DR 98-195
    Petition for Authority to Operate in the City of Berlin
                 Order Approving Interventions
                 Deferral of Procedural Schedule
                    O R D E R   N O.  23,142
                        February 9, 1999
       APPEARANCES:  McLane, Graf, Raulerson & Middleton by
     Steven V. Camerino, Esq. on behalf of EnergyNorth Natural Gas,
     Inc.; Upton, Sanders and Smith by Robert Upton, Esq. on behalf of
     the City of Berlin, NH; the Office of the Consumer Advocate by
     Kenneth E. Traum on behalf of residential utility consumers; and
     Larry S. Eckhaus, Esq. for the Staff of the New Hampshire Public
     Utilities Commission.
               On November 3, 1998, EnergyNorth Natural Gas, Inc.
     (ENGI or the Company) filed with the New Hampshire Public
     Utilities Commission (Commission), pursuant to RSA 374:22 and 26,
     a Petition for Authority to Operate in the City of Berlin
     (Petition) accompanied by the prefiled testimony of Rate Analyst
     Mark Savoie.  According to the Petition, natural gas supplies
     will be provided by interconnection with the Portland Natural Gas
     Transmission System (PNGTS), presently under construction. The
     Company is negotiating with PNGTS for an interconnection and
     supply.  The impetus for the Petition is the construction of the
     North Country Medium Security Prison (Prison) in Berlin.
               Staff promulgated a series of thirty-two (32)
     interrogatories intended to elicit additional information
     regarding the proposal on November 6, 1993.  On November 13,
     1998, the Commission issued an Order of Notice for a Prehearing
     Conference on December 11, 1998 and for a public hearing in
     Berlin on January 6, 1999.
          1.   Positions Of The Parties And Staff
               a.   EnergyNorth
               ENGI reports that the State of New Hampshire Department
     of Corrections (DOC) is currently constructing in Berlin a new
     prison complex, which the Department intends to equip with
     facilities that utilize natural gas.  The Prison will be located
     approximately one-half mile from the PNGTS pipeline, which is
     currently under construction, and the DOC is presently in
     negotiation with ENGI to provide natural gas service to the
               ENGI also states that it anticipates additional
     development around the prison complex as well as interest from
     governmental and private organizations in the City of Berlin
     which over time may result in extension of the gas distribution
     system. Consequently, ENGI asks that it be granted the service
     territory for the entire City of Berlin.  Moreover, as there
     appears to be no opposition to ENGI's serving the Prison, it
     seeks expeditious treatment regarding the prison even if it
     requires bifurcation to address, first, service to the Prison
     and, later, the remainder of the City.
               b.   City of Berlin
               On November 10, 1998, the Berlin City Manager wrote the
     Commission supporting and endorsing the Petition on behalf of the
     Mayor and City Council of Berlin.  Subsequently, on December 7,
     1998, the City filed a Motion to Intervene partially in favor of
     the Petition, but subject to certain conditions and concerns
     which were restated at the Prehearing Conference, including:
     limiting the extent of the franchise to an area encompassing the
     Prison which will be constructed in 1999; reserving to the City
     of Berlin certain areas of the City for the delivery of wholesale
     natural gas; establishing the appropriate rates for the service 
     area which may, or may not, be ENGI's existing rates; determining
     whether the federal and state tariffs for service from the take
     station will provide the maximum benefit possible for the City
     into the future; ensuring that the take station constructed by
     PNGTS will be appropriately sized and will not be for the
     exclusive use of ENGI; and, requiring that approval of this
     Petition would not ultimately impose any interference with
     propane or petroleum distillate storage or distribution in the
     City.  The City did agree that it seemed appropriate to proceed
     expeditiously with service to the Prison and did not disagree
     with the Company's dual track suggestion.
               c.   Office of Consumer Advocate
               The OCA is very supportive of bringing natural gas to
     the north country and supports the Petition, but raises questions
     similar to those posed by the City as well as whether there will
     be any improper or unreasonable subsidization of ENGI's
     activities by ratepayers.
               d.   Staff
               Staff noted the basic issues related to whether ENGI
     has the managerial, technical and financial capability to operate
     the proposed service territory and whether granting the proposed
     service territory would be for the public good. In addition,
     Staff raised questions concerning: the present and future plans
     to serve the City; whether the contract with the Prison will be a
     special contract pursuant to Puc 1606.01 and the Company's
     tariff; the costs of the main extension to the Prison; whether
     there are any bypass issues; and, whether cogeneration will be
     installed at the Prison.
                              e.   Other Comments
               Prior to the prehearing conference on December 11,
     1998, letters in support of ENGI's petition were received from
     District 1 Executive Councilor Raymond S. Burton, District One
     Senator Frederick W. King, Hank Risley, Commissioner of the
     Department of Corrections, George M. Bald, Commissioner of the
     Department of Resources and Economic Development, and the
     Northern White Mountain Chamber of Commerce.
                    2.   Procedural Schedule
               Following the Prehearing Conference, the parties and
     Staff met in a Technical Session to discuss the above issues and
     develop a procedural schedule to govern the remainder of this
               At the Public Hearing in Berlin, the Company reiterated
     its proposal to initially serve the Prison and later the rest of
     the City of Berlin as the opportunity presents itself, noting
     that expansion to the whole City may not be economical and ENGI
     looks forward to a partnership arrangement with the City and
     others to help make the investment to bring natural gas to other
     parts of the City.  The Company stated that it had met with
     business leaders, the Chamber of Commerce and the City Council,
     in addition to the support from others referred to above.  Mr.
     Richard Demers, ENGI Vice President of Marketing, stated that the
     City Council had voted unanimously in support of the Company's
     franchise request.  Interim City Manager Robert Theberge
     confirmed the City Council's full support of the proposed
               Mr. Hank Risley, DOC Commissioner, indicated that the
     Prison was sited and designed to use natural gas because of the
     proximity of the PNGTS pipeline.  The current schedule was to
     have gas available by October, 1999 in time for completion of the
     Prison by December, 1999.  Mr. Demers stated that the Company is
     planning to install the main from the PNGTS pipeline to the
     Prison in the spring of 1999 to meet DOC's timetable.
               Mr. Albin Johnson, Berlin Water Works Superintendent
     submitted comments relating to the location of the take station
     and protection of the municipal well and aquifer recharge area,
     and the possibility of the Water Works becoming a customer.
          1.   Interventions
               At the prehearing conference, the Commission approved
     the intervention of the City of Berlin, there being no
     objections. The Office of the Consumer Advocate (OCA) appeared on
     behalf of residential utility consumers pursuant to RSA 363:28
               2.   Procedural Schedule
               Inasmuch as the contracts between ENGI and the DOC, and
     ENGI and PNGTS, have not been finalized, the Parties and Staff
     agreed to defer establishing a procedural schedule until the
     contract(s) were executed and filed with the Commission.  At that
     time, the Parties and Staff will develop a procedural timetable
     recognizing ENGI's and the DOC's construction and service
               Based upon the foregoing, it is hereby 
               ORDERED, the Commission will await the recommendation
     of the Parties and Staff regarding the procedural schedule for
     the remainder of this proceeding.
               By order of the Public Utilities Commission of New
     Hampshire this ninth day of February, 1999.
           Douglas L. Patch       Susan S. Geiger     Nancy Brockway
               Chairman           Commissioner          Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary