DR 98-049
                         Northern Utilities, Inc.
                 Recovery of Environmental Response Costs
                  Order Suspending Proposed Tariff Pages
                         O R D E R   N O.  22,931
                               May 13, 1998
         On April 13, 1998, Northern Utilities, Inc.
     (Northern) filed with the New Hampshire Public Utilities
     Commission (Commission) a Petition for Approval of an ERC
     Rate Adjustment Tariff establishing a mechanism for recovery
     of Northern's Environmental Response Costs (ERCs) and other
     related tariff changes.  ERCs are incurred in the
     assessment, remediation and monitoring of Northern's former
     manufactured gas plants (MGP) in New Hampshire.
         Pursuant to federal and state environmental laws,
     Northern is required to investigate and remediate the sites
     of former MGPs in Rochester and Exeter, New Hampshire, owned
     and/or operated by Northern's predecessors, on which
     hazardous materials from the MGP operations have been found. 
     The proposed recovery mechanism is designed to recover
     historical annual actual ERC expenditures including carrying
     costs over a five year period, plus one-half of related
     insurance and third-party expenses and less one-half of
     related insurance and third-party recoveries.  
         Northern requests the historical period under the
     proposed mechanism to be twelve months ending June 30, while
     the recovery period, during which one-fifth of the prior
     year's ERC expenditures will be collected, is the subsequent
     twelve month period from November 1 through October 31.  The
     annual rate will become effective on November 1 by adding it
     to Northern's winter period Cost of Gas Adjustment (CGA). 
     It will be modified after six months and included with the
     summer CGA effective May 1 to more accurately recover
     through October 31 the prior year's actual ERCs. 
         The estimated November 1, 1998 ERC rate adjustment
     of $0.0035 per therm is designed to recover, over the twelve
     month period ending October 31, 1999, the costs incurred
     over the initial period December 1992 through June 1998. 
     Northern proposes to file a new tariff, Original Page 70, in
     September 1998 which will contain the actual rate adjustment
     calculation.  The filing contained the following N.H.P.U.C.
     No. 8-Gas tariff pages which refer to the application of the
     ERC rate adjustment on Northern's firm sales and
     transportation rate schedules:
              Seventh Revised Page 2A;
              Twelfth Revised Page 23;
              Twelfth Revised Page 24;
              Thirteenth Revised Page 25;
              Thirteenth Revised Page 26;
              Thirteenth Revised Page 27;
              Thirteenth Revised Page 28;
              Twelfth Revised Page 29;
              Thirteenth Revised Page 30;
              Thirteenth Revised Page 31;
              Seventh Revised Page 53;
              Tenth Revised Page 60;
              Tenth Revised Page 61;
              Tenth Revised Page 62;
              Eleventh Revised Page 63;
              Original Page 67;
              Original Page 68; and
              Original Page 69.
         Commission Staff (Staff) has notified the
     Commission that it requires time to investigate the filing
     and supporting materials and, therefore, has requested that
     the proposed tariff pages be suspended.  Staff stated that
     the proposed ERC rate adjustment of $0.0035 per therm was
     not included on any of the referenced tariff pages; however,
     the tariff pages all refer to the ERC rate adjustment
     calculation that Northern proposes to file in September
     1998.  Staff has proposed that a full procedural schedule be
     established for the proceeding. 
         We have reviewed Staff's request and will suspend
     the proposed tariff pages to allow a thorough review of the
     filing and supporting materials.  Additionally, we direct
     Northern to file its ERC rate adjustment calculation on or
     before September 1, 1998 to allow sufficient time for Staff
     review prior to the hearings scheduled in October 1998.
         Based upon the foregoing, it is hereby
         ORDERED, that the tariff pages delineated above of
     Northern are SUSPENDED; and it is
         FURTHER ORDERED, that Northern shall file its ERC
     rate adjustment calculation on or before September 1, 1998.
         By order of the Public Utilities Commission of New
     Hampshire this thirteenth day of May, 1998.
      Douglas L. Patch    Bruce B. Ellsworth     Susan S. Geiger
          Chairman           Commissioner         Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary