DR 98-177
                      Granite State Electric Company
               1999 Conservation and Load Management Program
          Order Addressing Interventions and Procedural Schedule
                         O R D E R   N O.  23,067
                             November 13, 1998

         APPEARANCES:  Carlos A. Gavilondo, Esq., for Granite
     State Electric Company; David W. Marshall, Esq., for the
     Conservation Law Foundation; Heidi L. Kroll for the Governor's
     Office of Energy and Community Services; Andrew Bodnarik for the
     New Hampshire Department of Environmental Services, Air Resources
     Division; Kenneth E. Traum for the Office of the Consumer
     Advocate for residential ratepayers; and Michelle A. Caraway and
     James J. Cunningham, Jr. for the Staff of the New Hampshire
     Public Utilities Commission.
               On October 5, 1998, Granite State Electric Company
     (GSEC) filed with the New Hampshire Public Utilities Commission
     (Commission) a petition for approval of its 1999 Conservation and
     Load Management (C&LM) Program Proposal effective for the period
     January 1, 1999 through December 31, 1999.  GSEC seeks approval
     of a C&LM budget of $2,283,900 with a projected incentive of
     $298,589.  GSEC proposes to continue its currently approved C&LM
     programs, with some modifications.  GSEC also proposes a new
     Efficient Clothes Washer Program and to establish a $100,000
     set-aside for initiatives recommended by the New Hampshire Energy
     Efficiency Working Group (Working Group).  The surcharges
     associated with the 1999 C&LM Program are $0.00179 per
     kilowatt-hour (kWh) for the residential class and $0.00394/kWh
     for the commercial and industrial (C&I) class.    
               By an Order of Notice issued October 9, 1998, the
     Commission scheduled a prehearing conference for October 29,
     1998, set deadlines for intervention requests and objections
     thereto, outlined a procedural schedule, and required the Parties
     and Commission Staff (Staff) to summarize their positions with
     regard to the filing for the record.  On October 19, 1998, the
     Conservation Law Foundation (CLF) filed a Petition to Intervene. 
     On October 26, 1998, the Governor's Office of Energy and
     Community Services (ECS) filed a Motion for Full Intervention. 
     On October 30, 1998, the New Hampshire Department of
     Environmental Services, Air Resources Division (DES) filed a late
     Motion for Full Intervention.  There were no objections to CLF's
     and ECS' motions to intervene.  DES appeared at the October 29,
     1998 prehearing conference and announced that it would be filing
     its motion to intervene within a couple of days.  No party
     objected to DES' motion at the prehearing conference or
     subsequently through a filing with the Commission.  The Office of
     the Consumer Advocate (OCA) is a statutorily recognized
               At the prehearing conference, GSEC, CLF, OCA, DES, ECS
     and Staff modified certain dates of the procedural schedule as
     outlined in the Order of Notice.  The revised procedural schedule
     agreed to is as follows:
          Data Requests by Staff and            November 4, 1998 
          Company Data Responses               November 12, 1998 
          Technical Session @ 8:30 a.m.        November 18, 1998 
          Testimony by Staff and                December 1, 1998 
          Data Requests by the Company          December 4, 1998 
          Data Responses by Staff and           December 9, 1998 
          Settlement Conference at 10:00 a.m.  December 14, 1998 
          Filing of Settlement Agreement,      December 15, 1998 
             if any
          Hearing at 10:00 a.m.                December 16, 1998.
               At the prehearing conference, in accordance with the
     Order of Notice, GSEC, CLF, OCA, DES, ECS and Staff stated their
     positions with regard to the filing for the record.  GSEC stated
     that it proposed to offer the same residential and C&I programs
     as were approved for 1998 with some changes.  GSEC used the same
     methodology for screening its programs for cost-effectiveness and
     for calculating the incentives as it has used in previous years. 
     Some specific changes noted by GSEC were: a reduction in the
     budget for the EnergyWise Program reflecting GSEC's belief that
     it has identified all the multifamily dwellings in its service
     territory to which it can provide services; the elimination of
     the direct rebates for compact fluorescent light bulbs due to a
     recent study indicating significant market awareness and
     substantial penetration in the market; the inclusion of the
     TumbleWash program as part of a joint regional program; and minor
     refinements to the C&I programs to reflect technological advances
     and improvements in standards.  GSEC also stated that it has
     proposed a $100,000 set-aside fund to implement recommendations
     proposed by the Working Group and approved by the Commission that
     could be implemented in 1999 without any significant disruption
     in GSEC's rates, although GSEC stated that all C&LM surcharges
     are fully reconciling.  Finally, GSEC stated that the proposed
     1999 overall budget is slightly lower than the annualized 1998
               CLF stated that it is in general support of GSEC's
     proposed filing.
               OCA stated that its comments are directed at the
     residential side of GSEC's filing only.  OCA stated that it was
     premature to set-aside $50,000 to implement and fund energy
     efficiency initiatives recommended by the Working Group and,
     instead, preferred that those dollars stay in the pockets of the
     residential customers.  OCA noted that GSEC's customers have
     choice and because of that, OCA questioned what, if any,
     cost-effectiveness test should be used and whether energy and
     capacity costs should be used in the calculation of
     cost-effectiveness.  OCA also detailed concerns with the large
     projected overcollection for December 1998 in the C&LM funding,
     whether it is necessary to offer a joint utility lighting
     catalog, and whether the efficient clothes washer market has
     already been transformed.
               DES took the opportunity to compliment GSEC on its
     historical C&LM programs.  DES stated that C&LM programs are
     needed to reduce damage to the environment, to protect the public
     health and to prevent pollution.  DES stated that externalities
     should be included in the determination of the cost-effectiveness
     of C&LM programs.  DES stated that it is currently participating
     in the Working Group and that it has general concerns about the
     need to keep generating capacity at a level that will not
     encourage pollution.
               ECS stated that based on its preliminary review of the
     GSEC filing, it was very supportive of the direction that GSEC
     appears to be headed as well as a continued commitment to a
     meaningful level of energy efficiency programs.  ECS is pleased
     with GSEC's proposed mix of traditional programs and market
     transformation initiatives for all of its customer classes.  ECS
     is interested in gaining a better understanding of the details
     behind the proposals and the assumptions that have gone into it. 
     ECS stated that it planned to participate in formal and informal
     information exchanges as appropriate.  ECS anticipates being able
     to support the filing in general although it reserves the right
     to propose modest changes as appropriate.  ECS appreciates GSEC's
     on-going commitment to the Working Group and values its
     participation.  However, ECS is concerned with the potential of
     diverting limited energy efficiency dollars away from programs
     that can benefit customers more directly with the proposed
     set-aside of $100,000.  ECS wants to explore how GSEC proposes to
     use these funds and suggests that the parties consider
     alternative  uses.
               Staff stated that it shared similar concerns to those
     addressed by OCA in its opening statement.  Staff stated that it
     wanted to discuss program designs associated with both the
     TumbleWash program and the lighting catalog that has been
     proposed by GSEC.  Staff also believes that it is premature to
     set-aside $100,000 to fund recommendations of the Working Group
     that are yet to be approved by the Commission.  Given that the
     Working Group has just hired a consultant and is making some
     headway in their discussions, Staff believes there is a serious
     question as to whether recommendations of the Working Group will
     be implemented in time in 1999 to require any drastic changes to
     GSEC's filing.  Staff believes that GSEC has the right to
     petition the Commission to request a change to the C&LM program
     in 1999 should such action be necessary.
               Also at the prehearing conference, GSEC counsel
     requested a waiver of Rule Puc 203.01 which requires 14 days
     advance notification of a hearing.  Counsel stated that although
     the Order of Notice was dated October 9, 1998, it was faxed to
     GSEC on October 12, 1998, the Columbus Day holiday; thus, GSEC
     did not receive the fax until October 13, 1998.  Although GSEC
     published the Order of Notice in both the Valley News and the
     Union Leader, the Union Leader required additional lead-time and
     was unable to publish the legal notice until October 16, 1998,
     one day after the deadline required by the Order of Notice.  GSEC
     stated that it did serve complete copies of its filing upon the
     CLF, ECS, OCA, and Staff so that they were aware of the filing. 
     GSEC believes that the one day lapse did not impact any party's
     ability to intervene and that it did not disrupt the proceeding.
               We find the proposed procedural schedule, as modified
     by the parties, to be reasonable and will, therefore, approve it
     for the duration of the case.  Additionally, we will grant the
     motions to intervene filed by CLF, ECS, and DES.
               Insomuch as all motions to intervene have been granted
     and no party was denied intervention, we will waive Rule Puc
     203.01 which requires notice of a hearing at least 14 days in
     advance of the date.
               Based upon the foregoing, it is hereby 
               ORDERED, that the procedural schedule delineated above
     is APPROVED; and it is
               FURTHER ORDERED, that the motions to intervene filed by
     the Conservation Law Foundation, the Governor's Office of Energy
     and Community Services, and the Department of Environmental
     Services, Air Resources Division are GRANTED; and it is
               FURTHER ORDERED, that GSEC's request at the hearing to
     waive Rule Puc 203.01 is GRANTED.
               By order of the Public Utilities Commission of New
     Hampshire this thirteenth day of November, 1998.
       Douglas L. Patch     Susan S. Geiger       Nancy Brockway
           Chairman           Commissioner        Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary