DR 97-221
          Petition for Extension of Temporary Billing Surcharge 
     Order Nisi Providing Approval for Extension of Temporary Billing
                         O R D E R   N O. 22,984 
                               July 21, 1998

         On June 5, 1998, the Petitioner, Connecticut Valley
Electric Company, Inc. (CVEC), filed with the New Hampshire
     Public Utilities Commission (Commission) a request to extend a
     Temporary Billing Surcharge (TBS) for the purpose of recovery of
     a number of costs that the Company has (with one exception)
     deferred on its books.  This TBS originated in DR 96-170, the
     Company's base rate case, as a mechanism to collect its rate case
     expenses and the temporary rate recoupment resulting from that
     proceeding.  To date, the TBS has been calculated as a surcharge
     of 2.2% of the total electric bill, excluding winter months.  On
     October 15, 1997 the Company requested an extension of the TBS as
     a means of collecting its audited 1996 pilot program costs
     totaling $131,068.  By secretarial letter dated December 1, 1997,
     the Commission granted the Company's request.  Since those costs
     are nearly fully recovered at this time, the TBS as previously
     authorized will end in early July.
           At this time the Company is seeking to recover,
     through an extension of the TBS, a total of $533,427.  This
     includes pilot costs of $16,861; legal costs relating to the
     Wheelabrator litigation of $107,705; incremental ice storm costs
     of $2,652; and restructuring costs of $406,209.  CVEC also
     proposes that it be authorized to compute interest monthly at the
     prime rate on the uncollected TBS balance, beginning August 1,
     1998.  The Company also proposes to accrue carrying charges at
     the prime rate on all pilot and restructuring costs incurred and
     deferred subsequent to April 1, 1998 which are not being
     recovered at this time.
         Commission Staff has reviewed this request and
     recommended approval.  Based on Staff's review, we will approve
     the continuation of the TBS for recovery of the pilot costs and
     for the Wheelabrator litigation expenses.  We direct our Staff to
     audit such expenses as soon as practicable.  We have approved
     recovery of audited pilot costs previously, and find that
     continued recovery is appropriate.  Although we usually disfavor
     the use of a surcharge to recover litigation or other expenses
     that are traditionally reflected in base rates, we will allow the
     recovery of the Wheelabrator litigation expenses in the proposed
     manner because the Company's earnings appear insufficient to
     enable it to absorb these costs in base rates and because the
     expenses relate to a FERC action which the Commission fully
     supported.  It should be noted that the Company's request
     includes an estimate of litigation costs from May 1, 1998 through
     July 31, 1998 of $50,000.  We will support recovery of these
     costs, subject to audit and reconciliation through the Company's
     monthly report of the TBS.  In addition, we will approve the
     Company's proposal for the accrual of interest on the TBS balance
     of deferred costs, as these costs are approved for recovery, and
     the methodology is identical to that used in CVEC's FAC, PPCA and
     C&LMPA adjustment clauses.  However, we do not approve the
     accrual of interest on costs deferred but not yet approved for
     recovery.  Given the fact that such costs remain subject to audit
     and verification, it does not appear appropriate to provide for
     carrying charges on such deferred accounts.  
         We also do not approve the recovery through the TBS of
     the incremental ice storm costs.  The Company did not defer these
     costs but instead wrote them off.  In addition, the amount
     requested is minimal when considering that CVEC's base rates
     include an amount for storm costs on an on-going basis. 
     Therefore, such costs should not be considered for additional
         We do not believe that recovery of the Company's
     restructuring costs is appropriate at this time.  We believe that
     reasonable and necessary costs relating to DR 96-150 and other
     restructuring matters should be considered for recovery at the
     time that CVEC implements retail choice for its customers.  Until
     that time, these costs should remain in a deferred account.
         Based upon the foregoing, it is hereby 
         ORDERED NISI, that Connecticut Valley Electric Company,
     Inc. is authorized to continue the Temporary Billing Surcharge,
     at a level of 2.2% of electric bills, in order to recover
     $124,566 in pilot program costs and litigation expenses
     associated with the Wheelabrator matter, as discussed herein; and
     it is
         FURTHER ORDERED, that the Temporary Billing Surcharge
     continue until the above costs are collected in full, subject to
     final determination of the amounts upon completion of an audit by
     Commission Staff; and it is
         FURTHER ORDERED, that the Company continue to provide a
     monthly report of its TBS collections for so long as the TBS
     remains in effect; and it is
         FURTHER ORDERED, that pursuant to N.H. Admin. Rules,
     Puc 1604.03 or Puc 1605.03, the Petitioner shall cause a copy of
     this Order Nisi to be published once in a statewide newspaper of
     general circulation or of circulation in those portions of the
     state where operations are conducted, such publication to be no
     later than July 28, 1998 and to be documented by affidavit filed
     with this office on or before August 4, 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 August 11, 1998; 
     and it is
         FURTHER ORDERED, that any party interested in
     responding to such comments or request for hearing shall do so no
     later than August 18, 1998; and it is
         FURTHER ORDERED, that this Order Nisi shall be
     effective August 21, 1998, unless the Commission provides
     otherwise in a supplemental order issued prior to the effective
     date; and it is
         FURTHER ORDERED, that the Petitioner shall file a
     compliance tariff with the Commission on or before August 4,
     1998, in accordance with N.H. Admin. Rules, Puc 1603.02(b).
         By order of the Public Utilities Commission of New
     Hampshire this twenty-first day of July, 1998. 
        Douglas L. Patch    Bruce B. Ellsworth        Susan S. Geiger
            Chairman           Commissioner            Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary