FILE NO. _________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
APPLICATION/DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
WITH RESPECT TO THE PROPOSED ORGANIZATION AND CONDUCT
OF BUSINESS OF A NEW SERVICE COMPANY
NU Enterprises, Inc. HEC, Inc.
Northeast Generation Company Select Energy Contracting, Inc.
Northeast Generation Services Company 24 Prime Parkway
Select Energy, Inc. Natick, MA 01760
Select Energy Portland Pipeline, Inc.
Mode 1 Communications, Inc.
New Service Company
107 Selden Street
Berlin, CT 06037
Reeds Ferry Supply Co., Inc. HEC Energy Consulting Canada Inc.
605 Front Street 242 Simcoe Street
Manchester, NH 03102 Niagara on the Lake
Ontario, Canada LOS1J0
(Names of companies filing this statement and addresses of principal
executive offices)
NORTHEAST UTILITIES
(Name of top registered holding company)
Cheryl W. Grise`
Senior Vice President, Secretary and General Counsel
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
(Name and address of agent for service)
The Commission is requested to mail signed copies of all orders, notices
and communications to:
Jeffrey C. Miller, Esq. Paul N. Belval, Esq.
Assistant General Counsel Day, Berry & Howard LLP
Northeast Utilities Service Company CityPlace I
107 Selden Street Hartford, CT 06103-3499
Berlin, CT 06037
<PAGE>
ITEM 1
DESCRIPTION OF PROPOSED TRANSACTION
INTRODUCTION
1. NU Enterprises, Inc. ("NUEI"), a holding company under the Public
Utility Holding Company Act of 1935, as amended ("the Act"), and a sub-
holding company over certain non-utility subsidiaries of Northeast
Utilities ("NU"), a public utility holding company registered under the
Act, Northeast Generation Company ("NGC"), Northeast Generation Services
Company ("NGS"), Select Energy, Inc. ("SE"), HEC Inc. ("HEC"), Select
Energy Portland Pipeline, Inc. ("SEPPI"), and Mode 1 Communications, Inc.
("Mode 1"), each a direct subsidiary of NUEI and an indirect non-utility
subsidiary of NU, and Reeds Ferry Supply Co., Inc. ("Reeds"), Select Energy
Contracting, Inc. ("SECI") and HEC Energy Consulting Canada Inc. ("HEC
Energy" and together with NUEI, NGC, NGS, SE, HEC, SEPPI, Mode 1, Reeds and
SECI, the "Competitive Subsidiaries"), each a direct subsidiary of HEC and
an indirect non-utility subsidiary of NU, and a to-be-named and to-be-
formed service company subsidiary of NUEI that, for purposes of this
Application (as defined herein), will be referred to as "New Service
Company" ("NSC" and together with the Competitive Subsidiaries, the
"Applicants") hereby submit this application/declaration (the
"Application") pursuant to Sections 6(a), 7, 9(a), 10 and 13 of the Act and
Rules 86, 87, 88, 89, 90, 91, 93, 94, 95 and 100 thereunder, with respect
to certain transactions related to the formation, capitalization and
conduct of business of NSC and the rendition of services by the Competitive
Subsidiaries to each other and to NSC.{1} NSC is being organized to
provide certain services to the Competitive Subsidiaries in connection with
changes required to be made to the way in which NU's regulated and
unregulated subsidiaries conduct their business as a result of electric
utility deregulation in New England.
BACKGROUND
2. On April 29, 1998, the Connecticut Governor signed into law a
comprehensive restructuring bill entitled An Act Concerning Electric
Restructuring (the "Connecticut Act"). 1998 Conn. Acts. 98-28 (Reg.
Sess.). The Connecticut Act provides for the deregulation of the electric
utility industry to provide retail customers with a choice of electricity
providers. The Connecticut Act requires each electric company to unbundle
its generation components from the rest of the company.{2} The generation
of electricity will be subject to competition from other suppliers,
including SE. The transmission and distribution of electricity will
continue to be provided by electric utilities at regulated rates.
3. In connection with the Connecticut Act, the Connecticut Department of
Public Utility Control (the "Department") adopted new regulations (the
"Code of Conduct") to govern, among other things, the interactions of
electric distribution companies ("EDCs") with their competitive generation
entities or affiliates. Conn. Agencies Regs. Statutes 16-244h-1
to 16-244h-7. To ensure that electric utilities do not provide their
generation entities or affiliates with competitive advantages over
unaffiliated electric suppliers, the Code of Conduct prohibits EDCs from
sharing office space, office equipment, services, systems, employees,
directors or officers with their competitive generation entities or
affiliates, subject to certain exceptions. In addition, EDCs, holding
companies and separate affiliates of electric utilities created solely to
perform corporate support services for EDCs are prohibited from providing
to such EDCs' generation entities or affiliates services that would provide
a means for transferring confidential information to those generation
entities or affiliates that would create an opportunity for preferential
treatment or unfair competitive advantage, lead to customer confusion or
create opportunities for cross-subsidization of the generation entities or
affiliates. Examples of services that may be provided to both regulated
utilities and their generation entities or affiliates include, but are not
limited to, payroll, taxes, shareholder services, insurance, financial
reporting, corporate financial planning and analysis, corporate accounting,
corporate security, human resources, employee records, regulatory affairs,
lobbying, legal and pension management. Examples of services that may not
be shared include employee recruiting, engineering, hedging and financial
derivatives and arbitrage services, electric purchasing for resale,
purchasing of electric transmission, system operations and marketing.
Conn. Agencies Regs. Statute 16-244h-5.
4. In accordance with the Connecticut Act, SE filed an application with
the Department for a license to operate as an electric supplier providing
energy to consumers within Connecticut. On December 16, 1999, the
Department issued its decision on that application (the "Department
Decision") which stated, among other things, that SE had not demonstrated
to the satisfaction of the Department its compliance with the Code of
Conduct. Docket No. 99-08-03, APPLICATION OF SELECT ENERGY, INC. FOR AN
ELECTRIC SUPPLIER LICENSE (Decision) (December 16, 1999). The Department
Decision was based in part on the fact that SE was being provided services
by employees of Northeast Utilities Service Company ("NUSCO"), a wholly-
owned subsidiary of NU that also provides services to the regulated
electric utility subsidiaries of NU. The Department noted that the Code of
Conduct prohibits SE and its regulated affiliate, The Connecticut Light and
Power Company ("CL&P"), from employing the same employees, and that the
Department requires strict compliance with the Code of Conduct. Although
those NUSCO employees that were providing services exclusively to SE had
been assigned to work for SE, the Department stated that it would be more
appropriate for employees dedicated to SE to work directly for SE rather
than for NUSCO in order to avoid the potential for subsidization of SE by
CL&P ratepayers.{3}
5. Because the remaining NUSCO employees that work for SE (not including
those employees previously transferred to SE) also presently or may in the
future provide similar services to other Competitive Subsidiaries, it has
been determined that, in the longer term, those employees should not be
employed directly by SE. Thus, while the employees that were providing
services exclusively to SE will be transferred to SE in early March on an
interim basis, as a longer-term measure, NSC will be formed to assume the
responsibility for furnishing the Competitive Subsidiaries those services
that, pursuant to the Code of Conduct, may not be provided by service
company affiliates of CL&P that provide services to CL&P. The services
that NSC will be able to provide to the Competitive Subsidiaries include,
without limitation, employee recruiting, engineering, hedging and financial
derivatives and arbitrage services, electric purchasing for resale,
purchasing of electric transmission, system operations and marketing.
6. In the interest of simplicity and efficiency, NUSCO will continue to
provide the Competitive Subsidiaries and NSC with services that, pursuant
to the Code of Conduct, may be provided by service companies serving EDCs
pursuant to the existing service contract between NUSCO and each of those
Competitive Subsidiaries and pursuant to a contract to be entered into with
NSC, a copy of which will be filed by amendment as Exhibit B.2. Examples
of such services include, but are not limited to, payroll, taxes,
shareholder services, insurance, financial reporting, corporate financial
planning and analysis, corporate accounting, corporate security, human
resources, employee records, regulatory affairs, lobbying, legal, and
pension management.
7. While NSC and NUSCO will, to a certain extent, be providing comparable
services to different NU subsidiaries, NSC will be formed to provide those
services to the Competitive Subsidiaries in order to ensure full compliance
with the Code of Conduct. Moreover, the Commission has found in similar
(albeit considerably more complex) circumstances that the simplicity
requirements of Section 11(b)(2) of the Act are aimed at preventing the
"leverage and pyramiding device" that gave rise to the Act and that those
requirements do not prohibit the organization of additional service
companies in the same holding company system to the extent it "offers
various benefits," including "afford[ing] separation between the utility
and non-utility businesses [within the holding company system]," especially
where it is legally required. ENTERGY CORP., H.C.A. Rel. No. 27039 (June
22, 1999). SEE ALSO, ENTERGY CORP., H.C.A. Rel. No. 26322 (June 30, 1995).
Here, as in the ENTERGY matter, the formation of NSC will allow the
Applicants and the other companies in the NU system to separate their
regulated utility and the competitive non-utility businesses and afford
stronger compliance with the Code of Conduct and any similar requirements
that may arise in other jurisdictions in which the NU companies do
business.
8. In addition to receiving services performed by NSC, each of the
Competitive Subsidiaries may provide certain services to associate
Competitive Subsidiaries and NSC. The Competitive Subsidiaries may also
perform services, at cost, for NU's regulated subsidiaries. Because none
of the Competitive Subsidiaries (other than NUEI) is an electric or gas
utility company, a holding company, a fiscal or financing agency of a
holding company, or an investment company or investment trust, the
provision of services by those Competitive Subsidiaries is consistent with
Rule 87(b)(1) under the Act.
DESCRIPTION OF NSC
9. NSC will be a Connecticut corporation, wholly owned and controlled by
NUEI. Its principal executive offices will be located at 107 Selden
Street, Berlin, Connecticut.
10. NSC's sole business will be providing those services described in
paragraph 5 above to the Competitive Subsidiaries and any other subsidiaries
or affiliates of NU which may require similar arrangements.{4} In connection
therewith, NSC will enter into a service agreement with each of the Competitive
Subsidiaries. Each such service agreement will be identical except for the
identity of the Competitive Subsidiary receiving services thereunder. A form
of NSC service agreement will be filed by amendment as Exhibit B.1. Statements
of the gross operating revenues of each of the Competitive Subsidiaries for the
last available 12-month period will be filed by amendment as Exhibits I.1 to
I.10. (Because NSC will be a newly formed company with no history of gross
operating revenues, no statement of gross operating revenues is being filed
for it.)
11. It is presently expected that NSC's only authorized class of stock
will be one class of common stock, $1 par value, of which 1,000 shares will
be authorized and issued to, and acquired by, NUEI as NSC's sole common
stockholder. NUEI will pay $10 per share, or $10,000 in the aggregate, for
those shares. Other than NUEI, NU will be the only entity with a direct or
indirect ownership interest of 10% or more of the capital stock of NSC.
12. The Applicants do not presently anticipate the need for NSC to raise
any capital besides that supplied by NUEI's purchase of NSC's common
shares. If the need for additional capital does arise, the method for
raising that capital will be the subject of one or more subsequent
applications to the Commission.
13. NSC has not yet been formed, and accordingly currently has no
property. A schedule of the property NSC will own or lease to be used in
its business of performing services will be filed by amendment as Exhibit
M.
14. A list of the prospective directors of NSC, their connections with
associate companies of NSC and any compensation that they will receive
directly from NSC will be filed by amendment as Exhibit K.2. A list of the
prospective officers of NSC, their connections with associate companies of
NSC, their proposed annual compensation from NSC for 2000, and the
approximate percentages of their total working time that initially will be
devoted to NSC on an annual basis will be filed by amendment as Exhibit
K.3. Pursuant to the requirements of the Code of Conduct, the directors
and officers of NSC will not be employed by CL&P, although certain
directors and officers of NSC may serve as officers or directors of NU and
subsidiaries thereof other than CL&P. Each of the directors and officers
of NSC will bill his/her time directly to each Competitive Subsidiary on
the basis of actual time spent on the activities of each such subsidiary,
as reflected in timesheets completed by him or her.
NSC's employees are initially expected to include those NUSCO
employees who provide services to both SE and the other Competitive
Subsidiaries. Pursuant to the requirements of the Code of Conduct, NSC's
employees will work exclusively for NSC and the Competitive Subsidiaries.
NSC will not employ any employees assigned to perform services for CL&P.
The salaries of NSC employees will be included in NSC's annual operating
budget. A proposed operating budget for NSC's first fiscal year will be
filed by amendment as Exhibit J. The proposed organization of NSC will be
filed by amendment as Exhibit K.1.
15. NSC and the Competitive Subsidiaries propose to provide services to
each other at any price they deem appropriate, including but not limited to
cost or fair market prices, and request an exemption pursuant to Section
13(b) and Rule 100(a) from the "at cost requirement" of Rules 90 and 91 to
the extent that a price other than "cost" is charged.{5} NSC and the
Competitive Subsidiaries propose to retain the option to provide services
to each other at cost, consistent with Rules 90 and 91, if reasonable
business considerations call for such an at-cost charge. NSC will not
perform any services for any of NU's regulated public utility subsidiaries
or enter into any other transactions in which those public utility
subsidiaries would be required to make payments directly to NSC. Any
services provided by the Competitive Subsidiaries to NU's regulated public
utility subsidiaries will be provided at "cost" consistent with Rules 90
and 91. The Applicants state that they will not provide services to any
associate company that, in turn, provides such services or sells such goods,
directly or indirectly, to any other associate company that is not a
Competitive Subsidiary, except pursuant to the requirements of the
Commission's rules and regulations under Section 13(b) or an exemption
therefrom obtained in a separate filing.
The final sentence of Section 13(b) permits the Commission to exempt
certain categories of transactions otherwise falling within the scope of
Section 13(b) from the at-cost requirement if the transactions "involve
special or unusual circumstances." In the past, the Commission has
recognized that the at-cost provisions of the Act and the rules thereunder
were "designed to protect public utility companies against the tribute
heretofore exacted from them in the performance of service . . . contracts
by their holding companies and by servicing . . . companies controlled by
their holding companies" and has granted exemptions from the at cost
requirement "where structural protections to protect customers against any
adverse effect of pricing at market rates were in place." ENTERGY CORP.,
H.C.A. Rel. No. 27039 (June 22, 1999), and decisions cited therein. SEE
ALSO INTERSTATE ENERGY CORP., H.C.A. Rel. No. 27069 (August 26, 1999), and
decisions cited therein; NEW ENGLAND ELECTRIC SYSTEM, H.C.A. Rel. No. 22309
(December 9, 1981).
The requested exemption from the "at-cost" requirements of the Act in
the circumstances described above is entirely consistent with Section 13(b)
and the rules thereunder. First, as the electric industry restructures, it
is important that the subsidiaries of public utility holding companies that
are involved in competitive, unregulated businesses be free to conduct
those businesses according to the same ground rules as are used in other
competitive industries, including providing services to each other at
prices other than "cost". Also, because the Competitive Subsidiaries will
be free to obtain services from unaffiliated companies, there will be
structural safeguards in place to permit the Applicants to deal with each
other on an appropriate, arms-length basis with respect to services
provided at a price other than cost.
16. NSC and the Competitive Subsidiaries will adhere to Section 13 of the
Act and the Commission's rules promulgated thereunder with respect to the
allocation of their costs to their customer companies. Any allocation
method that is used will be consistent with the Commission's rules with
respect to allocations of costs to affiliated companies. Any amount billed
for services performed by an affiliate under a service agreement with a
Competitive Subsidiary will be billed directly to that Competitive
Subsidiary. NSC and the Competitive Subsidiaries will keep complete and
accurate accounts of all receipts and expenditures in accordance with the
Commission's rules and the Uniform System of Accounts prescribed by the
Federal Energy Regulatory Commission. The Applicants commit that they will
therefore comply with Rule 93 by following the Commission's System of
Accounts set forth in 17 C.F.R. Part 256 and the Federal Energy Regulatory
Commission's Uniform System of Accounts after which the Commission's System
of Account was modeled.
STATEMENT PURSUANT TO RULE 54
17. Except in accordance with the Act, neither any of the Applicants nor
NU (a) have acquired an ownership interest in an exempt wholesale generator
("EWG") or a foreign utility company ("FUCO") as defined in Sections 32 and
33 of the Act, or (b) now is or as a consequence of the transactions
proposed herein will become a party to, or has or as a consequence of the
transactions proposed herein will have a right under, a service, sales or
construction contract with an EWG or a FUCO. None of the proceeds from the
transactions proposed herein will be used by the Applicants to acquire any
securities of, or any interest in, an EWG or a FUCO.{6}
The Applicants and NU are in compliance with Rule 53(a), (b) and (c),
as demonstrated by the following determinations:
(i) NU's aggregate investment in EWGs and FUCOs (i.e., amounts
invested in or committed to be invested in EWGs and FUCOs
for which there is no recourse to NU) does not exceed 50% of
NU and its subsidiaries' consolidated retained earnings as
reported for the four most recent quarterly periods on NU's
Form 10-K and 10-Qs. At December 31, 1999 the ratio of such
investment ($54 million) to such consolidated retained
earnings ($630 million) was 8.6 percent.
(ii) Ave Fenix (NU's only EWG or FUCO at this time) maintains
books and records, and prepares financial statements in
accordance with Rule 53(a)(2). Furthermore, NU has
undertaken to provide the Commission with access to such
books and records and financial statements, as it may
request.
(iii) No employees of either the Applicants or NU have rendered
services to the EWG/FUCO.
(iv) NU has submitted (a) a copy of each Form U-1 and Rule 24
certificate that has been filed with the Commission under
Rule 53 and (b) a copy of Item 9 of Form U5S and Exhibits G
and H thereof to each state regulator having jurisdiction
over all the rates of NU's public utility subsidiaries.
(v) None of the Applicants has been the subject of a bankruptcy
or similar proceeding unless a plan of reorganization has
been confirmed in such proceeding. In addition, NU's average
consolidated retained earnings ("CREs") for the four most
recent quarterly periods have not decreased by 10 percent or
more from the average for the previous four quarterly periods
(at December 31,1998, NU's CREs were $692 million; at
December 31, 1999, NU's CREs were $630 million). NU's
aggregate investment in EWGs/FUCOs at such date
($54 million) did not exceed two percent of NU's consolidated
capital invested in utility operations ($5,446 million x 2%
= $109 million).
(vi) In the previous fiscal year, NU did not report operating
losses attributable to its investment in EWGs/FUCOs, unless
such losses did not exceed 5 percent of NU's consolidated
retained earnings.
ITEM 2
FEES, COMMISSIONS AND EXPENSES
16. The fees, commissions and expenses paid or incurred, or to be paid or
incurred, directly or indirectly, in connection with the proposed
transactions by the Applicants are not expected to exceed $10,000 and are
expected to be comprised primarily of fees for ordinary legal and
accounting services. None of such fees, commissions or expenses will be
paid to any associate company or affiliate of the Applicants except for
payments to NUSCO for financial, legal and other services.
ITEM 3
APPLICABLE STATUTORY PROVISIONS
18. Sections 6(a), 7, 9(a), 10 and 13 of the Act and Rules 86, 87, 88, 89,
90, 91, 93, 94, 95 and 100 thereunder are or may be applicable to the
proposed transactions. To the extent any other sections of the Act or
Rules thereunder may be applicable to the proposed transactions, the
Applicants request appropriate orders thereunder.
ITEM 4
REGULATORY APPROVAL
19. No regulatory approval, other than those of the Commission requested
herein, is required for the proposed transactions for which Commission
authorization is sought herein.
ITEM 5
PROCEDURE
20. The Applicants hereby request that the Commission publish a notice
under Rule 23 with respect to the filing of this Application as soon as
practicable and that the Commission's order be issued as soon as possible.
A form of notice suitable for publication in the Federal Register is
attached hereto as Exhibit H. The Applicants respectfully request the
Commission's approval, pursuant to this Application, of all transactions
described herein, whether under the sections of the Act and Rules
thereunder enumerated in Item 3 or otherwise. It is further requested that
the Commission issue an order authorizing the transactions proposed herein
at the earliest practicable date but in any event not later than May 1,
2000. Additionally, the Applicants (i) request that there not be any
recommended decision by a hearing officer or by any responsible officer of
the Commission, (ii) consent to the Office of Public Utility Regulation
within the Division of Investment Management assisting in the preparation
of the Commission's decision, and (iii) waive the 30-day waiting period
between the issuance of the Commission's order and the date on which it is
to become effective, since it is desired that the Commission's order, when
issued, become effective immediately.
ITEM 6
EXHIBITS AND FINANCIAL STATEMENTS
21. Asterisked (*) items are to be filed by subsequent amendment.
(a) EXHIBITS
*A.1 Certificate of Incorporation of NSC
*A.2 Bylaws of NSC
*B.1 Form of NSC Service Agreement (because the Service Agreement
between NSC and each of the Competitive Subsidiaries will be
identical except for the identity of the Competitive
Subsidiary party thereto, individual service agreements for
each of the Competitive Subsidiaries are not being filed
herewith.)
*B.2 Service Agreement between NUSCO and NSC
*F. Opinion of Counsel
*G. Financial Data Schedules
H. Proposed Form of Notice
*I.1 Statement of Gross Operating Revenues for NUEI
*I.2 Statement of Gross Operating Revenues for NGC
*I.3 Statement of Gross Operating Revenues for NGS
*I.4 Statement of Gross Operating Revenues for SE
*I.5 Statement of Gross Operating Revenues for HEC
*I.6 Statement of Gross Operating Revenues for SEPPI
*I.7 Statement of Gross Operating Revenues for Mode 1
*I.8 Statement of Gross Operating Revenues for Reeds
*I.9 Statement of Gross Operating Revenues for SECI
*I.10 Statement of Gross Operating Revenues for HEC Energy
*J. Proposed NSC Operating Budget for First Fiscal Year
*K.1 Organizational Structure of NSC
*K.2 List of the Prospective Directors of NSC
*K.3 List of the Prospective Officers of NSC
L. Decision of Department in Docket No. 99-08-03
*M. Schedule of NSC Property
(b) *Financial Statements{7}
1. NU Enterprises, Inc.
1.1 Balance Sheet, per books and pro forma, as of December
31, 1999.
1.2 Statement of Income, per books and pro forma, for 12
months ended December 31, 2000 and capital structure,
per books and pro forma, as of December 31, 1999.
2. New Service Company
2.1 Balance Sheet, per books and pro forma, as of December
31, 2000.
ITEM 7
INFORMATION AS TO ENVIRONMENTAL EFFECTS
(a) The financial transactions described herein do not involve a major
Federal action significantly affecting the quality of the human
environment.
(b) No other federal agency has prepared or is preparing an environmental
impact statement with regard to the proposed transaction.
**FOOTNOTES**
{1} Rule 88(b) under the Act provides, in pertinent part: "A finding
by the Commission that a subsidiary company of a registered holding company
. . . is so organized and conducted or to be conducted, as to meet the
requirements of section 13(b) of [the Act] . . . will be made only
pursuant to a declaration filed with the Commission on Form U-13-1, as
specified in the instructions for that form, by such company or the persons
proposing to organize it." Because the Applicants are seeking approval for
additional transactions governed by sections of the Act other than Section
13, in order to consolidate the requests for approval related to the
matters described herein, the Applicants are filing this Application on
Form U-1. This Application nonetheless contains all of the information
that would be required in a declaration pursuant to Form U-13-1.
{2} In recognition of the imminent deregulation of the electric
industry, in January 1999, NU Added three new corporations to its system:
(i) NUEI, a holding company for the unregulated businesses of NU'S system;
(ii) NGC, a subsidiary of NUEI created to acquire and manage generating
facilities; and (iii) NGS, another subsidiary of NUEI created to provide
services to the electric generation market as well as to large commercial
and industrial customers in the northeast. NU also transferred to NUEI the
stock of SE and HEC, companies that engage, either directly or indirectly
through subsidiaries, in a variety of energy-related activities. In
addition, SEPPI, a subsidiary of NUEI, was formed as a single purpose
subsidiary to hold the NU system's 5% partnership interest in the Portland
Natural Gas Transmission System Partnership, the partnership that owns and
operates the Portland Natural Gas Transmission Pipeline.
{3} It should be noted that similar issues could arise under the
Massachusetts code of conduct, which prohibits regulated distribution
companies and their unregulated generation affiliates from sharing
facilities, employees, information systems, communication systems or other
administrative or operations systems or resources, but permits the sharing
of general and administrative services to a competitive affiliate,
including various executive, financial, and management services such as
auditing, general accounting, rate design, treasury services, payroll
services, health and pension benefits and other personnel administration.
SEE Mass. Regs. Code tit. 220 Statute 12.03; Investigation by the
Department of Public Utilities Upon Its Own Motion Commencing a Rulemaking
Establishing Standards of Conduct, D.P.U. Docket No. 96-44 (April 23,
1996). The Applicants believe that they and their affiliates, particularly
Western Massachusetts Electric Company, are in compliance with the
Massachusetts code of conduct, although the transactions contemplated by
this Application would add a degree of clarity to the situation.
{4} As stated above, Massachusetts has also adopted a code of conduct.
In addition, New Hampshire is currently considering restructuring and does
not yet have a code of conduct in place. To the extent that either state,
or any other state in which a regulated affiliate of the Competitive
Subsidiaries is subject to a code of conduct, enacts any provision which
would further limit the services that NUSCO could perform for the
Competitive Subsidiaries or their affiliates, the scope of the services
that NSC provides would be modified accordingly.
{5} Authority for NGS to provide certain services to NGC at other
than at cost has been requested, to the extent necessary, in the
application/declaration in File No. 70-9543.
{6} Please see the application/declaration filed with the Commission
by NU, NGS and SE on August 26, 1999 concerning the anticipated investments
in EWGs by NU.
{7} The Competitive Subsidiaries currently receive the services to be
provided by NSC and the other Competitive Subsidiaries from NUSCO at cost,
and it is anticipated that the transactions contemplated by this
Application will have little or no effect on their financial statements
(other than those of NUEI with respect to the acquisition of the NSC
stock). Moreover, because those transactions are occurring exclusively
beneath NU in the NU system corporate structure, they will also have little
or no impact on the financial statements of NU or the NU system.
Accordingly, financial statements are only being filed for NUEI and NSC.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this
statement to be signed on their behalf by the undersigned thereunto duly
authorized.
NEW SERVICE COMPANY
NU ENTERPRISES, INC.
NORTHEAST GENERATION COMPANY
NORTHEAST GENERATION SERVICES COMPANY
SELECT ENERGY, INC.
SELECT ENERGY PORTLAND PIPELINE, INC.
MODE 1 COMMUNICATIONS, INC.
By:
-----------------------------------
/s/ David R. McHale
Vice President and Treasurer
HEC INC.
REEDS FERRY SUPPLY CO, INC.
SELECT ENERGY CONTRACTING, INC.
HEC ENERGY CONSULTING CANADA INC.
By:
-----------------------------------
/s/ David R. McHale
Assistant Treasurer
Date: February 28, 2000
EXHIBIT H
PROPOSED FORM OF NOTICE
(Release No. 35-______; 70-____)
FORM U-1
APPLICATION/DECLARATION UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
WITH RESPECT TO THE PROPOSED ORGANIZATION AND CONDUCT
OF BUSINESS OF A NEW SERVICE COMPANY
_________________, 2000
NU Enterprises, Inc. ("NUEI"), a holding company under the Public
Utility Holding Company Act of 1935, as amended ("the Act"), and a sub-
holding company over certain non-utility subsidiaries of Northeast
Utilities ("NU"), a public utility holding company registered under the
Act, Northeast Generation Company ("NGC"), Northeast Generation Services
Company ("NGS"), Select Energy, Inc. ("SE"), HEC Inc. ("HEC"), Select
Energy Portland Pipeline, Inc. ("SEPPI"), and Mode 1 Communications, Inc.
("Mode 1"), each a direct subsidiary of NUEI and an indirect non-utility
subsidiary of NU, and Reeds Ferry Supply Co., Inc. ("Reeds"), Select Energy
Contracting, Inc. ("SECI") and HEC Energy Consulting Canada Inc. ("HEC
Energy" and together with NUEI, NGC, NGS, SE, HEC, SEPPI, Mode 1, Reeds and
SECI, the "Competitive Subsidiaries"), each a direct subsidiary of HEC and
an indirect non-utility subsidiary of NU, and a to-be-named and to-be-
formed service company subsidiary of NUEI that, for purposes of the
Application (as defined herein), is referred to as "New Service Company"
("NSC" and together with the Competitive Subsidiaries, the "Applicants")
have submitted an application/declaration (the "Application") pursuant to
Sections 6(a), 7, 9(a), 10 and 13 of the Act and Rules 86, 87, 88, 89, 90,
91, 93, 94, 95 and 100 thereunder. NUEI, NGC, NGS, SE, SEPPI and Mode 1
are (and NSC will be) located at 107 Selden Street, Berlin, Connecticut
06037, HEC and SECI are located at 24 Prime Parkway, Natick, Massachusetts
01760, Reeds is located at 605 Front Street, Manchester, New Hampshire
03102, and HEC Energy is located at 242 Simcoe Street, Niagara on the Lake,
Ontario, Canada LOS1J0.
The Applicants seek Commission authorization for certain transactions
related to the formation, capitalization and conduct of business of NSC and
the rendition of services by the Competitive Subsidiaries to each other and
to NSC. The Applicants state that the authorizations sought relate to
changes required to be made to the way in which NU's regulated and
unregulated subsidiaries conduct their business as a result of electric
utility deregulation in New England.
The Applicants state that in connection with electric utility
deregulation in Connecticut, the Connecticut Department of Public Utility
Control has adopted a Code of Conduct (the "Connecticut Code of Conduct"),
which, among other things, prohibits electric distribution companies
("EDCs") from sharing office space, office equipment, services, systems,
employees, directors or officers with their competitive generation entities
or affiliates, subject to certain exceptions. In addition, EDCs, holding
companies and separate affiliates of electric utilities created solely to
perform corporate support services for EDCs are prohibited from providing
to such EDCs' generation entities or affiliates services that would provide
a means for transferring confidential information to those generation
entities or affiliates that would create an opportunity for preferential
treatment or unfair competitive advantage, lead to customer confusion or
create opportunities for cross-subsidization of the generation entities or
affiliates. To ensure full compliance with the Connecticut Code of
Conduct, NSC will be formed to assume the responsibility for furnishing the
Competitive Subsidiaries with those services that, pursuant to the
Connecticut Code of Conduct, may not be provided by service company
affiliates of NU's Connecticut electric utility subsidiary, The Connecticut
Light and Power Company ("CL&P"), that provide services to CL&P. The
services that NSC will be able to provide to the Competitive Subsidiaries
include, without limitation, employee recruiting, engineering, hedging and
financial derivatives and arbitrage services, electric purchasing for
resale, purchasing of electric transmission, system operations and
marketing.
The Applicants state that Northeast Utilities Service Company
("NUSCO"), a wholly-owned subsidiary of NU that also provides services to
the regulated electric utility subsidiaries of NU (including CL&P), will
provide the Competitive Subsidiaries and NSC with services that, pursuant
to the Connecticut Code of Conduct, may be provided by service companies
serving EDCs. Examples of such services include, but are not limited to,
payroll, taxes, shareholder services, insurance, financial reporting,
corporate financial planning and analysis, corporate accounting, corporate
security, human resources, employee records, regulatory affairs, lobbying,
legal, and pension management. The Applicants further state that in
addition to receiving services provided by NSC and NUSCO, each of the
Competitive Subsidiaries may provide certain services to associate
Competitive Subsidiaries and to NSC. The Competitive Subsidiaries may also
perform services, at cost, for NU's regulated subsidiaries.
The Applicants state that NSC will be a Connecticut corporation,
wholly owned and controlled by NUEI, and that NSC's sole business will be
to provide those services described in the Application to the Competitive
Subsidiaries and any other subsidiaries or affiliates of NU which may
require similar arrangements. In connection therewith, the Applicants
state that NSC will enter into service agreements with each of the
Competitive Subsidiaries. The Applicants anticipate that NSC's only
authorized class of stock will be one class of common stock, $1 par value,
of which 1,000 shares will be authorized and issued to, and acquired by,
NUEI for $10 per share, or $10,000 in the aggregate. The Applicants do not
presently expect that NSC will need to raise any additional capital.
In addition, the Applicants have requested the Commission to grant an
exemption pursuant to Section 13(b) of the Act and Rule 100(a) thereunder
from the "at cost requirement" of Rules 90 and 91 under the Act. NSC and
the Competitive Subsidiaries propose to provide services to each other at
any price they deem appropriate, including but not limited to cost or fair
market prices. The Applicants state in the Application that they
will not provide services to any associate company that, in turn, provides
such services or sells such goods, directly or indirectly, to any other
associate company that is not a Competitive Subsidiary, except pursuant to
the requirements of the Commission's rules and regulations under Section
13(b) of the Act or an exemption therefrom obtained in a separate filing.
The Applicants state that they intend to request the Commission's
approval of all transactions described in the Application, whether under
the sections of the Act and the rules thereunder enumerated therein or
otherwise.
The Application is available for public inspection through the
Commission's Office of Public Reference. Any interested persons wishing to
comment or request a hearing on the Application should submit their views
in writing by _________, 2000, to the Secretary, Securities and Exchange
Commission, Washington, D.C. 20549, and serve a copy on the Applicants at
the addresses specified above. Proof of service (by affidavit or, in the
case of an attorney at law, by certificate) should be filed with the
request. Any request for hearing shall identify specifically the issues of
fact or law that are disputed. A person who so requests will be notified
of any hearing, if ordered, and will receive a copy of any notice or order
issued in this matter. After said date, the Application as filed or as it
may be amended, may be permitted to become effective.
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
_____________________________
Secretary
EXHIBIT L
STATE OF CONNECTICUT
DEPARTMENT OF PUBLIC UTILITY CONTROL
TEN FRANKLIN SQUARE
NEW BRITAIN, CT 06051
DOCKET NO. 99-08-03 APPLICATION OF SELECT ENERGY, INC. FOR AN
ELECTRIC SUPPLIER LICENSE
December 16, 1999
By the following Commissioners:
Glenn Arthur
John W. Betkoski, III
Jack R. Goldberg
DECISION
<PAGE>
TABLE OF CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 1
A. SUMMARY . . . . . . . . . . . . . . . . . . . . . . . 1
B. BACKGROUND OF THE PROCEEDING . . . . . . . . . . . . . 1
C. CONDUCT OF THE PROCEEDING . . . . . . . . . . . . . . 1
D. PARTIES AND INTERVENORS . . . . . . . . . . . . . . . 1
II. DEPARTMENT ANALYSIS . . . . . . . . . . . . . . . . . . 2
A. COMPANY STRUCTURE . . . . . . . . . . . . . . . . . . 2
B. TECHNICAL CAPABILITY . . . . . . . . . . . . . . . . 4
C. RENEWABLE PORTFOLIO REQUIREMENTS . . . . . . . . . . . 5
D. FINANCIAL CAPABILITY . . . . . . . . . . . . . . . . 7
E. MANAGERIAL CAPABILITY . . . . . . . . . . . . . . . . 8
F. CUSTOMER SERVICE . . . . . . . . . . . . . . . . . . . 9
1. Customer Service Plan . . . . . . . . . . . . . . . . . 9
2. Standard Service Contract . . . . . . . . . . . . . . .12
3. Acquisition of Customer Information . . . . . . . . . .12
III. FINDINGS OF FACT . . . . . . . . . . . . . . . . . . .13
IV. CONCLUSION AND ORDERS . . . . . . . . . . . . . . . . .14
A. CONCLUSION . . . . . . . . . . . . . . . . . . . . . .14
B. ORDERS . . . . . . . . . . . . . . . . . . . . . . . .14
<PAGE>
I. INTRODUCTION
A. SUMMARY
This docket addresses Select Energy, Inc.'s request for an Electric
Supplier License to operate as an electric supplier providing electric
generation services to consumers within Connecticut. In this Decision, the
Department of Public Utility Control finds that Select meets the technical,
managerial and financial capability to operate as an electric supplier
serving commercial and industrial customers. The Department also finds
that upon Department review and approval of certain documents, Select will
meet the requirements to serve residential customers. Further, Select has
sufficiently demonstrated its ability to meet the renewable portfolio
standards. However, the record does not currently contain sufficient
information for the Department to make a determination as to whether Select
is in compliance with the Code of Conduct. Additionally, there is scant
evidence on the record concerning the circumstances surrounding Select's
procurement of the billing histories and interval load data for
approximately 3500 customers. The Department believes further
investigation into these issues is required. As a result, the Department
grants Select a provisional electric supplier license effective from
December 16, 1999, to June 30, 2000. The Department intends to open a
docket to conduct a full investigation into these matters.
B. BACKGROUND OF THE PROCEEDING
By application received on August 4, 1999, (Application), filed
pursuant to Statute 16-245 of the General Statutes of Connecticut (Conn.
Gen. Stat.) and Statute 16-245-1 to Statute 16-245-6, inclusive, of the
Regulations of Connecticut State Agencies (Conn. Agencies Regs.), Select
Energy, Inc. (Select) requested the Department of Public Utility Control's
(Department) approval for a license to operate as an electric supplier
providing energy to consumers within Connecticut.
C. CONDUCT OF THE PROCEEDING
By Notice of Hearing dated October 29, 1999, a public hearing on this
matter was to be held on November 16, 1999, at the Department's offices,
Ten Franklin Square, New Britain, Connecticut 06051. By Notice of
Rescheduled Hearing dated November 8, 1999, a hearing was conducted on
November 15, 1999. The hearing was continued to November 22, and 23, 1999,
at which time it was closed.
The Department issued a draft Decision in this matter on December 6,
1999. All parties were provided an opportunity to file written exceptions
to and give oral argument on the draft Decision.
D. PARTIES AND INTERVENORS
The Department recognized Select Energy, Inc., 107 Selden Street,
Berlin, Connecticut 06037; and the Office of Consumer Counsel (OCC), Ten
Franklin Square, New Britain, Connecticut 06051, as Parties to this
proceeding.
The Department recognized the State of Connecticut Office of the
Attorney General (AG) as an Intervenor to this proceeding.
II. DEPARTMENT ANALYSIS
A. COMPANY STRUCTURE
Select is a corporation organized in Connecticut on September 26,
1996, with principal offices in Berlin, Connecticut. Application, p. 6;
Late Filed Exhibit No. 2. Select is a wholly-owned subsidiary of NU
Enterprises, Inc., which is a wholly-owned, unregulated subsidiary of
Northeast Utilities (NU). September 29, 1999 Response to Department Letter
of September 1, 1999, Item #1. Since receiving approval from the Federal
Energy Regulatory Commission (FERC) in 1998 to become a competitive
wholesale power marketer, Select has been aggressively expanding its
wholesale bulk power marketing, and retail businesses throughout the
Northeast. Application, Attachment C-5, p. 7. Select testified that its
operations are physically separated from those of its regulated affiliates,
including its information technology and customer support activities. Late
Filed Exhibit No. 14; Tr. 11/22/99, pp. 349-350.
The daily operations of Select are managed by a chief executive
officer and two officers. Tr. 11/15/99, pp. 25-26. Its board of directors
is made-up of four officers, including the chief executive officer. Tr.
11/22/99, pp. 336-337. Select stated that it has no employees of its own.
Late Filed Exhibit No. 15. Certain employees of Northeast Utilities
Service Company (NUSCO) provide full-time functional support for Select.
Other NUSCO employees provide part-time administrative support in a variety
of functional areas. The total number of NUSCO employees dedicated to
Select and to the unregulated group controller function is 162. ID.
Select confirmed that those NUSCO personnel were assigned to work
exclusively for Select consistent with the laws and Code of Conduct as set
forth in Conn. Agencies Regs. Statute 16-244h-1 to Statute 16-244h-7,
inclusive. Late Filed Exhibit No. 1.
Conn. Agencies Regs. Statute 16-244h-5(h) provides in part that,
Except as permitted in subsection (f) of [Conn. Agencies Regs.
Statute 16-244h-5], an electric distribution company and its
generation entities or affiliates shall not jointly employ the
same employees. This prohibition against joint employees also
applies to board of directors and corporate officers, except that
if an electric distribution company and its generation entities
or affiliates are controlled by a holding company, any board
member or corporate officer may serve on the holding company and
with either the electric distribution company or its generation
entities or affiliates, but not both.
Conn. Agencies Regs. Statute 16-244h-5(f), in turn, provides in part
that,
(1) An electric distribution company, its parent holding
company, or a separate affiliate created solely to perform
corporate support services may share with its generation entities
or affiliates joint corporate oversight, governance, support
systems and personnel. Any shared corporate support shall be
priced, reported and conducted in accordance with the separation
and information standards set forth in sections 16-244h-1 to 16-
244h-7, inclusive, of the [Conn. Agencies Regs.], as well as
other applicable department pricing and reporting requirements. .
. . (3) Examples of service that may be shared include, but are
not limited to: payroll, taxes, shareholder services, insurance,
financial reporting, corporate financial planning and analysis,
corporate accounting, corporate security, human resources
(compensation, benefits, employment policies), employee records,
regulatory affairs, lobbying, legal, and pension management.
Examples of services that may not be shared include: employee
recruiting, engineering, hedging and financial derivatives and
arbitrage services, electric purchasing for resale, purchasing of
electric transmission, system operations and marketing.
The record indicates that in 1999, Select has shared a number of
officers with its regulated affiliate, The Connecticut Light and Power
Company (CL&P), as follows:
TABLE 1
Percent Payroll Charged
January - October 1999
<TABLE>
<CAPTION>
Employee Employee Select Other Regulated
Name Title Energy Unregulated (CL&P)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
F. Sabatino Senior Vice President - Power 95.5 3.9 0.4
Marketing and Director
J. Noyes N/A 89.8 0.5 9.5
C. Psoter N/A 49.3 30.0 20.6
F. Klein Assistant Secretary 42.3 7.9 49.5
J. Roman Controller 1.4 3.0 95.5
D. McHale Treasurer 5.9 32.0 62.0
M. Sullivan Secretary 9.7 15.1 74.9
R. Aronson Assistant Treasurer - Treasury 3.2 0.8 95.8
Operations
</TABLE>
Source: Late Filed Exhibit No. 1 HS 01, p. 2; Response to Interrogatory EL-
25, p. 2. Select stated that it does not anticipate any material changes
in these data for the remainder of 1999. As for 2000, Select anticipates
that the 1999 percentages are a proxy for the charges split between the
unregulated and the regulated businesses with the exception that those
individuals who were assigned in 1999 directly to the unregulated business
will charge their time and services to the unregulated and competitive
business units. Id.
The data contained in Table 1 indicate that without significant
changes to the NUSCO employee assignment and allocation, Select will not be
in compliance with the Code of Conduct. Furthermore, there are no data
concerning the services assignment or payroll allocation for NUSCO's other
approximately 150 employees assigned to Select. The record does not
contain sufficient information for the Department to make a determination
as to whether Select is in compliance with the Code of Conduct. Therefore,
the Department believes that further investigation is required.
The Code of Conduct unambiguously prohibits Select and CL&P from
employing the same employees, with limited exceptions, and the Department
requires strict adherence to the Code of Conduct. Select must not employ,
in violation of the Code of Conduct, any employees assigned to perform
services for CL&P. To preserve the level of managerial capability upon
which Select's electric supplier license is based, Select should retain its
current officers and directors until the Department completes its
investigation into the Code of Conduct issues. The Department will order
that from the date of this Decision to January 1, 2001, Select must notify
the Department of any realignment of Select's officers, managers and
supervisors at least 10 days prior to implementing such changes. More
importantly, the Department will require strict monitoring and auditing to
ensure that costs are not shifted to the regulated affiliate, CL&P. To
avoid the potential for subsidization of Select by CL&P ratepayers, the
Department believes it would be more appropriate for employees dedicated to
Select to work directly for Select rather than NUSCO, which also provides
services to CL&P.
B. TECHNICAL CAPABILITY
Select intends to operate as a marketer of electric generation
services. Tr. 11/15/99, P. 120. Select Proposes to offer electric
generation services to all customer classes (COMMERCIAL, INDUSTRIAL,
RESIDENTIAL, AND GOVERNMENTAL) throughout Connecticut. Application, P. 5.
Both the AG and the OCC have reservations about Select's readiness and
commitment to serve residential customers. OCC Brief, p. 2, AG Brief, p. 2.
The AG states in its brief that the Department should reject Select's
Application unless Select commits to serving residential customers. AG
Brief, p. 7. The OCC also states that the Department should reject
Select's Application until such time that Select has developed a meaningful
plan for the implementation of service to residential customers. OCC
Brief, p. 6. The Department recognizes that Select is not currently
positioned to market and serve residential customers directly. For the
benefits and welfare of the Connecticut consumers, the Department strongly
encourages Select to actively market and serve residential customers in
Connecticut.
To date, Select has provided approximately 500 Megawatts (MW) of
electric generation services to retail end-use customers in five different
states: RHODE ISLAND, MASSACHUSETTS, NEW HAMPSHIRE, NEW YORK and
PENNSYLVANIA. Confidential Response to Interrogatory EL-10. Roughly 5
percent of Select's total retail load is made up of residential customers;
the remaining 95 percent is commercial or industrial in nature.
Confidential Response to Interrogatory OCC-17, p. 2 OF 4; Tr. 11/22/99,
p. 290. Select is the supplier for one of the largest retail aggregated
loads in New England, consisting of municipal and commercial customers in
Massachusetts and Rhode Island. Tr. 11/15/99, p. 20.
Select has experience providing electric generation at the wholesale
level. Last year, Select successfully fulfilled the terms and conditions
of its one-year, 3,000 MW commitment to provide standard offer service for
Boston Edison. Response to Interrogatory EL-8. During 1998 and 1999,
Select executed a number of firm and non-firm agreements to sell electric
generation at the wholesale level, and deliver it to the New England Power
Pool (NEPOOL) Pool Transmission Facilities (PTF). Response to
Interrogatory EL-9. According to Select, it has "always fulfilled on its
supply obligations in serving hundreds of supply contracts." Tr. 11/15/99,
p. 18.
Select has successfully procured power and delivered it to wholesale
and retail customers. Select testified that in the future it will use all
tools available to procure power sufficient to meet its Connecticut retail
load, including Request for Proposals (RFP), bilateral contracts and spot
market purchases. Response to Interrogatory EL-5.
Select retains sufficient capabilities to provide customer service and
interact with electric distribution companies. It has an established
information technology (IT) system to maintain overall customer information
and billing data. Response to Interrogatory EL-11. Select maintains a
Customer Information Center (CIC) in Berlin, Connecticut, staffed by eight
persons, to conduct all customer interactions. Responses to
Interrogatories EL-27 AND EL-48. Select has successfully completed
Electronic Data Interchange (EDI) testing in New Jersey. Moreover, Select
has played a leading role with EDI testing, operations and complaince in
Massachusetts and Pennsylvania. Response to Interrogatory EL-12.
Based on the foregoing, the Department finds that Select has
sufficiently demonstrated its technical capability, as required under Conn.
Gen. Stat. <section>16-245, to operate as an electric supplier in
Connecticut.
C. RENEWABLE PORTFOLIO REQUIREMENTS
Under Conn. Gen. Stat. <section> 16-245a and Conn. Agencies Regs.
<section>16-245-5, Select is required to demonstrate that not less than 0.5
percent of its total electricity output shall be generated from Class I
renewable energy sources and an additional 5.5 percent of its total
electricity output shall be from Class I or Class II renewable energy
sources.
Select does not own any electric generation facilities, and therefore,
Select must and intends to contract for renewable resources to meet its
renewable portfolio requirements. Tr. 11/15/99, pp. 141, 165-166. Select
stated that, to meet its Class I renewable resources requirements, it will
estimate the megawatt hours that it anticipates to serve in the year 2000,
calculate 0.5 percent of those megawatt hours and then contract with third
parties for those megawatts. Tr. 11/22/99, pp. 344-345. Select stated that
Class I facilities exist today, that Class I renewable resources are
available, that it believes there are sufficient Class I renewable
resources to meet the requirement, and that it does not see a problem with
meeting Class I requirements unless a significant portion of the state's
customers go to retail choice in 2000. Tr. 11/15/99, pp. 168-169; Tr.
11/22/99, pp. 346-347. Although Select has not contracted with any party
for Class I renewable resources at this time, it stated that it has
discussed purchases with multiple suppliers. Confidential Tr. 11/22/99, p.
309.
To meet its Class II renewable resources requirements, Select has
entered into an agreement with Northeast Generation Company (NGC), another
wholly-owned subsidiary of NU, and has filed a contract with FERC to
purchase the output of the NGC resources for a four-year period. Tr.
11/15/99, p. 141. In the Confidential Hearing, Select has demonstrated
that it can reasonably meet the Class II renewable resources requirements.
Confidential Tr. 11/22/99, p. 305. Based on the foregoing, the Department
believes that Select can fulfill its renewable portfolio requirements .
Select stated that it will make all attempts to meet the renewable
resources requirement and is not requesting a waiver at this time. Tr.
11/15/99, p. 140. However, Select states that it reserves the right to
seek a waiver pursuant to Section 19 of Public Act 99-225, AN ACT
CONCERNING REVISIONS TO CERTAIN PROGRAMS AND OPERATIONS OF THE DEPARTMENT
OF ENVIRONMENTAL PROTECTION, EXTENSION OF CERTAIN WATER MAINS BY
MUNICIPALITIES AND SPECIFICATIONS FOR CERTAIN PURCHASES MADE BY THE STATE,
if (a) renewable resources are scarce, or (b) a waiver is granted to
another electric supplier, on the basis of maintaining a competitive level
playing field with Select's competitors. Tr. 11/15/99, pp. 21, 140.
Section 19 of Public Act 99-225 provides that the Department may allow
electric suppliers to comply with the renewable portfolio requirements up
to two years later than otherwise would be required if the Department finds
that such requirements cannot be reasonably met. The record clearly shows
that Select can meet the renewable portfolio requirements at this time.
Select has testified that it believes there is sufficient Class I renewable
resources to meet the requirement. Tr. 11/15/99, pp. 168-169; Tr.
11/22/99, pp. 346-347. Thus, the Department fully expects Select to meet
the renewable portfolio standards.
Select expressed concern that the prospective treatment of renewable
portfolio requirements, which would be based on MWh projections, might
force it to contract for more renewable resources than are necessary to
meet the required supply. Tr. 11/22/99, pp. 309-312. Select argues that
as a result, the cost of generation might be higher than necessary. To
address this potential discrepancy, Select proposed that a "cure period" be
implemented, during which a licensed electric supplier could make up the
difference between its projected and actual renewable portfolio generation.
ID.
The Department sees merit in an adjustment period for meeting
renewable resource requirements. It would give licensed electric suppliers
the flexibility to provide lowest cost generation and make good faith
efforts to meet the renewable resource requirements. Therefore, the
Department approves an adjustment period as part of the compliance filing
described below.
Not later than June 1, 2000, and every six months thereafter, Select
shall demonstrate to the Department that Select has complied with the
renewable portfolio requirements. For each reporting period, if Select
fails to meet Class I or Class II renewable portfolio requirements, it must
true-up the difference between actual and required amounts for each class
separately. Select must complete any required true-up within the
immediately following three months. If Select exceeds Class I or Class II
renewable portfolio requirements, Select can apply any excess amount of
Class I or Class II toward the renewable portfolio requirements of each
class, respectively, for the following reporting period. Any methods used
by Select in calculating its renewable resources must be in accordance with
Conn. Agencies Regs. <section>16-245-5. This quarterly reporting
requirement is in addition to, not in lieu of, Select's annual reports
pursuant to Conn. Agencies Regs. <section>16-245-5(b)(2).
In addition, renewable energy source tracking mechanisms do not
currently exist at ISO-NE. Tr. 11/15/99, pp. 140-141. Consequently, an
alternative mechanism to demonstrate compliance with the renewable resource
requirements must be implemented. As part of the filing in accordance with
Conn. Agencies Regs. <section>16-245-5(b)(2), the Department will require
Select to provide for the previous year each of the following: (1) actual,
total electricity output; (2) actual amount of output purchased from each
facility; (3) fuel type and description of each facility; (4) actual, total
output purchased from the ISO-NE spot market; and (5) calculations, in
accordance with Conn. Agencies Regs. <section>16-245-5, of the percentage
of total electricity output generated from Class I and Class II renewable
resources. In addition, Select must demonstrate the amount of Class I and
Class II renewable resources procured at the ISO-NE spot market. For
purposes of this reporting requirement, output purchased from the ISO-NE
spot market will be considered the same as the New England average for
each fuel source. Once a renewable energy source tracking mechanism has
been implemented at ISO-NE, the Department intends to use such mechanism
to the fullest extent possible to achieve the objectives outlined in Conn.
Gen. Stat. <section>16-245a.
D. FINANCIAL CAPABILITY
Select testified that it carries an adequate amount of insurance,
through its general liability, professional liability and workers'
compensation policies, to provide for or support its financial fitness to
perform its obligations as a electric supplier licensee. Application,
Attachment D-1; Late Filed Exhibit No. 7; Tr. 11/15/99, pp. 55-57. In
addition, Select maintains numerous surety bonds that are required as a
provision to conduct business with specific utilities and other state
regulatory entities. ID; Late Filed Exhibit No. 8.
To date, Select has provided its first and second quarter financial
statements for 1999. September 29, 1999 Response to Department Letter of
September 1, 1999, Item #1; Late Filed Exhibit No. 9. Select testified
that its third quarter financial statements for September 30, 1999, are
being reviewed and will be filed with the Securities and Exchange
Commission shortly. Tr. 11/22/99, pp. 398-400. A review of Select's June
30, 1999, quarterly financial statements shows cumulative losses of $33
million. Late Filed Exhibit No. 9. As of the second quarter, Select's
parent company, NU Enterprises, infused a total of $50 million in capital
and made an advance in the amount of $19.4 million. ID. Select stated
that its cash flow position would be evaluated on a quarterly basis to
determine a specific payoff date of the $19.4 million advance. Tr.
11/23/99, pp. 409-411.
OCC has reservations about Select's financial position in that Select
relies heavily on its parent to assist it with its unprofitable operations.
OCC Brief, p. 5. OCC stated that the Department should not grant Select an
electric supplier license until such time that the financial issues that
arose in these proceedings are resolved. OCC Brief, p. 7.
According to Conn. Agencies Regs. <section>16-245-4, an electric
supplier shall maintain security in an amount of $250,000 that will ensure
its financial responsibility and its supply of electricity to end use
customers in accordance with contracts, agreements or arrangements.{1} In
compliance with the Department's licensing requirements, Select has posted
a performance guarantee in the amount of $250,000 from NU to pledge its
full and prompt performance of its payment obligations. Application,
Attachment E-1. In addition, Select provided evidence of NU's credit
rating to ensure that NU is creditworthy and has the financial resources to
perform it obligations as the guarantor. Tr. 11/15/99, pp. 64-66; Late
Filed Exhibit No. 11.
OCC is concerned that the proposed merger of NU with Consolidated
Edison casts doubt on Select's ability to honor contracts going forward if
the merger takes place. OCC Brief, p. 7. In response to questions about
the merger and its possible effect on the parent guarantee, Select
testified that the merger would enhance the creditworthiness of all the NU
companies. Select expects the merger to improve its ability to secure
credit instruments. Tr. 11/15/99, pp. 64-65.
Select has no history of bankruptcy, dissolution, merger or
acquisition in the two calendar years immediately preceding this
Application. Application, Attachment C-7. Select stated that it has the
financial capability to meet its supply obligations to Connecticut's
consumers as demonstrated by its ability to carry specific insurance
coverage, performance guarantee, and access to external and internal credit
instruments. Select Brief, p. 4; Tr. 11/23/99, p. 411; Application,
Attachments D-1 and E-1. Further, Select's financial capability is
enhanced by NU's equity contributions and advances. The Department
concludes that Select possesses adequate financial resources, as required
under Conn. Gen. Stat. <section>16-245, to provide electric supplier
services. However, the Department directs Select to file its September 30,
1999, quarterly financial statements no later than December 15, 1999, and
its 1999 audited financial statements no later than March 15, 2000.
E. MANAGERIAL CAPABILITY
Select is managed by a chief executive officer, William Schivley, and
two officers, Frank Sabatino and Stephen Fabiani, all of whom have
extensive experience in both the regulated and competitive electric
industry. Tr. 11/15/99, pp. 25-26; Late Filed Exhibit No. 2. According to
Select, each of these officers with the exception of Fabiani has been an
integral part in managing the BOSTON EDISON Company STANDARD OFFER SERVICE
CONTRACT, WHICH IS THE LARGEST POWER SUPPLY ARRANGEMENT IN THE NEWLY
RESTRUCTURED ELECTRIC INDUSTRY. Late Filed Exhibit No. 2.
Mr. Schivley has 26 years of energy industry experience, most recently
at CMS Energy Company in Michigan. He was executive vice president and
chief operating officer for CMS Marketing Services and Trading Company,
which employed 200 and had $1 billion in sales. Prior to that, Schivley
formed and became president of CMS Electric and Gas Marketing Company.
Late Filed Exhibit No. 1.
Mr. Sabatino is responsible for power marketing, supply aggregation and
fossil fuel purchasing for Select. The record indicates that he has over
29 years of energy industry experience. Sabatino began his career at NU as
a cadet engineer in 1970 and rose through positions of increasing
responsibility until he assumed his present position at Select in April
1999. Application, Attachment C-2.
Mr. Fabiani is responsible for building and directing Select's
unregulated retail sales and marketing organization in conjunction with
developing reliable energy supply strategies and innovative energy products
and services to provide total energy solutions for customers. ID. Prior
to his career at NU, Fabiani was employed at EnergyVision as vice president
of Supply and Risk Management. He began his career at NU in November 1998.
Based on the evidence presented, the Department finds that Select has
the managerial capability, as required under Conn. Gen. Stat. <section>16-
245, to provide electric supplier services in Connecticut.
F. CUSTOMER SERVICE
In its application, Select indicated that it would offer its services
to all types of customers (commercial, industrial, and residential).
Application, Section F(2). Through the course of the proceeding, it became
apparent that Select is not ready to offer its services to the residential
portion of the deregulated electric supply market. In its brief, Select
states that it is not currently positioned to market and serve residential
customers directly. Select Brief, p. 8.
1. Customer Service Plan
Under Conn. Agencies Regs. <section>16-245-2(b)(12), Select is
required to submit a customer service plan. This plan must consist of its
security deposit procedures and requirements, customer complaint handling
and dispute resolution procedures, customer termination procedures,
customer rights and responsibilities and customer information and
disclosure procedures.
At the present time, Select will not require a security deposit from a
residential customer, as stated in its draft residential electric service
agreement. Select Brief, Exhibit B. The AG, is concerned about Select's
testimony that the issue of credit screening for the purpose of initiating
security deposits for residential customers could be taken up at a later
date. AG Brief, p. 4, Tr. 11/23/99, p. 441. The AG and the OCC argue
that Select should be required to submit to the Department for review and
approval any proposed changes to the residential contract that would
introduce credit screening. AG Brief, p. 5; OCC Brief, p. 3. The
Department agrees, and will so order below. The Customer Security Deposit
and Credit Procedures, as shown in Exhibit C-11 of the Application, must be
revised to reflect Select's current policy of not collecting security
deposits from residential customers.
In its Energy Supply Agreement (ESA) for commercial and industrial
customers, Select will require that customers be subject to credit approval
prior to commencement of service or if a customer's credit situation
changes materially. Select Brief, Exhibit A. A receipt for the security
deposit will be provided to each customer and a record will be kept of each
security deposit collected. Response to Interrogatory EL-51. Select has
testified that it would abide by any Connecticut laws concerning the
return of security deposits and the determination of good credit. Tr.
11/15/99, p. 106. Select has testified that it would maintain specific
security deposit requirements, such as criteria to warrant the return of
the deposit, within the context of the ESA. Tr. 11/15/99, pp. 104-106, Tr.
11/22/99, p. 322. Furthermore, Select has stated that the terms and
conditions regarding customer credit checks would be made available to
customers prior to the signing of the ESA. Tr. 11/15/99, p. 322.
Select's CIC will be accessible from 8 a.m. to 5 p.m. Monday through
Friday. Application, Exhibit C-11, Customer Service Plan. Select will not
maintain a walk-in customer service location. Response to Interrogatory
EL-49. Select has provided its toll free customer service number and
mailing address for customer inquiries and complaints. Application
Sections C (8) & C (9). After normal business hours, Select will maintain
voice messaging and e-mail access. Response to Interrogatory EL-44. It is
Select's policy to respond to voice messages and e-mail messages within 24
hours, barring unforeseen circumstances. Tr. 11/15/99, pp. 101-102.
Select has provided the name, address, telephone number and fax number of
the employee designated for complaint resolution for the Department's
Consumer Assistance and Information Unit. Response to Interrogatory EL-28.
Select has stated it will maintain all records of customer complaints for a
minimum of three years from the date of the complaint and will make
customer complaint records available to the Department upon request.
Application Exhibit C-11, Customer Service Plan. Select currently employs
bilingual personnel in its CIC. Response to Interrogatory EL-46. The toll
free number used by the CIC can accommodate up to 300 calls. Response to
Interrogatory EL-45. Select currently employs six customer service
representatives to answer its toll free number. Response to Interrogatory
EL-47, Tr. 11/15/99, p. 102. At the present time, Select does not
anticipate additional staff for this purpose, but testified that it would
increase the number of staff as customers increase. Tr. 11/15/99, pp. 102-
103. In addition to the customer service representatives, Select has two
supervisors available for resolving customer complaints and inquiries.
Response to Interrogatory EL-48. Although Select does not anticipate
adding customer service staff in the near future, Select would do so if
the need arises as its customer base grows. Tr. 11/15/99, p. 103.
Select's termination policy was submitted as part of its customer
service plan and further refined in response to Interrogatory EL-53.
Select has stated that it cannot disconnect a customer's electric service
for any reason; only the Distribution Company can. Application Exhibit C-
11, Customer Service Plan. Select can terminate an ESA if any account
balance is outstanding more than 30 days past the due date. ID. The exact
procedures that Select will undertake, and which comply with Conn. Agencies
Regs. <section>16-3-100, are:
At fifteen (15) days past due, a bill is considered delinquent
and contact with the customer will be initiated by letter.
At thirty (30) days past due, the Select's Credit and Collection
Department (CCD) will attempt to contact the customer by
telephone. If they are unable to contact the customer by
telephone, or unable to obtain a payment arrangement, then
another letter will be sent to the customer concerning actions to
be taken if payment is not forthcoming.
At forty-five (45) days past due, the CCD will again attempt to
reach the customer by telephone to secure payment or make a
payment arrangement. If payment is not forthcoming, the CCD will
review each account to ensure that a revert to host letter was
sent to the customer. The CCD will initiate action to the Local
Distribution Company to revert the customer to host. A letter
will be sent to the customer indicating that the contract has
been terminated and that the account will be reverted to host at
the next scheduled meter reading.
Source: Response to Interrogatory EL-53-RV01.
Select reported that in the states in which it is currently operating,
it does not report delinquent customers to a credit-reporting agency. Tr.
11/15/99, p. 77. Select intends to do the same in Connecticut, but would
notify its customers if its policy changes. Tr. 11/15/99, pp. 77-78. .
The Department will require Select to notify the Department prior to
implementing any changes in Select's delinquency reporting policy.
In the Customer Service Plan submitted with the Application, Select
included a section on Customer Rights and Responsibilities. Application
Exhibit C-11, Customer Service Plan. This section states that a customer
has until midnight of the third business day after the day on which the
customer executed an ESA to cancel that ESA by contacting Select at its
toll free number. ID. When asked how customers would be made aware of all
Select's customer service policies, Select stated that it anticipated
developing a "Customer Rights Handbook" prior to the retail access date of
January 1, 2000. The handbook would clearly delineate customer rights and
responsibilities and address Select's customer service policies. Response
to Interrogatory EL-54. The handbook, submitted as Late Filed Exhibit No.
13, was not a finished document Select plans to complete the handbook by
late December. Tr. 11/15/99, p. 110. To satisfy the requirement of
Conn. Agencies Regs. <section>16-245-2(b)(12) , a complete version of the
handbook must be submitted to the Department no later than January 31,
2000. The handbook must contain all of Select's customer service policies
and should clearly distinguish residential customer policies and procedures
from those for commercial or industrial customers.
Select intends to maintain its customer data in its IT system that
will preserve overall customer information and billing data. According to
Select, the IT system employs security measures to protect confidential
customer information. Response to Interrogatory EL-11. Select further
testified that its system is secure and can only be accessed by its
employees. Tr. 11/15/99, pp. 72-73. Select has stated that its policies
and procedures for switching a customer's electric supplier will be in
compliance with Conn. Gen. Stat. <section>16-245s(b). Response to
Interrogatory EL-32. Select has also affirmed that it will not release
customer information unless it has a release authorization to do so.
Application, Affidavit No. 4.
Select is not currently under investigation in any state or jurisdiction
for violation of any consumer protection law or regulation. Application,
Section C (18). Additionally, Select has not been fined, sanctioned, or
otherwise penalized for violation of any consumer protection law or
regulation in any state or jurisdiction. Application, Section C (19).
2. Standard Service Contract
In response to the presiding commissioner's request during the
hearing, Select submitted to the Department a revised commercial/industrial
Energy Supply Agreement (ESA) and a residential Electric Generation
Services Agreement (EGSA) in Select's Brief. The Department has reviewed
the ESA and EGSA and finds them to be acceptable at this time. However,
the ESA requires one minor exception. The second page of the ESA must be
revised to include Select's fax number and instructions for customers to
submit the cancellation page to Select through fax.
The Department recognizes that the EGSA is only a working draft at
this time. Therefore, the Department will order Select to submit a final,
complete version of its EGSA no later than January 31, 2000. Select
anticipates that the residential market will take time to develop. Select
Brief, p. 8. In light of this, the Department's timeframes for submission
of the EGSA and Customer Rights Handbook will allow Select sufficient time
to produce these documents.
3. Acquisition of Customer Information
According to CL&P's website, as of November 15, 1999, CL&P has
provided Select with the billing histories of 3500 customers and interval
load data for 45 customers. When questioned about this at the hearing,
Select testified that it had received information and " . . . there are no
instances where CL&P will just send us information from a customer that we
are not already working with." Tr. 11/15/99, p.126.
Section 16-245o(a) of the Conn. Gen. Stat. provides that CL&P, as an
electric company,
. . . shall make available to all electric suppliers customer
names, addresses, telephone numbers, if known, and rate class. .
. . Additional information about a customer for marketing
purposes shall not be released to any electric supplier unless a
customer signs a release which shall be made available to the
Department.
Select asserted that CL&P must have obtained customer releases prior
to providing Select with such billing histories and interval load data
information. Tr. 11/15/99, pp. 122-129. However, due to the large number
of customer records involved, the Department is compelled to look into the
circumstances surrounding the procurement of such releases. The Department
is extremely concerned that Select may have been improperly provided with
customer information. The Department intends to pursue this issue in depth
in other proceedings. In the interim, the Department prohibits Select from
soliciting, marketing, providing electric generation services to or
entering into any contractual arrangement concerning electric generation
services with any customers whose information, billing history or load data
have been provided to Select by CL&P prior to the date of this Decision.
The Department will require Select to submit to the Department all the
customer information Select has received from CL&P up to the date of this
Decision.
III. FINDINGS OF FACT
1. Select is a public corporation organized in Connecticut on September 26,
1996, with principal offices in Berlin, Connecticut.
2. Select is a wholly-owned subsidiary of NU Enterprises, Inc. which is a
wholly-owned, unregulated subsidiary of NU.
3. Select intends to operate as a marketer of electric generation services.
4. Select proposes to offer electric generation services to all customer
classes (commercial, industrial, residential, and governmental)
throughout Connecticut.
5. To date, Select has provided a total of approximately 500 MWs of
electric generation services to retail end-use customers in Rhode
Island, Massachusetts, New Hampshire, New York and Pennsylvania.
6. Select proposes to demonstrate compliance with the renewable portfolio
requirements through contracts with entities that have resources that
meet the requirements in the statutes.
7. Select has entered into an agreement with NGC, a corporate affiliate, to
provide Select with output from NGC's Class II renewable resources.
8. Select has no employees of its own. Certain NUSCO employees provide
full-time functional support for Select while other NUSCO employees
provide Select with part-time administrative support in a variety of
functional areas.
9. From January to October of 1999, a number of Select officers have been
assigned to perform services for both Select and CL&P.
10. Select carries general liability, professional liability and workers'
compensation insurance policies that are specifically intended to
provide for or support its financial fitness to perform its obligations
as a electric supplier licensee.
11. Select has posted a performance guarantee in the amount of $250,000
from NU to pledge its full and prompt performance of its payment
obligations.
12. Select has no history of bankruptcy, dissolution, merger or acquisition
in the two calendar years immediately preceding this Application.
13. Select is currently not prepared to serve residential customers.
14. Select Energy will not require security deposits from residential
customers.
15. Select Energy's "Customer Rights Handbook" has not been completed.
16. As of November 15, 1999, CL&P has provided Select with the billing
histories of 3500 customers and interval load data for 45 customers.
IV. CONCLUSION AND ORDERS
A. CONCLUSION
Based on the evidence presented, the Department concludes that Select
has adequate technical, managerial, and financial capabilities, as required
under Conn. Gen. Stat. <section>16-245, to provide electric generation
services to commercial and industrial customers in Connecticut. Prior to
Select being allowed to serve residential customers, it must provide
certain documents for Department review and approval, as ordered below.
The Department is extremely concerned about Select's employee sharing
arrangement with CL&P. The Department is also very concerned that Select
might have been provided with customer information, billing history and
load data prior to having obtained proper customer releases. Therefore, at
this time, the Department grants Select only a provisional electric
supplier license. To obtain a non-provisional license, Select must
demonstrate to the satisfaction of the Department that Select fully
observes and complies with the Code of Conduct and other Connecticut law.
The provisional license will be effective from December 16, 1999 to June
30, 2000. The Department intends to open a docket to conduct a full
investigation into these matters.
B. ORDERS
1. No later than December 17, 1999, Select shall submit to the Department
a complete list of the names of all Select's officers, managers and
supervisors and their respective titles. From the date of this
Decision to January 1, 2001, Select shall notify the Department of any
realignment of Select's officers, managers and supervisors at least 10
days prior to implementing such changes.
2. No later than December 20, 1999, Select shall submit to the Department
all the customer information Select received from CL&P prior to the
date of this Decision.
3. No later than December 20, 1999, Select shall file its September 30,
1999 quarterly financial statements.
4. No later than December 30, 1999, Select shall file a revised Customer
Service Plan that reflects its current policy of not requiring
security deposits from residential customers.
5. No later than January 31, 2000, Select shall submit a complete version
of its Customer Rights Handbook to the Department.
6. No later than January 31, 2000, Select shall submit the final,
complete version of its residential Electric Generation Services
Agreement to the Department for review and approval.
7. No later than April 15, 2000, Select shall file its 1999 audited
financial statements.
8. No later than June 1, 2000, and every six months thereafter, Select
shall demonstrate to the Department that Select has complied with the
renewable portfolio requirements.
9. Not less than 20 days before Select executes its first contract for
the sale of electric generation services to an end use customer in
Connecticut, Select shall file with the Department an affidavit
concerning Select's capability to exchange data with the electric
distribution companies in accordance with Conn. Agencies Regs.
<section>16-245-3(b).
10. Select shall notify the Department within 30 days of the institution
of renewable energy portfolio requirements in any other state in which
Select is licensed to provide electric generation services. If
applicable, Select shall notify the Department immediately of the
existence of renewable energy portfolio requirements in any other
state in which Select is licensed to provide electric generation
services.
11. Select shall submit its revised residential Electric Generation
Services Agreement to the Department prior to implementing any changes
in Select's current credit-screening criteria or security deposit
procedures.
12. Select shall maintain its customer complaint records to indicate: (1)
the date of the complaint; (2) the name and address of the
complainant; (3) the address or location of the complaint; (4) a
description of the complaint; and (5) a description of the resolution
of the complaint .
13. Select shall provide the Department with any changes to Select's
customer service practices, procedures or policies in writing at least
10 business days prior to the effective date of such changes.
14. Until authorized by the Department, Select shall not solicit, market,
provide electric generation services to or enter into any contractual
arrangement concerning electric generation services with any customers
whose information, billing history or load data were provided to
Select by CL&P prior to the date of this Decision.
15. When marketing its electric generation services or soliciting
customers, Select shall inform potential customers that Select has
only a provisional electric supplier license effective from December
16, 1999 to June 30, 2000.
**FOOTNOTES**
{1} For purposes of Conn. Agencies Regs <section>16-245-2, security means
bond, letter of credit, guarantee, or other appropriate financial
instrument from a creditworthy financial institution or other security as
determined by the Department. Such security shall name the Department as
obligee.
<PAGE>
DOCKET NO. 99-08-03 APPLICATION OF SELECT ENERGY, INC. FOR AN
ELECTRIC SUPPLIER LICENSE
This Decision is adopted by the following Commissioners:
Glenn Arthur
John W. Betkoski, III
Jack R. Goldberg
CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of the Decision issued by the
Department of Public Utility Control, State of Connecticut, and was
forwarded by Certified Mail to all parties of record in this proceeding on
the date indicated.
------------------------------------ ----------
Louise E. Richard Date
Acting Executive Secretary
Department of Public Utility Control
