DR 98-012
      Amended Offer of Settlement: Post-divestiture Tariff Pages
        Order Approving Tariff N.H.P.U.C. No. 17 - Electricity
                       O R D E R   N O.  23,005
                           August 31, 1998
         On August 17, 1998, Granite State Electric Company
(GSEC) filed with the Commission in accordance with Commission
Order No. 22,981 (July 15, 1998) in this docket a revision to its
tariff to reflect the retail tariff rates of GSEC effective after
New England Power Company divests substantially all of its
non-nuclear generation to USGen New England.  GSEC states that
all regulatory approvals required for the closing have been
granted and that it anticipates the closing will occur by
September 1, 1998.  The post-divestiture tariffs filed by GSEC
reflect a reduction in GSEC's stranded cost charge from the
pre-divestiture rate of 2.8 cents per kWh to 1.4 cents per kWh
and the elimination of the pre-divestiture Savings Credit. 
         GSEC proposes that the Commission approve the
post-divestiture tariff and rates effective upon the NEP/USGen
New England closing pursuant to N.H. Admin. Rules Puc
         The filing also reflects the elimination of the
Electricity Consumption Tax which GSEC states it prematurely
implemented in place of the Franchise Tax on July 1, 1998.  GSEC
cites the contingent enactment provision of RSA 83-E as support
for its reinstatement of the Franchise Tax.  Under RSA 83-E, the
Electricity Consumption Tax does not become effective until "30
days after the public utilities commission shall certify to the
commissioner of revenue administration that it has begun
implementing such order ..." pertaining to retail electric
competition as part of statewide electric restructuring.  Laws of
1997, 347:6, II.  GSEC proposes to reconcile any differences
between the revenues it collected from the Electricity
Consumption Tax and the revenues that would have been collected
under the Franchise Tax and either refund or surcharge that
         We have reviewed the proposed tariff pages and find
that they conform with GSEC's Amended Offer of Settlement as
filed by GSEC on July 10, 1998 and approved by this Commission on
July 15, 1998 by Order No. 22,981.  The closing of the NEP/USGen
transaction will bring additional rate reductions to GSEC's
customers consistent with the Amended Offer of Settlement and is
in the public good.   
         We will allow GSEC to reinstate the Franchise Tax.  The
applicable statute, Laws of 1997, 347:5,I, states that:

         If the statewide electric industry restructuring plan
         issued by order of the public utilities commission
         relative to competitive electric utility service
         requirements has not been implemented on or before
         January 1, 1998, this act shall take effect 30 days
         after the public utilities commission shall certify to
         the commissioner of revenue administration that it has
         begun implementing such order or any subsequent order
         relative thereto.

Based on our approval of the voluntary amended settlement filed
by GSEC and the New Hampshire Electric Cooperative's
restructuring proposal which we approved orally on August 17,
1998, we have begun on a utility-by-utility basis electric
restructuring; however, the statewide electric restructuring plan
has not been implemented generally nor have we certified to the
commissioner of revenue administration that we have "begun
implementing" our restructuring plan.  For those reasons, we will
allow GSEC to bill and collect the Franchise Tax in rates until
we issue an order otherwise.  
         Based upon the foregoing, it is hereby
         ORDERED, that Granite State Electric Company's proposed
post-divestiture tariff pages:
              First Revised Title Page
              First Revised Page 3
              First Revised Page 34
              First Revised Page 38
              First Revised Page 41
              First Revised Page 46
              First Revised Page 51
              First Revised Page 56
              First Revised Page 61
              First Revised Page 67
              First Revised Page 71
              First Revised Page 81
              First Revised Page 84
              Original Page 85;
are APPROVED effective with the sale of New England Power
Company's non-nuclear generating assets to USGen New England; and
it is 
         FURTHER ORDERED, that GSEC notify the Commission of the
day of the closing. 
         By order of the Public Utilities Commission of New
Hampshire this thirty-first day of August 1998.

               Douglas L. Patch     Bruce B. Ellsworth    Susan S. Geiger
                   Chairman            Commissioner         Commissioner

Attested by:

Thomas B. Getz
Executive Director and Secretary