fuel and Purchase Power
     Adjustment Clause (FPPAC) proceeding, DR 97-014, the Office of
     the Governor and the Commission Staff filed testimony
     recommending the deferral of recovery by PSNH of certain monies
     paid by PSNH to QFs.  The Office of the Governor and Commission
     Staff questioned whether PSNH was required to purchase some of
     the output of the QFs under certain circumstances pursuant to
     Federal Energy Regulatory Commission (FERC) rules and the terms
     of the rate orders.  Based on the testimony of Staff and the
     Office of the Governor, the Commission required PSNH to defer
     recovery of $10 million per FPPAC period until the issue is
     resolved.  See, Order No. 22,847 (February 10, 1997).
               On January 12, 1998, the Commission issued a revised
     Order of Notice expanding this proceeding to include "the
     investigation  [of] all QFs currently selling power to PSNH under
     long term rate orders as parties to the proceeding."  The Order
     of Notice scheduled a prehearing conference for February 19,
               Freshwater Hydro, Inc., Salmon Falls Hydroelectric
     Facility, Watson Dam Hydroelectric Project, Newfound
     Hydroelectric Co., Union Village Dam, SPP Hydro Stations Waterloo
     Falls, Otis Falls and Chamberlain Falls and Alden Engineering,
     Powerhouse Systems, Inc., Southern New Hampshire Hydroelectric,
     Mad River Power Associates, Ashuelot Paper Company and Lower
     Robertson Dam, Pittsfield Hydropower Company, Inc., Otter Lane
     Hydro, and Hadley Falls Hydro filed motions to intervene. Waste
     Management of NH filed a motion for limited intervention. The
     Commission granted all requests for intervention at the
     prehearing conference.  
               At the prehearing conference, the Granite State
     Hydropower Association stated that it appeared for only those
     hydropower QFs selling power to PSNH under rate orders and
     contended that any findings relative to load curtailment in this
     proceeding should not apply to QFS selling power to PSNH under
               With regard to an appropriate procedural schedule, the
     wood-fired SPPs and a number of other parties argued that Staff
     should be required to file a memorandum of law explaining its
     theory of the case.  Staff responded that it believed it would be
     more efficient to hold a technical session to examine how PSNH
     had developed the long term avoided costs under which QFs were
     selling power to PSNH.  Staff argued that this might shed light
     on the threshold issue of whether negative avoided costs had been
          included in the calculations. 
               With regard to the scope of this proceeding, this order
     will serve as notice clarifying that the issue of light load
     curtailments applies to all QFs selling power to PSNH pursuant to
     the requirements of the federal Public Utility Regulatory
     Policies Act (PURPA) or RSA 362-A.  This applies whether the
     required purchase of power was styled as a "rate order" or
     "contract".  This does not, however, include those contracts
     which were entered into outside the parameters or mandate of
     PURPA, RSA 362-A, or the rules and orders implementing those
     statutory provisions.
               With regard to the procedural schedule, we agree with
     Staff that the first issue to address in this proceeding is
     whether negative avoided costs were included in the calculation
     of avoided costs as the answer to that question would potentially
     conclude this proceeding.        
               Based upon the foregoing, it is hereby 
               ORDERED, that a technical session be held on April 22,
     1998, at 10:00 a.m. at the Commission offices to investigate
     whether PSNH included negative avoided costs in the calculation
     of long term avoided costs used to set the rates to be paid to
     QFs and to develop a procedural schedule to investigate further
     that discrete issue if necessary; and it is
               FURTHER ORDERED, that this proceeding applies to all
     QFs selling power to PSNH under long term rates pursuant to the
     mandates of PURPA and RSA 362-A whether styled as a rate order or
     contract; and it is
               FURTHER ORDERED, that a copy of this order be served
     upon all QFs selling power to PSNH to provide notice of the scope
     of this proceeding. 
               By order of the Public Utilities Commission of New
     Hampshire this seventh day of April, 1998.
        Douglas L. Patch    Bruce B. Ellsworth        Susan S. Geiger
            Chairman           Commissioner            Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary