SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-1/A
AMENDMENT NO. 4
TO
FORM U-1
APPLICATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NGE Resources, Inc.
One Commerce Plaza
Suite 2006A - 20th Floor
Albany, New York 12260
(Name of company or companies filing this statement and
address of principal executive offices)
Daniel W. Farley
c/o NGE Resources, Inc.
One Commerce Plaza
Suite 2006A - 20th Floor
Albany, New York 12260
Telephone: (518) 434-3014
(Names and addresses of agents for service)
Copies to:
Leonard Blum, Esq.
Huber Lawrence & Abell
605 Third Avenue
New York, New York 10158
Telephone: (212)682-6200
Joanne Rutkowski, Esq.
LeBouef, Lamb, Greene & MacRae, L.L.P.
1875 Connecticut Avenue, N.W.
Washington, D.C. 20009
Telephone: (202) 986-8000
<PAGE>
This Amendment No. 4 on Form U-1/A to the Form U-1 of NGE
Resources, Inc. is being filed for the purpose of amending Item 6
by adding the exhibits listed below.
Item 6. Exhibits and Financial Statements.
The following exhibits are being filed with this Amendment
No. 4:
NO. DESCRIPTION METHOD OF FILING
D-4 Order of the PSC modifying and Filed herewith.
approving the restructuring
agreement.
F-1 Preliminary opinion of counsel. Filed herewith.
I-1 Fees, Commissions and Expenses. Filed herewith.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned company has duly caused this
Amendment No. 4 to be signed on its behalf by the undersigned
thereunto duly authorized.
NGE Resources, Inc.
Date: February 5, 1998 By Daniel W. Farley
Daniel W. Farley
Secretary
EXHIBIT D-4
STATE OF NEW YORK
PUBLIC SERVICE COMMISSION
At a session of the Public Service
Commission held in the City of
Albany on January 21, 1998
COMMISSIONERS PRESENT:
John F. O'Mara, Chairman
Maureen O. Helmer
Thomas J. Dunleavy
CASE 96-E-0891 - In the Matter of New York State Electric & Gas
Corporation's Plans for Electric Rate/
Restructuring Pursuant to Opinion No. 96-12.
CASE 93-E-0960 - Proceeding on Motion of the Commission as to the
Rates, Charges, Rules and Regulations of New
York State Electric and Gas Corporation - Tariff
Filing Governing the Sale of Economic
Development Power Generated by the New York
State Power Authority to Specific Customers
Recommended by the Allocation Board.
CASES 94-M-0349 et al. - New York State Electric & Gas
Corporation - Electric Rates.1
ORDER ADOPTING TERMS OF SETTLEMENT
SUBJECT TO MODIFICATIONS AND CONDITIONS
(Issued and Effective January 27, 1998)
BY THE COMMISSION:
INTRODUCTION
Opinion No. 96-12 required New York State Electric & Gas
Corporation (NYSEG or the company), among others, to file a
proposed plan for rates/restructuring, no later than October 1,
1996. Despite the parties' efforts to negotiate a resolution of
the filings, no agreement was reached within the period allotted,
and testimony was filed by the parties on March 25, 1997. At our
direction, the testimony addressed not only the rate/
restructuring proceeding, but a pending case involving the rates
for the delivery of power from the New York Power Authority
(NYPA) to Economic Development Power (EDP) customers,1, as well
as a 1995 rate settlement in which second- and third-year rate
increases initially had been authorized. Evidentiary hearings
were held during May 1997 and briefs were filed with the
Administrative Law Judge in June and July.
_________________________
1 These include cases 94-M-0349, 93-E-0284, 93-E-0664,
95-M-0017, 95-E-0425, and 95-E-0426. See Opinion No. 95-17
(issued September 27, 1995).
1 Case 93-E-0960.
<PAGE>
Prior to the issuance of a recommended decision, NYSEG
submitted an "Agreement Concerning the Competitive Rate and
Restructuring Plan of New York State Electric & Gas Corporation"2
(Settlement), which purported to resolve by agreement all of the
issues in all of the cases. The Settlement was signed by Staff
of the Department of Public Service (Staff), NYSEG, the New York
State Department of Economic Development (DED), NYPA, the
National Association of Energy Services Companies (NAESCO), and
the Joint Supporters.3 On October 23, 1997, statements
supporting the Settlement were filed by the signatories, and
NYSEG filed its environmental assessment form (EAF). On November
1, 1997, statements in opposition were filed by Multiple
Intervenors (MI), Wheeled Electric Power Company (WEPCO), the New
York State Department of Law (DOL), the Public Utility Law
Project (PULP), Public Interest Intervenors (PII), the Retail
Council, the New York State Consumer Protection Board (CPB), the
Independent Power Producers of New York jointly with Enron
Capital & Trade Resources (IPPNY/Enron), and Tioga/Tompkins
Counties (Counties). Evidentiary hearings to review the
Settlement were held in November 1997 and public statement
hearings were held in Lockport, Plattsburgh, Johnson City,
Auburn, and Hudson on various dates in October and November.
A recommended decision was issued on December 3, 1997, in
which the Judge found that the Settlement contained the basics of
an acceptable plan, but that certain provisions should be
reexamined by the parties. The recommended decision concluded
that the Settlement should be returned to the parties for further
negotiations on specified provisions. Briefs on exceptions were
filed on December 22, 1997 by Staff, the company, MI,
IPPNY/Enron, PULP, PII, the Counties, CPB, Joint Supporters,
NAESCO, and WEPCO.1 Replies to exceptions were filed on December
17, 1997 by Staff, the company, MI, DED, IPPNY/Enron, and CPB.
SETTLEMENT SUMMARY
In accordance with our directions, the submitted Settlement
contains a five-year rate plan, provisions concerning the
recovery and mitigation of strandable costs, a phased schedule
for providing retail access and unbundled tariffs, a proposed
holding company corporate structure, a funding source for public
policy programs, reduced delivery rates for EDP power, and a
number of other terms. These terms are briefly summarized below.
_________________________
2 A copy of the Settlement submitted on October 9, 1997, is
attached as Appendix A.
3 The Joint Supporters is a voluntary unincorporated
association of consumers and providers in favor of
competitive opportunities for electric service.
1 DOL filed a letter supporting the remand recommendation.
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Under the Settlement rate plan, the company agrees to:
forgo the two previously approved rate increases; reduce large
industrial and commercial customer rates by 5% per year for each
of the next five years; reduce the rates for all other customers
by 5% in the fifth year of the plan; and, reduce EDP wheeling
rates by between 35% and 56%. The plan contains a 12% return on
equity (ROE) earnings cap with all excess earnings to be used to
benefit ratepayers and a 9% ROE earnings trigger that permits the
company to petition for rate relief if earnings fall below that
level.
Retail access under the Settlement occurs in three phases,
with all customers being provided retail access by August 1999.
Also by that time, the company has agreed to auction all of its
fossil generating units and to structurally separate its business
into a regulated wires company (RegSub) and a competitive
generating company (GenSub), both owned by a holding company
(HoldCo). Finally, the company has agreed to urge the cotenants
of the Nine Mile II Nuclear Generating Unit (NM II) to auction
that unit.
In the public policy program area, the Settlement sets aside
approximately $13 million (approximately 1 mill/kWh) per year for
the first three years of the rate plan to dedicate to public
policy programs. The Settlement does not address specific
programs, and the record indicates that the company's existing
low-income assistance program (Fresh Start) may be discontinued.
Finally, the Settlement sets forth a customer service incentive
involving two measures of the reliability of NYSEG's electric
service. The incentive is a penalty-only mechanism, providing a
maximum annual penalty of 15 basis points (bp).
The terms of the Settlement, briefly recited above, will
offer a generally sound regulatory framework for NYSEG, its
competitors, and its customers in the transition to fully
competitive generation and energy services markets. Having
reviewed these terms, the recommended decision, and the parties'
exceptions, however, there are several aspects of the Settlement
and other important issues that are not resolved to our
satisfaction. For this reason, we are adopting the terms of the
Settlement subject to the following modifications and conditions:
1. All industrial customers not eligible for 5% annual
rate decreases and not taking service under special
contracts, will be provided retail access as of
August 1, 1998.
<PAGE>
2. The company will file marginal cost-based tariffs1
within 30 days of this order applicable to the
customers' incremental energy usage above historic
levels for all industrial and commercial customers
who are not eligible for 5% annual rate decreases.
3. If, but for the use of accelerated depreciation or
amortization, the company's earnings would have
exceeded the 12% earnings cap, it shall request
approval from the Commission to use such accelerated
depreciation or amortization. The company must request
such approval as part of its reporting under the annual
earnings cap. It should be understood that publicly
disclosed earnings, which may reflect accelerated
depreciation or amortization, will not be considered
the basis upon which the earnings cap will be applied.
4. The Commission is reserving the right to reexamine the
reasonableness of the generation back-out credit
specified in the Settlement in the event market prices
exceed the Settlement credit.
5. Regarding the company's provider of last resort
responsibility to offer a low-income assistance
program:
a. The company will continue its Fresh Start program
until a replacement program is approved;
b. The company will file within 30 days of this order
a proposed low-income assistance program, designed
to provide service to all HEAP-eligible customers
(an estimated 37,000) over the term of the rate
plan. It is estimated that the program will cost
about $5 million annually. The company will
consider in designing the program the best
practices of other New York utilities and may
propose a program operated by a third party. The
company's proposal will be subject to comment by
interested parties, who may also submit alternate
proposals.
c. Of the approximately $5 million annual program
cost, $2.5 million will be obtained from the $13
million set-aside in the Settlement and will be
dedicated to energy efficiency and other similar
low-income programs approved by the Commission for
SBC funding. For the first few years of NYSEG's
_________________________
1 The company is urged to consult with Staff prior to filing
this tariff. We expect the rates to include some
contribution for system costs.
<PAGE>
administration of the program,1, the balance of
program costs will be covered by the proceeds from
the sale of excess land.1 Thereafter, it is
assumed that savings from reduced uncollectibles
and a reduced level of arrearages will equal or
exceed total program costs.2
6. The Settlement is modified by adding the environmental
provisions approved in the Con Edison proceeding, as
set forth in Appendix B of this order.3 In addition,
we recognize that we must carefully consider
alternative energy sources during the transition to
competition and if opportunities present themselves
(such as through the passage of securitization
legislation), we will evaluate potential ways to
accomplish further environmental benefits through
environmental protection and energy efficiency
programs.
7. The customer service incentive program (penalty only)
will consist of five indicators: the two set forth in
the Settlement and PSC complaint rates, overall
customer satisfaction index, and contact customer
satisfaction index as described in Appendix C of this
order. Each of the five indicators will carry the
possibility of a maximum annual penalty of 8 bp, or a
total maximum annual penalty of 40 bp. All other
aspects of the service incentive program will remain as
set forth in the Settlement.
8. No New York State utility or New York State utility-
affiliated load serving entity may be denied permission
to participate in NYSEG's retail access program under
the reciprocity provisions of the Settlement (Appendix
A, p. 24) unless prior approval is granted by the
Commission.
_________________________
1 NYSEG's administration of the program may be re-examined if
its program development and implementation is not
satisfactory.
1 Funding from this source will be limited to $7.5 million over
the first three years of the program.
2 The cost effectiveness of the program will be monitored by
Staff and the company. The fourth and fifth year funding of
the program will be revisited during the third year of the
rate plan.
3 Cases 96-E-0897 et al., Consolidated Edison Company of New
York, Inc. - Rate/Restructuring Proceeding, Opinion No. 97-16
(issued November 3, 1997), mimeo pp. 43, 66; Order Adopting
Terms of Settlement Subject to Conditions and Understandings
(issued September 23, 1997), Appendix A, pp. 27, 54-55.
9. The following clause regarding remedies for RegSub
violations as approved in the Con Edison proceeding
shall be incorporated into the Settlement.
The Commission may impose on RegSub remedial action
(including redress or penalties, as applicable) for
RegSub's violations of the standards of competitive
conduct set forth in the Settlement. If the
Commission finds that RegSub has engaged in a
consistent pattern of material violations of the
standards of competitive conduct, it shall provide
RegSub notice and a reasonable opportunity to remedy
such conduct. If RegSub fails to remedy such conduct
within a reasonable period after receiving such
notice, the Commission may take remedial action with
respect to HoldCo to prevent RegSub from further code
of conduct violations. Such remedial actions may
include directing the HoldCo to divest the
unregulated subsidiary , or some portion of the
assets of the unregulated subsidiary, that is the
subject of RegSub's consistent pattern of material
violations but exclude directing the HoldCo to divest
RegSub or imposing a service territory restriction on
the unregulated subsidiary. If the HoldCo is
directed to divest an unregulated subsidiary, it may
not thereafter, without prior Commission approval,
use a new or existing subsidiary of the HoldCo to
conduct within its service territory the same
business activities as the divested subsidiary (e.g.,
energy services). RegSub and the HoldCo may exercise
any or all of their administrative and judicial
rights to seek a reversal or modification of remedial
actions ordered by the Commission and may seek to
obtain any and all legal and/or equitable relief from
such remedial actions, including but not limited to
injunctive relief. Neither NYSEG nor its affiliates
will challenge the Commission's authority to
implement this paragraph.1
10. The EDP delivery rates set forth in the Settlement
shall be frozen during the term of the five-year rate
plan, in the same manner as other rates are frozen in
the Settlement.
11. We understand the Settlement to provide (Appendix A,
p. 27) the company with no more than a reasonable
opportunity to recover all prudent NM II costs, subject
to our duty to set just and reasonable rates, and this
understanding supersedes any contrary language or
interpretation of the Settlement.
_________________________
1 Cases 96-E0897 et al., supra, Order Adopting Terms of
Settlement Subject to Conditions and Understandings, Appendix
A, p. 50.
<PAGE>
12. Our adoption of the Settlement's terms is also subject
to the express condition that NYSEG is committed to
cooperate in the development of the infrastructure
(e.g., independent system operator, power exchange,
etc.) needed to allow competition in New York.
Based on the above modifications, both PACE Energy Project
(a member of PII) and the CPB have indicated their agreement with
the Settlement, as adopted.
STATE ENVIRONMENTAL QUALITY REVIEW ACT EVALUATION
In conformance with the State Environmental Quality Review
Act (SEQRA), we issued on May 30, 1996 a Final Generic
Environmental Impact Statement (FGEIS), which evaluated the
action adopted in Case 94-E-0952. We also required individual
utilities to file an environmental assessment of their
restructuring proposals. NYSEG filed its EAF concerning the
Settlement on October 23, 1997.
The information provided by NYSEG in its EAF, the parties'
comments and responses, and other information were evaluated in
order to determine whether the potential impacts resulting from
adoption of the Settlement's terms would be within the bounds and
thresholds of the FGEIS adopted in 1996. The analysis examined
several areas of potential impacts including the potential for
increased air emissions due to load growth from reduced rates and
reduced demand side management, and the potential incentive to
over-invest in utility plant.
Arguably, all of the potential impacts need not be
considered given that some result from Type II exempt rate
actions. In any event, however, based on these analyses, the
potential environmental impacts of the Settlement are found to be
within the bounds and thresholds evaluated in the FGEIS.
Therefore, no further SEQRA action is necessary. The final EAF
will be appended to the opinion to be issued later.
DISCUSSION
Taking into account our overall responsibility to set just
and reasonable rates, the company's statutory burden of proof,
and our settlement guidelines, and having considered the
evidence, comments, arguments, and EAF information, the terms of
the Settlement, subject to the above described modifications and
conditions, are found to be reasonable and in the public
interest.
Among other things, these terms will help NYSEG consumers
save or avoid $725 million of additional charges for electricity
in the next few years and this will help attract businesses and
stimulate economic activity. These savings will be achieved by
substantial rate reductions over the term of the Settlement for
the largest businesses in the NYSEG territory, a rate reduction
for all other customers in year five, and by ensuring that
previously approved rate increases will not become effective.
The Settlement's terms also call for prompt divestiture of all
the utility's fossil generation, thereby mitigating strandable
costs and providing an environment for a robust, competitive
electric generation market, and access to that market will be
available to all NYSEG customers by August 1, 1999. With this
framework and expected competition in the energy services sector,
customers can expect to receive electricity bills lower than
otherwise would be the case and enjoy greater choice of energy
providers and services. At the same time, the Settlement's terms
as modified fairly address environmental concerns and cost-
effective low-income assistance during the transition to a fully
competitive market. These are the essential elements of the
competitive electricity market envisioned for New Yorkers and for
the transition to that market.
Accordingly, the Settlement's terms are adopted in their
entirety subject to the modifications and conditions listed above
and the Settlement terms are incorporated by reference into this
order. Inasmuch as the terms of the Settlement are interrelated,
as are our modifications and conditions listed above, if any
term, condition, or understanding is modified, vacated, or
otherwise materially affected on judicial review, we may
reexamine our entire decision.
Subsequent to the issuance of this abbreviated order, we
shall issue a more comprehensive opinion and order describing the
bases for our decision, and containing the final EAF. The
statute of limitations for filing petitions for rehearing or
clarification of our decision will be deemed to run from the date
of issuance of that opinion.
The Commission orders:
1. The terms of the Settlement filed in these proceedings
dated October 9, 1997 (Settlement), with the modifications and
conditions described above and subject to the company's
unconditional acceptance of this order, are adopted in their
entirety and are incorporated as part of this order.
2. The potential environmental impacts of these terms are
within the bounds and thresholds evaluated in the 1996 FGEIS, and
therefore no further SEQRA action is necessary.
3. New York State Electric & Gas Corporation (NYSEG or the
company) must submit a written statement of unconditional
acceptance of the modifications and conditions contained in this
order, signed and acknowledged by a duly authorized officer of
NYSEG, by January 28, 1998. This filing date may be extended by
a maximum of one week if the company files its consent to further
extend its rate case suspension periods by a like amount. This
statement should be filed with the Secretary of the Commission
and served on all parties in this proceeding.
4. By not later than January 28, 1998, NYSEG shall cancel
the tariff leaves listed in Appendix D to this order. If the
company extends its rate case suspension periods, the Appendix D
tariff leaves shall be cancelled no later than one day before the
end of the extended suspension period.
5. NYSEG is directed to file by February 6, 1998, on not
less than one day's notice, such tariff amendments as are
necessary to effectuate the retail access program and rate
reductions for large customers contemplated by the Settlement as
adopted. NYSEG is also directed to file by February 25, 1998, to
become effective April 1, 1998, such tariff amendments as are
necessary to effectuate the rate reductions for incremental
energy usage by small commercial and small industrial customers
contemplated by the Settlement as adopted. The company shall
serve copies of its filings upon all parties to these
proceedings. Any comments on the filing to effectuate the retail
access program and rate reductions for large customers must be
received at the Commission's offices within 20 days of service of
the company's proposed amendments. Any comments on the filing to
effectuate the rate reductions for incremental energy usage must
be received at the Commission's offices within ten days of
service of the company's proposed amendments. The amendments
shall not become effective on a permanent basis until approved by
the Commission.
6. On or before March 2, 1998 NYSEG shall file a proposed
low-income program as contemplated by the Settlement as adopted.
7. To the extent exceptions to the recommended decision
issued in these proceedings on December 3, 1997 are not moot, or
are otherwise granted, they are denied.
8. NYSEG, in cooperation with Staff, shall monitor the
environmental impacts of electric restructuring resulting from
this order.
9. Cases 94-M-0349, 95-E-0425, 95-E-0426, and 93-E-0960 are
closed.
10. Case 96-E-0891 is continued.
By the Commission,
(SIGNED) JOHN C. CRARY
Secretary
<PAGE>
APPENDIX A
(The Agreement Concerning the Competitive Rate and
Restructuring Plan of NYSEG was filed as
Exhibit D-3 - Restructuring Agreement -
in Amendment No. 1 to Form U-1.)
<PAGE>
APPENDIX B
<PAGE>
APPENDIX B
Page 1 of 2
4. The Company agrees to address certain restructuring-related
issues raised by the Natural Resources Defense Council and
others as follows:
Deferral of T&D Capital Projects:
The Company will continue to develop detailed annual
forecasts of transmission and distribution ("T&D")
capital budget requirements and will identify for each
major T&D project (i.e., projects of $10 million or
more), the location, reason for project, scope of
project, projected capital costs, appropriate load and
other data. The Company will also perform load
monitoring consisting of monitors at a significant
sample of the transmission and area substations
scheduled for expansion/upgrade in the five-year T&D
capital plan. The Company will evaluate and implement
cost-effective measures as alternatives to major T&D
projects that defer major T&D system projects through
the use of technologies or services that could reduce
peak T&D loads. For such cost-effective projects,
consideration will be given to technologies or services
that minimize the environmental impacts of electricity
usage including demand side and other new technologies
where practicable. Con Edison will continue to seek to
minimize costs and environmental impacts for T&D
projects that are not major T&D projects.
Customer Information:
The Company and staff agree that customer choice would
be enhanced by the availability of environmental
information concerning the power being provided to
them. To effectuate such disclosure, Con Edison and
Staff agree to work with LSEs and others to develop and
implement, where feasible, meaningful and cost-
effective, an approach to providing customers with fuel
mix and emission characteristics of the generation
sources relied on by the load serving entity. Such an
approach would facilitate informed customer choice,
promote resource diversity and improve environmental
quality.
Building Codes:
Con Edison supports the adoption of improved building
codes and standards as an appropriate mechanism for
improving the energy efficiency of buildings and, in
particular, their use of electricity. Con Edison
supports the Summary of the Basic Requirements of the
1995 Model Energy Code and ASHRAE 90.1 (1989). Nothing
herein requires any party to support different
proposals for energy efficiency standards.
<PAGE>
APPENDIX B
Page 2 of 2
Performance-Based Ratemaking:
In its first major electric rate filing following
Commission approval of this agreement, Con Edison will
address the merits of performance-based ratemaking
including the relationship between sales and
distribution revenues and energy efficiency and make
ratemaking proposals as warranted.
The company also agrees to the following language:
The formation of a third-party administrator,
appropriately implemented, would serve the objectives
embodied in the Commission's May 20, 1996 order.
Therefore, subject to the Commission's approval, there
will be a third-party administrator, and the Commission
will choose the administrator of the SBC-funded
programs.
<PAGE>
APPENDIX C
<PAGE>
Service Quality Performance Mechanism
The electric Service Quality Performance Mechanism will
incorporate the following individual customer service measures:
- Overall Customer Satisfaction Index
- Customer Contact Satisfaction Index
- PSC Complaint Rate
(Reliability measures agreed to in the settlement will remain
unchanged.)
Overall Customer Satisfaction Index
An overall customer satisfaction index will be calculated based
on the results of the annual customer expectation survey and
will reflect the percentage of customers satisfied with the
service they receive from NYSEG. The survey will be conducted
by an independent consultant on an annual basis from a
representative sample of NYSEG customers from all regions of
the company's service territory, and will include a
proportionate number of the RegSub customers once retail access
begins. The results of the last three annual surveys showed an
average customer satisfaction level of 72.6%. If the overall
satisfaction index for the Price Cap Period falls below 71% for
any year of the agreement, the company will be subject to a
minimum 2.0 basis-point penalty. If the annual survey results
drop to 68% or below, the company will incur a maximum 8 basis
point penalty. The company will be assessed penalties on this
indicator based on the following sliding scale.
Overall Customer Basis Point
Satisfaction Index Penalty
< = 71.0 2.0
< = 70.0 4.0
< = 69.0 6.0
< = 68.0 8.0
Contact Satisfaction Survey
The contact satisfaction index measures the level of
satisfaction of customers who have had recent contact with the
company. Each month, NYSEG will conduct a customer contact or
follow-up survey comprised of a statistically valid sample of
customers from each of the regions who have recently contacted
the company, including a representative sample of customers who
have requested a change in electric suppliers. A final annual
average of the monthly survey results will be calculated for
each year of the Price Cap Period. Based on a three year
average of past performance, the company has received a
customer satisfaction score of 84.7%. If the annual results
are equal to or below 83.0%, the company will be subject to a
minimum 2.0 basis point penalty. If the annual results are
equal to or below 80.0%, NYSEG will incur a maximum 8 basis
point penalty. Penalties will be imposed on this indicator
according to the following scale.
Contact Satisfaction Basis Point
Index Penalty
< = 83.0 2.0
< = 82.0 4.0
< = 81.0 6.0
< = 80.0 8.0
PSC Complaint Rate
A complaint target measured by PSC complaint rate data for the
12 month period covered by each year of the Price Cap Period.
For the past two years, NYSEG's PSC complaint rates has
averaged 3.1. The company's PSC Complaint rate target will be
4.0 for each year of the Price Cap Period based on 12 months
data. If the PSC Complaint Rate is above 4.0, the company will
be incur a minimum 2.0 basis point penalty. If the company's
PSC complaint rate for each 12 month period of the Price Cap
Plan is above 7.0, the company will be subject to a maximum 8.0
basis point penalty. Penalties will be assessed based on the
following scale.
PSC Complaint Basis Point
Rate Penalty
< = 4.0 2.0
< = 5.0 4.0
< = 6.0 6.0
< = 7.0 8.0
Customer Surveys
The company will consult staff in the event that it proposes to
make modifications to either of the survey instruments or the
manner in which they are conducted.
Reporting Requirements
The three customer service measures will be tracked and
calculated separately on an annual basis. The company will
submit the results of its service quality performance quarterly
to the Consumer Services Division. The final report for each
rate year of the Price Cap Period should include an assurance
of the integrity of the results either by including
verification of all reported survey data by a third party audit
or an attestation by an officer of the company that the results
are accurate and verifiable. The maximum penalty that could be
assessed for each year of the Price Cap Period is 24 basis
points. In the year that a penalty is incurred, the earnings
cap contained in the Settlement Agreement will be reduced by
the number of basis points of the penalty incurred. For
example, if the maximum aggregate penalty is incurred the ROE
cap for that year would be reduced by 0.24%.
<PAGE>
APPENDIX D
<PAGE>
APPENDIX D
Page 1 of 2
SUBJECT: Filing by NEW YORK STATE ELECTRIC & GAS CORPORATION
(Second-stage)
Amendments to Schedule P.S.C. No. 115 - Electricity
Original Leaves Nos. 22-D, 26-B, 39-J and 39-K
Second Revised Leaves Nos. 16-I and 16-J
Third Revised Leaf No. 22-C
Fourth Revised Leaf No. 49
Fifth Revised Leaf No. 65
Sixth Revised Leaves Nos. 29-D and 30-C
Seventh Revised Leaf No. 26-A
Eighth Revised Leaves Nos. 29-B and 41
Tenth Revised Leaves Nos. 24, 30 and 52
Eleventh Revised Leaf No. 54
Thirteenth Revised Leaves Nos. 29-A, 36 and 53
Sixteenth Revised Leaf No. 2
Eighteenth Revised Leaf No. 50
Twenty-Second Revised Leaf No. 46
Twenty-Fourth Revised Leaf No. 42
Twenty-Fifth Revised Leaf No. 44
Twenty-Ninth Revised Leaves Nos. 21, 35 and 40
Thirtieth Revised Leaf No. 22
Thirty-Third Revised Leaf No. 32
Thirty-Sixth Revised Leaf No. 31
Forty-Second Revised Leaf No. 18
Forty-Third Revised Leaves Nos. 20 and 23
Forty-Sixth Revised Leaf NO. 17
Amendments to Schedule P.S.C. No. 118 - Electricity
First Revised Leaf No. 12A
Third Revised Leaf No. 2
Sixth Revised Leaf No. 19
Eighth Revised Leaf No. 15
Tenth Revised Leaf No. 17, 22, and 23
Eleventh Revised Leaf No. 14 and 18
Twelfth Revised Leaf No. 24
Thirteenth Revised Leaf No. 25
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APPENDIX D
Page 2 of 2
Amendments to Schedule P.S.C. No. 115 - Electricity
(Third-stage)
Third Revised Leaves Nos. 16-I and 16-J
Sixth Revised Leaf No. 65
Seventh Revised Leaves Nos. 29-D and 30-C
Ninth Revised Leaves Nos. 29-B and 41
Eleventh Revised Leaf No. 30
Fourteenth Revised Leaf No. 36
Fifteenth Revised Leaf No. 29-A
Seventeenth Revised Leaf No. 2
Twenty-Third Revised Leaf No. 46
Twenty-Fifth Revised Leaf No. 42
Twenty-Sixth Revised Leaf No. 44
Thirtieth Revised Leaves Nos. 35 and 40
Thirty-First Revised Leaf No. 22
Thirty-fourth Revised Leaf No. 32
Thirty-Seventh Revised Leaf No. 31
Forty-Third Revised Leaf No. 18
Forty-Fourth Revised Leaves Nos. 20 and 23
Forty-Seventh Revised Leaf No. 17
Amendments to Schedule P.S.C. No. 118 - Electricity
Eleventh Revised Leaf No. 17, 22, and 23
Twelfth Revised Leaf No. 14 and 18
Fourteenth Revised Leaves Nos. 24 and 25
Supplement Nos. 138, 139, 143, 144, 146, 147, 148 and
150 to Schedule P.S.C. No. 115 - Electricity
Supplement Nos. 15, 16, 17, 18, 19, 20, 21 and 22 to
Schedule P.S.C. No. 118 - Electricity
EXHIBIT F-1
February 5, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We have acted as counsel for NGE Resources, Inc., (the
"Company") currently a wholly-owned subsidiary of New York State
Electric & Gas Corporation ("NYSEG") in connection with the
Company's Application on Form U-1, as amended from time to time
(the "Application"), filed with the Securities and Exchange
Commission (the "Commission") under the Public Utility Holding
Company Act of 1935, as amended (the "Act"). As described in the
Application, all of the outstanding shares of Common Stock of the
Company, which will then be owned by NYSEG, will be canceled and
all of the outstanding shares of NYSEG Common Stock will be
exchanged on a share-for-share basis for the Company's Common
Stock (the "Share Exchange"), subject to any rights of NYSEG
Common Stockholders to exercise appraisal rights. Upon
consummation of the Share Exchange, each person who owned NYSEG
Common Stock immediately prior to the Share Exchange (other than
NYSEG Common Stockholders who properly exercise any appraisal
rights) will own a corresponding number of shares and percentage
of the outstanding shares of the Company's Common Stock, and the
Company will own all of the outstanding shares of NYSEG Common
Stock.
In connection therewith, the Company has filed a
Registration Statement on Form S-4, as the same may be amended
from time to time (the "Registration Statement"), with the
Commission under the Securities Act of 1933, as amended,
registering 76,000,000 shares of the Company's Common Stock, with
a par value of One Cent ($.01) per share, which are issuable upon
the consummation of, and subsequent to, the Share Exchange
contemplated by the Agreement and Plan of Share Exchange (the
"Plan of Exchange") between the Company and NYSEG filed as
Exhibit A to the Proxy Statement and Prospectus which forms a
part of the Registration Statement. All capitalized terms not
otherwise defined herein have the same meanings as defined in the
Registration Statement.
As counsel to the Company, we are generally familiar with
its corporate proceedings and have examined the Application, the
Registration Statement and the Plan of Exchange and such other
documents as we have deemed relevant and necessary as a basis for
the opinion hereinafter set forth. In addition, we have made
such other and further investigations as we have deemed relevant
and necessary as a basis for the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us
as certified or photostatic copies, and the authenticity of the
originals of such latter documents.
Based on the foregoing and upon such further examination of
corporate records and documents and matters of law as we have
considered necessary or desirable for the purposes of this
opinion, it is our opinion that:
(a) the Company is validly organized and duly existing under
the laws of the State of New York;
(b) when all necessary regulatory approvals shall have been
obtained, when the Company's Common Stock shall have been
issued and exchanged in accordance with the terms of the
Plan of Exchange as proposed in the Application and the
Registration Statement, and when the Certificate of Exchange
shall have been filed by the Department of State of the
State of New York or become effective as may be specified in
the Certificate of Exchange, (i) all laws of the State of
New York applicable to the transactions contemplated in the
Application will have been complied with; (ii) the Company's
Common Stock will be legally issued, fully paid and non-
assessable, and the holders thereof will be entitled to the
rights appertaining thereto set forth in the Company's
Certificate of Incorporation, as amended from time to time;
(iii) the Company will legally acquire NYSEG's Common Stock;
and (iv) the consummation of the transactions proposed in
the Application will not violate the legal rights of the
holders of any securities issued by the Company, NYSEG or
any associate company thereof.
The opinion expressed herein is limited to the laws of
the State of New York and to applicable United States
federal law and we express no opinion as to the laws of any
other jurisdiction.
We hereby consent to the filing of this opinion as
Exhibit F-1 to the Application.
Very truly yours,
Huber Lawrence & Abell
EXHIBIT I-1
Fees, Commissions and Expenses
Commission filing fee for the Registration
Statement on Form S-4 . . . . . . . . . . . . . . $ 620,000
Outside Consultants . . . . . . . . . . . . . . . $ 139,000
Legal Fees. . . . . . . . . . . . . . . . . . . . $ 592,000
Printing, Soliciting, Mailing and broker
reimbursements. . . . . . . . . . . . . . . . . . $ 680,000
Stock Certificates. . . . . . . . . . . . . . . . $ 100,000
Miscellaneous . . . . . . . . . . . . . . . . . . $ 215,000
Total . . . . . . . . . . . . . . . . . . . . . $2,346,000
