DR 97-157
                                 DR 97-175
                Exeter and Hampton Electric Company, Inc./
                      Concord Electric Company, Inc.
          Petitions to Provide Back-Up, Stand-by and Supplemental
                     Order Rejecting Proposed Tariffs
                         O R D E R   N O.  22,902
                              April 13, 1998
               On August 4, 1997, Exeter & Hampton Electric Company
     (Exeter & Hampton) filed with the New Hampshire Public Utilities
     Commission (Commission) a proposed rate schedule "Back-up Service
     Classification B" pursuant to RSA 378:1 and a request for a
     Declaratory Ruling on Applicability, for which the Commission
     opened docket number DR 97-157. On August 27, 1997, Concord
     Electric Company (Concord Electric) filed a petition to offer a
     new back-up service similar to the Exeter & Hampton petition, for
     which the Commission opened docket number DR 97-175.
               Under the respective tariffs, the proposed service
     would be available to "generation facilities for station service
     purposes, where customer provides capacity and energy sufficient
     to meet Customer's needs . . . ."   Exeter and Hampton and
     Concord Electric (collectively the Unitil Companies) would
     provide "for the delivery of energy and capacity, to be purchased
     by the customer from a third party supplier. . . ."  Initial
     Memorandum of the Unitil Companies at 1.  In its petitions, the
     Unitil Companies also requested a declaratory ruling that the
     proposed services will apply to Seabrook Station and Merrimack
     Station and their campus loads.  These loads are currently
     located within the boundaries of the service territories of
     Exeter and Hampton and Concord Electric, respectively but the
     loads are served by Public Service Company of New Hampshire
     (PSNH), the owner of Merrimack Station and the sister company of
     the lead owner of Seabrook Station.  Concord Electric also
     provides service to SES Concord under a special service agreement
     no longer in effect.  Concord Electric seeks a determination that
     the proposed tariff should apply to back-up, stand-by and
     supplemental services supplied to SES Concord.
               On September 2, 1997, the Commission issued Order No.
     22,698 (September 2, 1997) suspending the proposed tariff of
     Exeter & Hampton in DR 97-157 and the proposed tariff of Concord
     Electric in DR 97-175, scheduling a prehearing conference for
     September 17, 1997, and setting a deadline for intervention
               On September 8, 1997, Concord Regional Solid
     Waste/Resource Recovery Cooperative (Cooperative) filed a Motion
     to Intervene in DR 97-175.  All jurisdictional utilities were
     made mandatory parties by Order No. 22,698.  By Order No. 22,742
     (September 29, 1997), the Commission granted the Cooperative's
     Motion to Intervene and established a procedural schedule for
     discovery and to consider memoranda of law from the parties.  On
     October 29, 1997, the Commission received legal memoranda from
     Exeter and Hampton, Concord Electric and PSNH.  On November 12,
     1997, the Commission received reply memoranda from Exeter and
     Hampton, Concord Electric and PSNH.
          A.   Exeter and Hampton/Concord Electric
               The Unitil Companies argued that because the generation
     facilities are located in their service territories they have the
     right to provide service to the facilities, and the facilities
     are obligated to take service from them under the proposed
     tariffs.  The Unitil Companies also argued that although PSNH has
     provided station service to Merrimack Station and Seabrook
     Station since their construction they have never been authorized
     to provide that service by the Commission under RSA 374:22 and
     374:26.  Thus, the Unitil Companies contended that the Commission
     should require the facilities to take the proposed services from
     the respective franchised utility.
          B.   PSNH
               PSNH argued that under both tariffs the respective
     utilities would not own, operate or manage any plant or equipment
     for the conveyance of electricity to the public and, therefore,
     neither Company was acting as a New Hampshire public utility
     under the tariffs.  RSA 362:2.  PSNH further argued that
     franchise rights are not exclusive, as a matter of law, in New
     Hampshire and that PSNH should be allowed to continue to provide
     station service to these facilities under the public interest
     standards of  RSA 374:22 and 374:26 to the extent that authority
     has not already been granted by the Commission.  
               The issues for our consideration are whether Seabrook
     Station, Merrimack Station and SES Concord are required to take
     service under the tariffs from respectively, Exeter and Hampton
     and Concord Electric and, if so, whether the proposed tariffs are
     just and reasonable pursuant to RSA 378:7.  With respect to
     Merrimack Station and Seabrook Station, we conclude that it would
     not serve the public interest to require the generating stations
     to take service from the Unitil Companies.  
               As recognized by both PSNH and the Unitil Companies,
     service territories are not exclusive as a matter of law in New
     Hampshire.  Appeal of Public Service Company of New Hampshire,
     141 N.H. 13 (1996).  Whether more than one utility should be
     allowed to provide service in a particular service territory or
     to a particular customer in that service territory under
     particular circumstances is a question of fact and policy for the
     Commission's resolution.  Id. In reaching its decision, the
     Commission must also determine which alternative or alternatives
     best serves the public interest or the public good.  Id.,
     (applying RSA 374:26).
               Thus, in the case at hand we have examined what
     facilities are in place to serve the load, what new facilities
     would be required to serve the load and which utility presents
     the rational and logical means to providing service, in light of
     the investments that have been made and that are already in
     place.  See eg.,  Re Exeter and Hampton Electric Company/Hall
     Farm Realty Trust, Order No. 22,663 (July 21, 1997);  Re Exeter
     and Hampton Electric Company/Kingston-Warren Corporation, Order
     No. 22,697 (September 2, 1997).  
               In this case, the facilities being used to provide
     back-up, stand-by and supplemental service to Seabrook and
     Merrimack stations are the same facilities used for the
     generation and transmission of energy when the plants are
     operating.  Thus, the rational and logical means of providing
     these services, that avoids the construction of redundant
     facilities, is the continued provision of these services under
     the current arrangement.
               We note that this case differs from other cases we have
     addressed regarding the issue of franchise exclusivity because it
     is the franchised utility requesting an order from the Commission
     requiring a customer to take its service, rather than a customer
     requesting service from a different utility.  Moreover, it is
     undisputed that neither Exeter & Hampton nor Concord Electric
     owns or operates the necessary facilities to deliver the required
     capacity and energy to Seabrook Station or Merrimack Station. 
     Thus, we do not accept the definition of "service" the Unitil
     Companies would provide to customers subject to this tariff.  The
     Unitil Companies are, in effect, asking us to approve a charge to
     a customer for nothing more than the customer's presence in its
     service territory.  We will not approve such a charge.        
               With regard to SES Concord, which does use Concord
     Electric facilities to receive service, we cannot conclude that
     the proposed back-up, stand-by and supplemental service tariff
     would be just and reasonable.  Initially, the tariff would
     require SES Concord to take service for a minimum of three years. 
     Given the advent of competitive generation services, we find this
     provision anti-competitive and, therefore, not just or
     reasonable.  We also question the requirement that SES Concord
     purchase its own energy and capacity for transmission and
     distribution to its facility when no other customer is required
     or allowed such a choice under any other Unitil Company tariff.
     See, RSA 378:10
               With regard to the expired special contract under which
     Concord Electric is providing service to SES Concord, the special
     contract was in effect for one year while SES Concord was allowed
     to determine whether it wanted back-up, stand-by and supplemental
     service, or station service.  The contract terminated in 1990 and
     Concord was required by the Commission to file a tariff or
     special contract to provide service to SES Concord in 1990.  Re
     Concord Electric Company, 74 NH PUC 122, 123 (1989).  To date, we
     have received no such contract or tariff filing from Concord
     Electric to provide service to SES aside from this filing which
     has been suspended and rejected herein.  Concord Electric shall
     file a special contract reflecting the rates, terms and
     conditions of service for effect in the provision of service to
     SES Concord. 
                    Based upon the foregoing, it is hereby 
               ORDERED, that Exeter and Hampton Electric Company,
     Inc.'s proposed tariff pages NHPUC No. 17 - Electricity, Original
     Page 40-S and Original Page 40-T are REJECTED; and it is
               FURTHER ORDERED, that Concord Electric Company, Inc.'s
     proposed tariff pages NHPUC No. 12 - Electricity, 40-R and 40-S
     are REJECTED; and it is 
               FURTHER ORDERED, that Concord Electric Company, Inc.
     shall file a special contract reflecting the rates, terms and
     conditions of service for effect in providing service to SES
               By order of the Public Utilities Commission of New
     Hampshire this thirteenth 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