DR 97-241
                Fuel and Purchased Power Adjustment Clause
                          Order Increasing Rates
                         O R D E R   N O.  22,912
                              April 29, 1998
         On December 31, 1997, the New Hampshire Public
     Utilities Commission (Commission) issued Order No. 22,815 in
     the above-captioned docket.  Order No. 22,815 suspended
     operation of Connecticut Valley Electric Company's (CVEC)
     proposed 1998 fuel and purchased power adjustment clauses
     (FAC and PPCA) tariff sheets pending a hearing on the issue
     of CVEC's failure to terminate a wholesale purchase power
     contract between CVEC and its parent company, Central
     Vermont Public Service Company (CVPS).  Order No. 22,815
     also set an evidentiary hearing to determine the purchased
     power rates that would have resulted if CVEC had terminated
     the contract with CVPS, the effects on CVEC of not allowing
     the proposed rate increase, and the appropriate effective
     date for any new rates.
         CVEC filed a motion for rehearing on January 12,
     1998, which was granted in Order No. 22,838.  In that Order,
     the Commission allowed CVEC an additional opportunity to
     present further evidence regarding the question of its
     prudence in not terminating the contract with CVPS.  The
     hearing set by this Order started on January 28, 1998 and
     was completed on February 10-11, 1998.  Although the
     Commission has held deliberations, a final order has not yet
     issued regarding that hearing.
         Prior to commencement of the hearing set by Order
     No. 22,815, CVEC and CVPS filed a motion for preliminary
     injunction with the United States District Court for the
     District of New Hampshire, sitting in Rhode Island (District
     Court), seeking to require the Commission to allow CVEC full
     recovery of the RS-2 rate under the purchased power contract
     with CVPS as of January 1, 1998.  On April 9, 1998, the
     District Court granted CVEC a preliminary injunction which
     orders that CVEC be allowed to increase its rates as
     proposed in its rate filing.  On April 9, 1998, CVEC filed
     tariff sheets and attachments to increase rates as allowed
     by the Court's order.  CVEC proposes to increase the FAC
     rate from $0.0059 per kWh to $0.0078 per kWh and to increase
     the PPCA rate from $0.0023 per kWh to $0.0239 per kWh.
     Combined, the FAC and PPCA would increase rates by $0.0235
     per kWh.  The Commission estimates this will increase the
     average homeowner's monthly bill by twenty-two percent.   
         The Commission has taken every step available to
     it under federal procedure to protect the interests of
     consumers.  Specifically, the Commission has sought a stay
     of the district court's injunction and is seeking to have
     CVEC post a security bond for the payment of any overcharges
     collected as a result of the injunction.  The Commission
     will also appeal issuance of the injunction to the United
     States Court of Appeals for the First Circuit.  But until
     the order is overturned, the Commission must allow CVEC's
     proposed rate increase.  
         The Commission will require CVEC to keep records
     of the difference between the amounts that it would have
     collected under its 1997 RS-2 rates and any amounts that it
     collects as a result of the District Court's order.  The
     Commission places CVEC on notice that it will be liable for
     refunds, plus interest, in the event that the District
     Court's Order is overturned.
         Based on the foregoing, it is hereby 
         ORDERED, that as ordered by the United States
     District Court on April 9, 1998, Connecticut Valley Electric
     Company is allowed to increase its FAC rate from $0.0059 per
     kWh to $0.0078 per kWh and to increase its PPCA rate from
     $0.0023 per kWh to $0.0239 per kWh effective on all bills
     rendered on and after May 1, 1998; and it is 
         FURTHER ORDERED, that CVEC keep accurate and
     complete records of the revenues that it collects as result
     of the District Court's April 9, 1998 Order; and it is 
         FURTHER ORDERED, that CVEC shall pay refunds, plus
     interest, to its customers for any overcharges collected as
     a result of the April 9, 1998 District Court Order, should
     that Order be overturned or modified.
         By order of the Public Utilities Commission of New
     Hampshire this twenty-ninth day of April, 1998.
       Douglas L. Patch     Bruce B. Ellsworth   Susan S. Geiger
           Chairman            Commissioner       Commissioner
     Attested by:
     Claire D. DiCicco
     Assistant Secretary