UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the quarterly period ended June 30, 1997
Northeast Utilities
------------------------------------
(Name of registered holding company)
Selden Street, Berlin, CT. 06037
----------------------------------------
(Address of principal executive offices)
Name and telephone number of officer to whom inquiries
concerning this report should be directed:
John J. Roman, Vice President and Controller
Telephone number: 860-665-5000
GENERAL INSTRUCTIONS
A. Use of Form
1. A reporting company, as defined herein, shall file a
report on this form within 60 days after the end of each
of the first three quarters, and within 90 days after the
end of the fourth quarter, of the fiscal year of the
registered holding company. The period beginning on
the date of effectiveness of rule 58 and ending at the
end of the quarter following the quarter in which the
rule becomes effective shall constitute the initial period
for which any report shall be filed, if applicable.
2. The requirement to provide specific information by
means of this form supersedes any requirement by
order of the Commission to provide identical
information by means of periodic certificates under rule
24; but does not so supersede and replace any
requirement by order to provide information by means
of an annual report on Form U-13-60.
3. Information with respect to reporting companies that
is required by Form U-13-60 shall be provided
exclusively on that form.
4. Notwithstanding the specific requirements of this
form, this Commission may informally request such
further information as, in its opinion, may be necessary
or appropriate.
B. Statements of Monetary Amounts and Deficits
1. Amounts included in this form and in related
financial statements may be expressed in whole
dollars, thousands of dollars or hundred thousands of
dollars.
2. Deficits and other similar entries shall be indicated
by either brackets or parentheses. An explanation
should be provided by footnote.
C. Formal Requirements
This form, including exhibits, shall be filed with
Commission electronically pursuant to Regulation
S-T(17 CFR 232.10 et seq.). A conformed copy of
each such report shall be filed with each state
commission having jurisdiction over the retail rates of a
public utility company that is an associate company of
a reporting company. Each report shall provide the name
and telephone number of the person to whom inquiries
concerning the report should be directed.
D. Definitions
As used in this form, the word "reporting company"
means an energy-related company or gas-related
company, as defined in rule 58(b). All other words and
terms have the same meaning as in the Public Utility
Holding Company Act of 1935, as amended, and the rules
and regulations thereunder.
ITEM 1 - ORGANIZATION CHART
- ---------------------------------------------------------------------------
Instructions
- ------------
1. Complete Item 1 only for the first three calendar quarters of the
fiscal year of the registered holding company.
2. Under the caption "Name of Reporting Company," list each
energy-related and gas-related company and each system company that
directly or indirectly holds securities thereof. Add the designation
"(new)" for each reporting company of which securities were acquired
during the period, and the designation"(*)" for each inactive company.
3. Under the caption "Percentage of Voting Securities Held," state the
aggregate percentage of the outstanding voting securities of the
reporting company held directly or indirectly by the registered holding
company at the end of the quarter.
4. Provide a narrative description of each reporting company's
activities during the reporting period.
- ---------------------------------------------------------------------------
Name of Reporting Company - Select Energy, Inc.
100% owned by Northeast Utilities
Energy or gas-related company - Energy-related company
Date of organization - September 26, 1996
State of Organization - Connecticut
Percentage of Voting Securities Held - 100% by Northeast Utilities
Nature of Business - Invest in energy-related activities
Activities during the reporting period -
Marketing of energy in the New Hampshire retail competition pilot program.
Marketing activities related to request for proposals for energy service.
Marketing activities in Phase 1 of Rhode Island open access.
Marketing of energy appliances.
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
- ------------------------------------------------------------------------
Instruction
- -----------
With respect to a transaction with an associate company, report
only the type and principal amount of securities involved.
- ------------------------------------------------------------------------
Company Issuing Security - None
Type of Security Issued - None
Principal Amount of Security - None
Issue or Renewal - None
Cost of Capital - None
Person to Whom Security was Issued - None
Collateral Given With Security - None
Consideration Received for Each Security - None
Company Contributing Capital - Northeast Utilities
Company Receiving Capital - Select Energy, Inc.
Amount of Capital Contribution - $50,000
ITEM 3 - ASSOCIATE TRANSACTIONS
- -----------------------------------------------------------------------------
Instructions
- ------------
1. This item is used to report the performance during the quarter
of contracts among reporting companies and their associate
companies, including other reporting companies, for service,
sales and construction. A copy of any such contract not filed
previously should be provided as an exhibit pursuant to Item 6.B.
2. Parts I and II concern transactions performed by reporting
companies on behalf of associate companies, and transactions
performed by associate companies on behalf of reporting
companies, respectively.
- -----------------------------------------------------------------------------
Part I - Transactions performed by reporting companies on behalf
of associate companies.
Reporting Associate
Company Company Types of
Rendering Receiving Services Total Amount
Services Services Rendered Billed
- ----------------------- ------------ -------------- -------------
(Thousands
of Dollars)
NONE
Part II - Transactions performed by associate companies on behalf
of reporting companies.
Total Amount
Billed*
Associate Reporting
Company Company Types of Three months
Rendering Receiving Services ended
Services Services Rendered June 30, 1997
- ----------------------- ------------ -------------- -------------
(Thousands
of Dollars)
Northeast Utilities Select Marketing services $1,022
Service Company Energy, Inc. New product development 275
Power sales agreement 274
Customer billing
system development 199
Legal services 11
Miscellaneous 9
-------------
Total $1,790
=============
Public Service Company Select Customer billing
of New Hampshire Energy, Inc. system development $25
Marketing services 7
-------------
Total $32
=============
* 'Total Amount Billed' is direct costs only.
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
- ---------------------------------------
(Thousand of Dollars)
Total consolidated capitalization as of 6/30/97 $6,186,897 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 928,035 line 2
Greater of $50 million or line 2 928,035 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business):
Select Energy, Inc. (3,110)
-----------
Total current aggregate investment (3,110)line 4
---------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $931,145 line 5
=========
Investments in gas-related companies:
- ------------------------------------
NONE
Total current aggregate investment:
(categorized by major line of
gas-related business):
-
-----------
Total current aggregate investment $0
=========
ITEM 5 - OTHER INVESTMENTS
- ----------------------------------------------------------------
Instruction
- -----------
This item concerns investments in energy-related and gas-related
companies that are excluded from the calculation of aggregate
investment under rule 58.
- ----------------------------------------------------------------
Major Line Other Other
of Energy- Investment Investment
Related in Last in This Reason for Difference
Business U-9C-3 Report U-9C-3 Report in Other Investment
- ------------- ------------- ------------- ----------------------
NONE
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------------------------------------
Instructions
- ------------
A. Financial Statements
1. Financial statements are required for reporting companies in which
the registered holding company system has at least 50% equity or other
ownership interest. For all other rule 58 companies, the registered
holding company shall make available to the Commission such financial
statements as are available to it.
2. For each reporting company, provide a balance sheet as of the end of
the quarter and income statements for the three-month and year-to-date
periods ending as of the end of the quarter, together with any notes
thereto. Financial statements shall be for the first three quarters of
the fiscal year of the registered holding company.
3. If a reporting company and each of its subsidiaries engage
exclusively in a single category of energy-related or gas-related
activity, consolidated financial statements may be filed.
4. Separate financial statements need not be filed for inactive
companies or for companies engaged solely in the ownership of interests
in energy-related or gas-related companies.
B. Exhibits
1. Copies of contracts required to be provided by Item 3 shall be filed
as exhibits.
2. A certificate stating that a copy of the report for the previous
quarter has been filed with interested state commissions shall be filed
as an exhibit. The certificate shall provide the names and addresses of
the state commissions.
- ------------------------------------------------------------------------
A. Financial Statements
Select Energy, Inc.:
Balance Sheet - As of June 30, 1997
Income Statement - Three months and six months ended June 30, 1997
Northeast Utilities (PARENT):
Balance Sheet - As of June 30, 1997
Income Statement - Three months and six months ended June 30, 1997
B. Exhibits
Exhibit No. Description
- ----------- -----------
6.B.1.1 Northeast Utilities Service Company (NUSCO) Service Contract
dated as of October 7, 1996 between NUSCO and NUSCO Energy
Partners, Inc. *
6.B.1.2 Bulk Power Supply Service Agreement dated as of May 27, 1997,
between Public Service Company of New Hampshire (PSNH) and
PSNH Energy. **
6.B.1.3 Retail Competition Pilot Program Service Agreement dated as
of June 12, 1996 between PSNH and PSNH Energy. **
- -------------------
* NUSCO Energy Partners. has subsequently changed its name to
Select Energy, Inc.
** Select Energy, Inc. subsequently purchased PSHN Energy's interest in
these contracts.
2. No certificate is necessary since this is the first quarterly filing
of the U-9C-3.
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
June 30,
1997
------------
(Thousands
of Dollars)
ASSETS
- ------
Current Assets:
Receivables, net $ 113
Taxes receivable 1,709
Other 10
-------------
1,832
-------------
Total Assets $ 1,832
=============
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common shares, $1 par value. Authorized
and outstanding 100 shares $ -
Capital surplus, paid in 51
Retained earnings (3,161)
-------------
Total capitalization (3,110)
-------------
Current Liabilities:
Accounts payable 589
Accounts payable to affiliated companies 4,353
-------------
4,942
-------------
Total Capitalization and Liabilities $ 1,832
=============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
SELECT ENERGY, INC.
INCOME STATEMENT
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
1997 1997
------------- ------------
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues $ 369 $ 914
------------- ------------
Operating Expenses:
Operation
Purchased power - energy 230 498
Other 1,582 4,448
Maintenance 2 3
Federal and state income taxes (466) (1,370)
Taxes other than income taxes 3 4
------------- ------------
Total operating expenses 1,351 3,583
------------- ------------
Operating Loss (982) (2,669)
Other Deductions (19) (79)
------------- ------------
Net Loss $ (1,001) $ (2,748)
============= ============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
</TABLE>
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
June 30,
1997
-------------
(Thousands
of Dollars)
ASSETS
- ------
Other Property and Investments:
Investments in subsidiary companies, at equity........ $ 2,364,567
Investments in transmission companies, at equity...... 21,114
Other, at cost........................................ 409
-------------
2,386,090
-------------
Current Assets:
Cash.................................................. 10
Notes receivable from affiliated companies............ 29,400
Notes and accounts receivable......................... 788
Accounts receivable from affiliated companies......... 8,277
Prepayments........................................... 587
-------------
39,062
-------------
Deferred Charges:
Accumulated deferred income taxes..................... 4,808
Unamortized debt expense.............................. 288
Other................................................. 58
-------------
5,154
-------------
Total Assets...................................... $ 2,430,306
=============
Note: In the opinion of the Company, all adjustments necessary for a
fair presentation of financial position for the period shown
have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
June 30,
1997
--------------
(Thousands
of Dollars)
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common shares, $5.00 par value--Authorized
225,000,000 shares; 136,742,106 shares issued and
129,709,676 shares outstanding...................... $ 683,711
Capital surplus, paid in............................. 935,294
Deferred benefit plan--employee stock
ownership plan...................................... (162,776)
Retained earnings.................................... 753,452
--------------
Total common shareholders' equity.................. 2,209,681
Long-term debt....................................... 188,000
--------------
Total capitalization.......................... 2,397,681
--------------
Current Liabilities:
Accounts payable..................................... 2,276
Long term debt--current portion...................... 16,000
Accrued interest..................................... 2,419
Accrued taxes........................................ 11,275
Other................................................ 172
--------------
32,142
--------------
Other Deferred Credits................................. 483
--------------
Total Capitalization and Liabilities............. $ 2,430,306
==============
Note: In the opinion of the Company, all adjustments necessary for a
fair presentation of financial position for the period shown
have been made.
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
NORTHEAST UTILITIES (PARENT)
STATEMENT OF INCOME
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
1997 1997
------------- -------------
(Thousands (Thousands
of Dollars) of Dollars)
<S> <C> <C>
Operating Revenues.................................. $ 0 $ 0
------------- -------------
Operating Expenses:
Operation expense................................. 2,876 4,868
Federal and state income taxes.................... (2,878) (6,397)
Taxes other than income taxes..................... 8 39
------------- -------------
Total operating expenses..................... 6 (1,490)
------------- -------------
Operating (Loss) Income............................. (6) 1,490
------------- -------------
Other Income (Loss):
Equity in earnings of subsidiaries................ (61,269) (41,166)
Equity in earnings of transmission companies...... 747 1,504
Other, net........................................ 724 1,318
------------- -------------
Other loss, net.............................. (59,798) (38,344)
------------- -------------
Loss before interest charges................. (59,804) (36,854)
------------- -------------
Interest Charges:
Interest on long-term debt........................ 4,416 8,899
Other interest.................................... 219 1,181
------------- -------------
Interest charges............................ 4,635 10,080
------------- -------------
Loss for Common Shares.............................. $ (64,439) $ (46,934)
============= =============
Loss per Common Share............................... $ (0.50) $ (0.36)
============= =============
Common Shares Outstanding (average) 129,603,995 129,115,844
============= =============
Note: In the opinion of the Company, all adjustments necessary for a
fair presentation of the results of operations for the period
shown have been made.
See accompanying notes to financial statements.
</TABLE>
NORTHEAST UTILITIES
SELECT ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
1. Northeast Utilities
Northeast Utilities (NU or the company) is the parent company of the
Northeast Utilities system (the system). The system furnishes retail
electric services in Connecticut, New Hampshire and western Massachusetts
through four wholly-owned subsidiaries: The Connecticut Light and Power
Company, Public Service Company of New Hampshire (PSNH), Western
Massachusetts Electric Company, and Holyoke Water Power Company. A fifth
wholly-owned subsidiary, North Atlantic Energy Corporation, sells all of
its capacity to PSNH. In addition to its retail service, the system
furnishes firm and other wholesale electric services to various
municipalities and other utilities. The system serves about 30 percent of
New England's electric needs and is one of the 20 largest electric utility
systems in the country as measured by revenues.
Several wholly-owned subsidiaries of NU provide support services for the
system companies and, in some cases, for other New England utilities.
Northeast Utilities Service Company provides centralized accounting,
administrative, information resources, engineering, financial, legal,
operational, planning, purchasing and other services to the system
companies. North Atlantic Energy Service Corporation has operational
responsibility for the Seabrook nuclear generating facility.
Northeast Nuclear Energy Company acts as agent for the system companies
and other New England utilities in operating the Millstone nuclear
generating facilities. Three other subsidiaries construct, acquire or
lease some of the property and facilities used by the system companies.
NU has four other subsidiaries, Charter Oak Energy, Inc. (COE), HEC, Inc.
(HEC), Mode 1 Communications, Inc, (Mode 1), and Select Energy, Inc.
(Select Energy), which engage in a variety of activities.
Directly and through subsidiaries, COE develops and invests in
cogeneration, small-power production and other forms of nonutility
generation as permitted under the Public Utility Regulatory Policy Act,
and in exempt wholesale generators and foreign utility companies as
permitted under the Energy Policy Act of 1992. On March 26, 1997, the
NU Board of Trustees directed management to offer COE for sale. COE's
reserves and earnings historically have not been material to NU.
HEC provides energy management services for the system's commercial,
industrial and institutional electric customers and others. Mode 1 was
formed in 1996 to develop and invest in telecommunications activities.
In addition, NU has a 22.06 percent equity ownership interest, totaling
$21.1 million in two companies that transmit electricity imported from the
Hydro-Quebec system in Canada. The two companies own and operate
transmission and terminal facilities, which have the capability of
importing up to 2,000 MW from the Hydro-Quebec system.
2. Select Energy, Inc.
NU organized NUSCO Energy Partners, Inc. (NEP), in 1996. NEP acquired
PSNH's interest in the New Hampshire retail electric competition pilot
program in late 1996. During 1997, NEP changed its name to Select Energy.
Select Energy is a vehicle for participation in other retail pilot
competition programs and open-access retail electric markets in the
Northeast and other areas of the country as appropriate. In addition,
Select Energy is in the process of developing energy-related products and
services in order to enhance its core electric service and customer
relationships. Select Energy has taken steps to establish strategic
alliances with other companies in various energy-related fields including
fuel supply and management, power quality, energy efficiency, and load
management services.
3. Public Utility Regulation
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935, and
it and its subsidiaries are subject to the provisions of the 1935 Act.
Arrangements among the system companies, outside agencies and other
utilities covering interconnections, interchange of electric power and
sales of utility property are subject to regulation by the Federal Energy
Regulatory Commission (FERC) and/or the SEC. The operating subsidiaries
are subject to further regulation for rates, accounting, and other matters
by the FERC and/or applicable state regulatory commissions.
QUARTERLY REPORT OF NUSCO ENERGY PARTNERS, INC.
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935 and the rules and regulations of the Securities and
Exchange Commission issued thereunder, the undersigned company has
duly caused this report to be signed on its behalf by the undersigned
officer thereunto duly authorized.
NORTHEAST UTILITIES
-----------------------------
(Registered Holding Company)
By: /s/ John J. Roman
-----------------------------
(Signature of Signing Officer)
John J. Roman
-----------------------------
Vice President and Controller
-----------------------------
Date: August 28, 1997
-----------------------------
EXHIBIT 6.B.1.1
NORTHEAST UTILITIES SERVICE COMPANY
SERVICE CONTRACT
AGREEMENT made and entered into as of the 7th day of October, 1996, by and
between NORTHEAST UTILITIES SERVICE COMPANY (hereinafter referred to as Service
Company) and NUSCO ENERGY PARTNERS, INC., (hereinafter referred to as Associate
Company).
WHEREAS, by order in File No. 37-65, the Securities and Exchange
Commission(hereinafter referred to as SEC) approved and authorized, under the
Public Utility Holding Company Act of 1935 (hereinafter referred to as the
Act), the organization and conduct of business of Service Company in accordance
herewith,as a wholly owned subsidiary service company of Northeast Utilities
(hereinafter referred to as Northeast); and
WHEREAS, Service Company is willing to render services as provided herein
to Northeast and its associated subsidiaries (hereinafter collectively referred
to as the System) at cost, determined in accordance with applicable rules and
regulations under the Act; and
WHEREAS, economies, increased efficiencies and other benefits will result
to the System from the performance by Service Company of services as herein
provided:
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, it is agreed as follows:
SECTION 1. AGREEMENT TO FURNISH SERVICES.
Service Company agrees to furnish to Associate Company and other System
companies, upon the terms and conditions herein provided, the services
hereinafter referred to in Section 2 hereof at such times and for such periods
as may be required, and Service Company will, as and to the extent required to
provide such services to the System, keep itself and its personnel available
and competent to render such services to the System so long as it is authorized
so to do by federal and state regulatory agencies having jurisdiction.
For the purpose of providing services as herein provided, Service Company
proposes to establish various departments, one or more of which will participate
in providing particular services hereinafter described. Service Company
reserves to itself the privilege, without amendment hereof or express prior
agreement by Associate Company or other System companies, from time to time to
establish new departments, to subdivide or otherwise reorganize any of the
departments established by it, and to reallocate services among various
departments.
Service Company will also provide for Associate Company and other System
companies as required such other services not referred to in Section 2 hereof as
Service Company may conclude it may furnish with economies and increased
efficiencies to the System or such other services as Associate Company or other
System companies may require and Service Company is competent to perform.
Services will also be furnished to other System companies under agreements
similar in all respects hereto and may also be furnished, in Service Company's
discretion, to others, provided that by so doing the cost of services to
Associate Company or other System companies will not be increased.
In supplying services hereunder, Service Company may arrange for services
of such executives, financial advisers, accountants, attorneys, technical
advisers, engineers and other persons as are required for or pertinent to the
rendition of such services.
SECTION 2. SERVICES TO BE PERFORMED.
Subject to the provisions of Section 1 hereof, Service Company will
provide to Associate Company and other System companies, the following
services:
(A) GENERAL SYSTEM MANAGEMENT: Executive, administrative, managerial,
coordinating and advisory services, particularly with respect to the
formulation and effectuation of policies and programs affecting or relating
to the System as a whole, including financial, accounting, and economic
policies and programs, power supply, public and employee relations,
regulation, contractual arrangements, administrative and other proceedings,
industry-wide activities and like matters.
(B) OTHER FUNCTIONS AND ACTIVITIES: Studying, planning, advise, assistance,
guidance, supervision, direction, administration, maintenance, handling,
performance and operation, as may be required, in connection with the
following functions and activities:
(i) CORPORATE AND SECRETARIAL: Policies and practices relating to the
performance of corporate secretarial functions and activities,
including the preparation and maintenance of official corporate
records, reports, minutes and correspondence in accordance with
assigned responsibilities and duties.
(ii) FINANCIAL PLANNING: Financial structures; financial programs to
raise funds required or to effect savings through refinancing;
relations with commercial banks and negotiation of short-term
borrowings; relationships with investment bankers, analysts,
analyst societies, securities holders, stock holders, stock
exchanges and indenture trustees, transfer agents and registrars;
general treasury, banking and financial matters.
(iii) ACCOUNTING: General accounting, customer accounting and related
records; depreciation, accounting procedures and practices to
improve efficiency; internal auditing, relations with independent
auditors and appearances before and requirements of regulatory
bodies with respect to accounting matters; and financial and
operating reports and other statistical matters and analyses
thereof.
(iv) TAXES: Consolidated and other income tax returns and other
federal, state and municipal tax returns, and all matters related
thereto, including relations with the Internal Revenue Service and
other taxing authorities, the examination and processing of tax
returns, assessments and claims, and developments in federal, state
and municipal taxes.
(v) INSURANCE: Insurance programs and matters, including pension and
other employee benefit plans and programs; and relations with
insurance brokers and agents.
(vi) BUDGETS: Operating, construction and cash budgets, and similar
studies or documents, including estimates and other information
required therefor or related thereto.
(vii) DATA PROCESSING: Computer and other data processing activities.
(viii) BULK POWER SUPPLY: The bulk power supply system from sources of
supply through to bulk substations, to achieve reliable service at
minimum cost, including forecasts of electric loads; power supply
arrangements among System companies; power supply relations with
other utilities; forecasts of gas requirements and the procurement
of gas supplies; design, engineering and scheduling of electric
and gas production and transmission facilities; the design,
engineering and scheduling of major and unusual distribution
facilities; and System electric load dispatching operations and
related matters.
(ix) ENGINEERING RESEARCH AND STANDARDIZATION: Engineering activities
in the fields of research, design, construction and standardization;
technical specifications and standard designs for and procedures and
methods of utilizing materials, equipment and associated services;
technical support and engineering as required in all areas of the
System's operations.
(x) SYSTEM OPERATIONS: Electric and gas operations, including
production, transmission and distribution of electricity and gas;
the construction, operation and maintenance of electric and gas
facilities; and in general all electric and gas construction,
maintenance and operating activities.
(xi) OTHER ADMINISTRATIVE SERVICES: Management-union and all other
employee relation activities, including the definition of major
organizational responsibilities and the translation of those
responsibilities into effective organization structures; employee
welfare and other programs and problems; business methods and
procedures; and transportation activities and matters.
(xii) PURCHASING AND STORES: The purchasing and handling of materials
and supplies, fuel and equipment, including such activities as
buying, traffic, expediting and stock control, and scrap and
salvage sales; major and long-term purchase contracts pertaining
to the foregoing; and contacts with market conditions and principal
suppliers.
(xiii) COMMERCIAL ACTIVITIES: Electric, gas and other sales; customer
service facilities; rate matters and rate structures; and area
development plans and activities.
(xiv) MARKETING AND SALES ACTIVITIES: Marketing, sales and pricing
strategies and plans; market research and support activities;
technical services; new business and product development; trade
ally and strategic alliance services; and marketing and sales
training and support.
(C) Officers and other employees of Service Company will, on request of
Associate Company, serve, without charge other than as herein provided, as
officers or representatives of such Company.
SECTION 3. AGREEMENT TO TAKE AND PAY FOR SERVICES.
Associate Company agrees to take from Service Company such of the services
to be performed by Service Company as may be required and to pay to Service
Company the cost of such services determined as herein provided. It is the
intent of this Agreement that the payment for services rendered by the Service
Company to the System shall cover all the costs of its doing business (less
credits for services to others and any other miscellaneous income items),
including reasonable compensation for necessary capital as permitted by Rule 91
of the SEC under the Act. The methods and procedure for determining the cost
of services performed for Associate Company are set forth in Appendix A hereto.
Bills will be rendered for each calendar month on or before the twentieth
day of the succeeding month and will be payable on presentation and not later
than the last day of that month. Monthly charges may be made in whole or in
part for particular expenses on an estimated basis, subject to adjustment, so
that all charges for services during a calendar year will be made on an actual
basis.
SECTION 4. EFFECTIVE DATE; TERM; AND CANCELLATION.
This Agreement shall become and be effective as of the date hereof and it
shall continue in effect, unless sooner terminated as herein provided, for a
period of one year. It may be renewed from time to time for similar one-year
periods by mutual agreement. This Agreement shall also be subject to
termination and shall terminate, without any action by either of the parties, to
the extent and from the time that performance may conflict with the Act or with
any rule, regulation or order of the SEC adopted before or after the making
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, by their respective officers thereunto duly authorized, all as of
the day and year first above written.
NORTHEAST UTILITIES SERVICE COMPANY
By: /s/ Bernard M. Fox
Its President
Attest:
/s/ Mark A. Joyse
Assistant Secretary
ASSOCIATE COMPANY
By: /s/ Hugh C. MacKenzie
Its President
Attest:
/s/ Mark A. Joyse
Assistant Secretary
APPENDIX A
DESCRIPTION OF METHODS AND PROCEDURE
FOR ALLOCATING COST OF SERVICES
JOB OR WORK ORDERS FOR SERVICE
There shall be job or work orders covering services to be performed for
Associate Company or other System companies. These orders may be either general
or specific. Services of a continuing nature, such as accounting, financial
planning and dispatching, will be covered by general job or work orders;
specific job or work orders will cover such things as issues of securities,
special studies or construction projects. General orders, as well as specific
orders, will specify the nature of the services to be performed thereunder in
sufficient detail that charges therefor may be determined as herein provided and
properly accounted for by the Associate Company under its prescribed Uniform
System of Accounts.
CHARGES FOR SERVICES
General
Charges for services rendered to Associate Company and other System
companies will be made on the bases of benefits conferred and of actual cost
(including reasonable compensation for necessary capital as permitted by Rule 91
of the SEC under the Act), fairly and equitably allocated.
Specific Services
Charges for specific services performed will be made to the appropriate
specific job or work order number assigned to accumulate the charges applicable
to the particular activity. These charges will include both direct and indirect
costs involved in providing the specific services.
General Services
Charges for general services performed will be made to the appropriate
general job or work order number assigned to accumulate the charges applicable
to the particular activity. These charges will include both direct and indirect
costs involved in providing the general services.
NATURE OF CHARGES AND METHOD OF ALLOCATION
Direct Charges
Direct charges consist of those costs which can practicably be recorded
separately and identified not only by job or work order number and department
but also as to source, such as time reports for each employee, vehicle reports,
invoices and other source documents. Time reports will be maintained for each
employee, including officers, in such detail as may be appropriate for such
employee and the nature of the services performed. Employees (other than
stenographic, secretarial, clerical, and other workers engaged in rendering
support services) will record on their time reports hours chargeable to the
appropriate job or work order numbers and the nature of the work performed.
Northeast will be charged with 25% of the costs chargeable to job or work
orders for general services not of an operating or functional nature related
primarily to the System subsidiary companies but primarily of benefit to and
performed for Northeast and the System as a whole. The balance of the charges
to such job or work orders will be allocated to among System subsidiary
companies as provided hereafter under "Charges to System Companies -General
Services."
Indirect Charges or Overhead Expenses
Indirect charges or overhead expenses consist of all costs of the Service
Company, other than direct charges described above. These charges may be
classified into the following two general categories:
1. General Service Company Overheads - These charges include costs which
cannot be identified as applicable to either a particular job or work order
number or department and which must be allocated to the various Service
Company departments on a fair and equitable basis. The following items are
illustrative, and not all-inclusive, of the types of costs which may be
so-allocated to the extent above provided: rents; office supplies and
expenses; depreciation; building operation and maintenance; insurance;
reasonable compensation for necessary capital; general services, such as
stenographic, files, mail, etc., including salaries, employee benefits, and
expenses of related employees; and other general overheads.
These overhead costs will be allocated to each department on the basis of
functional relationship, such as number of personnel, space occupied, use,
etc.
2. Departmental Overheads - These charges include costs which can be
identified as applicable to a particular department but which cannot be
directly associated with a particular job or work order number. These
costs will consist of the following:
(a) Wages and salaries of stenographic, secretarial, clerical and other
workers in the department engaged in rendering support services.
(b) Lost or nonproductive time for vacations, personal time off, sickness,
holidays, etc., of all employees in department.
(c) Payroll-related Federal and State taxes and group benefit plans for
pension, life insurance, hospitalization and medical, etc., of all
employees in department.
(d) Miscellaneous supplies and expense.
(e) General Service Company overheads allocated to the particular
department as set forth in item 1 above.
The indirect charges of a particular department, as outlined in this item
2, will be distributed to the active specific or general job or work orders
for which work is being performed by that department on the same
proportionate basis as the actual direct payroll charges of that
department.
CHARGES TO OTHER THAN SYSTEM COMPANIES
Services performed for other than System companies will be billed and paid
for by them on an appropriate basis. All amounts so billed will be credited to
the appropriate job or work orders before any charges are made therefrom to
System companies.
CHARGES TO SYSTEM COMPANIES
Specific Services
Charges for specific services recorded in the appropriate job or work order
numbers, including overhead items, will be billed to the company or companies
for whom the services are performed.
General Services
Charges for general services recorded in the appropriate job or work order
numbers, including overhead items, will be allocated among System subsidiary
companies on one of the following bases determined on the basis of functional
relationship to be the most fair and equitable:
1. Revenues - The relation of each company's gross operating revenues
(electric, gas or total, as may be appropriate) to the sum of the operating
revenues of all System companies (electric, gas or total, as may be
appropriate) for the preceding calendar year.
2. Electric Peak Load - The relation of each company's annual electric peak
load to the combined electric peak load of all System companies for the
preceding calendar year.
3. Peak Day Sendout - The relation of each company's gas peak day sendout to
the combined gas peak day sendout of all System companies for the preceding
calendar year.
4. Customers Billed - The relation of each company's total customers billed to
the combined total customers billed of all System companies for the
preceding calendar year.
5. Other - Such other basis or bases as experience may show will provide, on a
functional relationship, a more fair and equitable allocation of particular
charges than any of the foregoing.
DEPARTMENT COST CONTROLS
Annual operating budgets, on a departmental basis, will be used and costs
will be controlled independently for each department so as to maintain a
periodic check on the balances, if any, over or underbilled to insure that
services rendered are being billed at cost. Each department will be charged
with all of its expenses, including overhead items allocated to it, and will be
credited with amounts billed from the department for services rendered. The
accounts of each department will be maintained so as to be substantially in
balance at all times. Accordingly, semiannual reviews will be made of balances
to determine to what extent the billings should be adjusted to reflect actual
cost.
BILLING
Bills will be provided Associate Company in sufficient detail so as to
identify the services rendered and permit proper accounting distribution of the
charges under the Associate Company's prescribed Uniform System of Accounts.
Detail on the bill will include: (1) Department; (2) Function or type of
service; (3) Nature of charges, whether direct or indirect (overhead); and (4)
Source of charges, if direct.
EXHIBIT 6.B.1.2
BULK POWER SUPPLY SERVICE AGREEMENT
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
AND
PSNH ENERGY INC.
BULK POWER SUPPLY SERVICE AGREEMENT
This Bulk Power Supply Service Agreement ("Agreement") dated as of May 27, 1996,
is between Public Service Company of New Hampshire and PSNH Energy Inc.
WHEREAS the New Hampshire Public Utilities Commission ("NHPUC"), as directed by
NH RSA 374:26a, has established the Retail Competition Pilot Program ("Pilot"),
to establish an experimental program to examine the implications of retail
competition in the electric utility industry; and
WHEREAS, Public Service Company of New Hampshire ("PSNH" or "Seller") has been
ordered by the NHPUC to establish a marketing affiliate, that will participate
in the Pilot by selling directly to consumers participating in the Pilot; and
WHEREAS, PSNH has established this marketing affiliate as PSNH Energy Inc.
("PSNH Energy" or "Buyer"); and
WHEREAS, in order to secure the power supply required to serve consumers
participating in the Pilot, PSNH Energy has entered into this Agreement with
PSNH.
Now therefore, in consideration of the mutual obligations and understandings set
forth herein, the Parties agree as follows:
I. DEFINITIONS
A. The term "Firm Requirements Service" shall mean the provision of
capacity and associated energy to PSNH Energy to supply PSNH Energy's
system requirements under this Agreement. Such capacity and
associated energy is being made available at the busbar by PSNH from
generating entitlements that PSNH uses to provide firm electric power
service to its retail and wholesale requirements customers.
B. The terms "Commission" or "FERC" shall mean the Federal Energy
Regulatory Commission or such successor agency as may have
jurisdiction over this Agreement.
C. The term "Customer" shall mean a retail entity that is participating
in the Pilot for which Buyer desires to purchase Firm Requirements
Service under this Agreement.
D. The term "Good Utility Practice" shall mean any of the practices,
methods and acts that, in exercise of reasonable judgment in light of
the facts known at the time, could have been expected to accomplish
the desired result at a reasonable cost consistent with reliability,
safety, environmental protection, expedition and the requirements of
any governmental agencies having jurisdiction. Good Utility Practices
are not intended to be limited to any particular set of optimum
practices, methods, or acts to the exclusion of all others, but rather
are intended to include a range of possible practices, methods, or
acts consistent with the above stated criteria.
E. The term "NEPEX" shall mean the New England Power Exchange, the NEPOOL
operations center, that as directed by the NEPOOL Management
Committee, centrally dispatches electric generating and transmission
facilities controlled by the NEPOOL participants to achieve the
reliability and economic objectives of NEPOOL.
F. The term "NEPOOL" shall mean the New England Power Pool or such
successor organization that the Parties may have membership in.
G. The term "NEPOOL Agreement" shall mean the New England Power Pool
Agreement, dated September 1, 1971, as amended from time to time.
H. The term "Party" or "Parties" shall mean PSNH and/or PSNH Energy and
its assigns.
Whenever any capitalized term is used in this Agreement and is not
otherwise defined, it shall have the meaning specified therefor in the
NEPOOL Agreement in a manner not inconsistent with the provisions of this
Agreement.
II. TERM
This Agreement shall be effective upon execution and subject to the
required regulatory approvals as set forth in Section 10. This Agreement
shall provide for services to be rendered by Seller to Buyer beginning at
0001 hours on the later of May 28, 1996 or the day the Pilot begins
("Commencement Date"), and ending at 2400 hours on the later of May 27,
1998 or two years from the Commencement Date ("Termination Date").
III. CHARACTER OF FIRM REQUIREMENTS SERVICE AND PURCHASE AMOUNT
A. Character of Service
Firm Requirements Service provided hereunder shall be supplied in the
form of three-phase, sixty-hertz alternating current, in accordance
with Good Utility Practice.
The provision of Firm Requirements Service to PSNH Energy hereunder
will be of the same priority of service as PSNH provides its retail
native load customers. Such service will be interrupted by PSNH only
in the event of an emergency situation on its or NEPOOL's systems,
such that voltage reduction is in place or imminent within NEPOOL
and/or load curtailment is in place or imminent within NEPOOL and/or
if other operating problems are in place or imminent on the NEPOOL
system and are deemed by NEPEX to threaten the security of the systems
based on Good Utility Practice. In the event of said interruption,
such service will be restored as promptly as practicable in accordance
with Good Utility Practice.
Firm Requirements Service provided hereunder by PSNH to PSNH Energy
shall be purchased by PSNH Energy to meet the electric load
requirements of its Customers as a result of its participation in the
Pilot.
Seller shall deliver Firm Requirements Service sold hereunder to the
Delivery Point(s) specified by Buyer. Buyer shall assume
responsibility beyond the Delivery Point.
B. Amount of Requirements Service
In order to determine the amount of Firm Requirements Service, Buyer
shall provide, in writing, the following information to Seller at
least five (5) days prior to the commencement of such service
hereunder and monthly thereafter.
(a) The commencement and termination dates associated with Firm
Requirements Service to each Customer.
(b) All Delivery Points.
(c) Any additional information reasonably required by Seller in order
to economically meet the supply requirements of each Customer,
including appropriate load profile or hourly metering access
data pertaining to Customer(s) loads, loss level and consumption
history.
IV. CAPACITY AND ENERGY CHARGES
For each month or portion thereof during the term of this Agreement, PSNH
Energy shall make payment to PSNH in an amount equal to the sum of the
monthly charges described below:
A. Capacity Charge for Firm Requirements Service
PSNH will charge PSNH Energy each month for capacity on PSNH's system
associated with Firm Requirements Service through its Capacity Charge
Rate. This charge will be an amount equal to the product of: (a) the
appropriate Capacity Charge Rate as listed below and (b) the amount of
Firm Requirements Service taken by PSNH Energy during such month
(expressed in kilowatts) determined by PSNH Energy's highest coinci-
dent system peak load over said month for all PSNH Energy Customers
served.
Time Frame Capacity Charge Rate
Commencement Date - May 27, 1997 $ 2.23/kW-month
May 28, 1997 - Termination Date $ 3.14/kW-month
B. Energy Charge For Firm Requirements Service
PSNH will charge PSNH Energy each month for energy associated with the
Firm Requirements Service in an amount equal to the product of: (a)
the applicable Energy Charge Rate shown below and (b) the total amount
of energy delivered to PSNH Energy for the Applicable Hours during
such month for Firm Requirements Service (expressed in kilowatt-
hours).
Energy
Charge
Description Rate Applicable Hours
Peak Energy Cost 2.4c/kWh 0701-2300, Monday-Friday
Weekend Energy Cost 2.1c/kWh 0701-2300, Saturday and Sunday
Nighttime Energy Cost 1.8c/kWh 0001-0700, 2301-2400,
Monday-Sunday
V. METERING
Metering shall be in accordance with the requirements stated in NEPOOL
Criteria, Rules and Standards No. 13, NEPEX Metering and Telemetering
Criteria where applicable. The Pilot Guidelines specify the use of
alternative metering arrangements in order to avoid the expense of hourly
metering where such metering does not currently exist and NEPOOL has waived
its Criteria, Rules and Standards to accommodate the Pilot by agreeing to
accept load profiles as proxies for load by the participating New Hampshire
utilities. Seller shall use load profiles where appropriate in lieu of
actual hourly load data for Customers in accordance with NEPOOL rules.
All meter readings shall be adjusted to reflect losses between the Delivery
Point(s), as specified by Buyer, and Seller's system. Such adjustments
shall be in accordance with NEPOOL procedures and the applicable
transmission tariffs under which Firm Requirements service is provided to
Buyer for resale to its Customers.
VI. TAXES, FEES AND ASSESSMENTS
It is expressly understood that if any governmental authority requires the
payment of any fee or assessment not provided for elsewhere in this
Agreement (including, but not limited to, fees and assessments required by
the Commission pursuant to 18 CFR Part 381 and Order No. 472 issued by the
Commission on May 27, 1987), or a sales tax, gross revenue tax, energy tax
or any other form of tax made or imposed with respect to payments made to
PSNH for services rendered under this Agreement, the obligation to make
payment for such fee, assessment, or tax shall be borne by PSNH Energy in
proportion to the services rendered under this Agreement. Within twenty-
five (25) days of the rendering of a bill for such tax, fee, or assessment,
PSNH Energy shall pay to PSNH any such amount not previously billed to PSNH
Energy, together with any applicable interest on any deficiency assessment
made by the governmental authority, together with any further tax on such
payment. Having made such payment, PSNH Energy shall not be subject to any
additional general or specific allocation of such charges or taxes paid by
PSNH. PSNH shall be required to make a Section 205 filing with the FERC
prior to charging PSNH Energy for recovery of any such costs and PSNH
Energy shall retain all rights to challenge such filing.
If PSNH Energy or PSNH contest any tax, and thereafter such tax is
determined by an appropriate governmental or judicial authority to have
been imposed illegally, or is settled at less than the amount initially
imposed, PSNH Energy shall receive a refund of its share of any such excess
taxes paid by it.
VII. BILLING AND PAYMENT
Buyer shall pay to Seller all charges billed by the Seller pursuant to this
Agreement. Bills shall be rendered as soon as practicable after the end of
each calendar month. Bills will incorporate such information as may be
reasonably necessary to determine the payments due for such month.
Pending the availability of actual data, billings hereunder shall be based
upon estimates, made by Seller, subject to true-up when actual data are
known.
Each bill shall be subject to adjustment for any errors in arithmetic,
computation, estimating or otherwise. Any such billing adjustments shall
be made as promptly as practicable, but in no event later than six (6)
months after the Due Date, as defined below.
All payments shown to be due on such bill, subject to subsequent adjust-
ments as heretofore provided, shall be due and payable not later than the
Due Date, defined as twenty (20) days after date of invoice (the period of
20 days after date of invoice is intended to allow 5 days for invoice
delivery and 15 days after receipt of invoice for payment). Any amount
remaining unpaid after such Due Date shall bear interest from the Due Date
to the date of payment at the prevailing prime rate at the main office of
Seller's primary lending institution.
Seller may make adjustments to an initial bill within six (6) months after
the date of the bill in order to reflect differences in charges resulting
from its receipt of more current data on billing determinants. Buyer may
dispute such adjustment in accordance with this Section. Buyer shall also
make additional adjustments to bills after said six (6) month period to the
extent such adjustments are required based upon final resolution of any
claim, action, or proceeding formally initiated by or noticed to Seller
within the time period stated in section. Such additional adjustments will
be made within thirty (30) days of the date of a final resolution of any
such claim, action, or proceeding.
If Buyer, in good faith, disputes the amount of any bill, it shall itemize
the basis for its dispute in a written notice to Seller given on or before
the Due Date. Notwithstanding the above, Buyer is obligated to pay all
billed amounts by the Due Date. Upon final resolution of the dispute, if
refunds are due to Buyer, Seller shall make such refunds, together with
interest from the date said disputed amounts were paid to the Seller.
If payments for service rendered under this Agreement are not made in
accordance with the provisions of this Section, Seller shall notify Buyer
in writing of such default. Buyer shall have thirty (30) days from the
date of such written notice to cure said default by paying the full amount
due. If, at the end of the thirty (30) day period, payment has not been
made, Seller shall have the right to take such actions as may be
permissible under the Federal Power Act and the regulations of the
Commission and suspend service and/or to file with the Commission a notice
of cancellation of the Agreement pursuant to Section 35.15 of the
Commission's regulations. In addition to the remedies provided by this
Agreement, Seller shall have the right to take such other actions as may be
permissible by law.
VIII.AUDITS OF ACCOUNTS AND RECORDS
Within one (1) year following a calendar year, Seller and Buyer shall have
the right to audit each other's accounts and records at the offices where
such accounts and records are maintained during normal business hours;
provided that appropriate notice shall have been given prior to any audit
and provided that the audit shall be limited to those portions of such
accounts and records that relate to this Agreement for said calendar year.
The costs of the audit shall be borne by the party requesting the audit.
IX. AMENDMENTS AND RATE CHANGES
Nothing contained in this Agreement shall be construed as affecting, in any
way, any of Seller's rights unilaterally to make filings with the FERC for
a change in rates, charges, classification, terms and/or conditions of
service under this Agreement (including the schedules to this Agreement) or
any rule or regulation related thereto, under Section 205 or any other
applicable provisions of the Federal Power Act (or any successor statute)
and pursuant to the Commission's rules and regulations promulgated under
any of the above.
APPLICABLE LAWS, REGULATIONS, AND ORDERS OF GOVERNMENTAL AUTHORITIES
This Agreement is made subject to present or future local, state, or
federal laws and to present or future regulations or orders properly issued
by local, state, or federal authorities having jurisdiction. All rights
and obligations of the parties pursuant to this Agreement are subject to
the condition that any requisite approvals by said governmental authorities
shall have been secured and that all other requisite governmental and
regulatory approvals of the execution, delivery, and the performance of
this Agreement shall have been secured. Each party agrees to use
reasonable efforts to secure all such approvals, grants, and permits as
promptly as reasonably practicable and to maintain such approvals, grants
and permits to the extent necessary to the performance of their respective
rights and obligations under this Agreement.
This Agreement shall be interpreted and enforced in accordance with the
Federal Power Act and the rules and regulations of the Commission there-
under.
RESOLUTION OF DISPUTES
Any dispute between the Seller and Buyer involving service under this
Agreement (excluding applications for rate changes or other changes to this
Agreement, which shall be presented directly to FERC) shall be referred to
a senior representative of Seller designated by Seller and a senior
representative of the affected Buyer designated by the affected Buyer for
resolution on an informal basis as promptly as practicable. In the event
the designated senior representatives are unable to resolve the dispute
within thirty (30) days, or such other period as the parties may jointly
agree upon, such dispute may be submitted to arbitration and resolved in
accordance with the arbitration procedure set forth herein if Seller and
the Buyer jointly agree. If they do not agree, such dispute shall be
presented promptly to FERC, but in no event more than sixty (60) days after
rejecting arbitration.
The arbitration shall be conducted before a single neutral arbitrator
appointed by the parties. If the parties fail to agree upon a single
arbitrator within ten (10) days of the referral of the dispute to arbitra-
tion, Seller and the Buyer shall each choose one arbitrator, who shall sit
on a three-member arbitration panel. The two arbitrators so chosen shall
within twenty (20) days select a third arbitrator to act as chairman of the
arbitration panel. In either case, the arbitrators shall be knowledgeable
in electric utility matters, including electricity transmission and bulk
power issues, and shall not have any current or past substantial business
or financial relationships with any party to the arbitration. The
arbitrator(s) shall afford each of the parties an opportunity to be heard
and, except as otherwise provided herein, shall generally conduct the
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. There shall be no formal discovery
conducted in connection with the arbitration, however, the parties shall
exchange witness lists and copies of any exhibits that they intend to
utilize in their direct presentations at any hearing before the
arbitrator(s) at least ten (10) days prior to such hearing, along with any
other information or documents specifically requested by the arbitrator(s)
prior to the hearing. Unless otherwise agreed, the arbitrator(s) shall
render a decision within ninety (90) days of his, her, or their appointment
and shall notify the parties in writing of such decision and the reasons
therefor, and shall make an award apportioning the payment of the costs and
expenses of arbitration among the parties, provided, however, that each
party shall bear the costs and expenses of its own attorneys, expert
witnesses and consultants. The arbitrator(s) shall be authorized only to
interpret and apply the provisions of this Agreement and shall have no
power to modify or change any of the above in any manner. The decision of
the arbitrator(s) shall be final and binding upon the parties, and judgment
on the award may be entered in any court having jurisdiction. The decision
of the arbitrator(s) may be appealed solely on the grounds that the conduct
of the arbitrator(s), or the decision itself, violated the standards set
forth in the Federal Arbitration Act and/or the Administrative Dispute
Resolution Act.
X. AFTER TERMINATION OR CANCELLATION
The applicable provisions of this Agreement and any Service Agreement
entered into under this Agreement shall continue in effect after termi-
nation or cancellation thereof to the extent necessary to provide for final
billing, billing adjustments and payments.
XI. LIMITATIONS ON LIABILITY AND INDEMNIFICATION
Each party will endeavor to furnish reliable electric service under this
Agreement, but it does not guarantee that service will not be curtailed or
interrupted for reasons beyond its control and such party, its trustees,
affiliated companies, directors, officers, employees, managers, board
members, and agents shall not be liable for any claim arising from or
claimed to have arisen from any interruption or reduction of service under
this Agreement due to: (a) Force Majeure, (b) any cause that such party
could not reasonably have foreseen and made provision against using good
utility practice, (c) any operating decisions, which, in such party's or
NEPEX's reasonable judgment, are necessary to protect generation or
transmission facilities, or (d) necessary or routine maintenance, repairs,
replacements, or installations of equipment, or the investigation and
inspection of such equipment.
Except for claims arising from disruptions in service which are provided
for in the above paragraph, each party (the indemnifying party) agrees to
indemnify and hold the other party and its affiliated companies, trustees,
directors, officers, employees, managers, board members, and agents
harmless from and against any and all claims, damages, costs (including
attorneys' fees), fines, penalties, liabilities, actions or proceedings in
tort, contract, or otherwise, resulting from claims of third parties
arising or claimed to have arisen, from the acts or omissions of such
indemnifying party, in connection with this Agreement.
The parties hereby waive and release each other, as well as each party's
affiliated companies, trustees, directors, board members, officers,
managers, employees and agents, from any liability, claim or action arising
from damage to property of the parties due to the performance of the
parties hereunder, except where such damage is the result of gross
negligence or willful misconduct.
XII. FORCE MAJEURE
As used in this Agreement, "Force Majeure" means any cause beyond the
reasonable control of, and without the fault or negligence of, the party
claiming Force Majeure. It shall include, without limitation, sabotage,
strikes or other labor difficulties, soil conditions, riots or civil
disturbance, acts of God, act of public enemy, drought, earthquake, flood,
explosion, fire, lightning, landslide, or similarly cataclysmic occurrence,
or appropriation or diversion of electricity by sale or order of any
governmental authority having jurisdiction thereof. Economic hardship of
either party shall not constitute a Force Majeure under this Agreement.
If either party is rendered wholly or partly unable to perform its obli-
gations thereunder because of Force Majeure as defined above, that party
shall be excused from whatever performance is affected by the Force Majeure
to the extent so affected, provided that:
A. The nonperforming party promptly, but in no case longer than five
working days after the occurrence of the Force Majeure, gives the
other party written notice describing the particulars of the
occurrence.
B. The suspension of performance shall be of no greater scope and of no
longer duration than is reasonably required by the Force Majeure.
C. The nonperforming party uses Due Diligence to remedy its inability to
perform.
XIII.ASSIGNMENTS
This Agreement shall be binding upon and shall inure to the benefit of, and
may be performed by, the successor and assigns of the parties; provided,
however, that no assignment, pledge, or other transfer of this Agreement by
either party shall operate to release the assignor, pledgor, or transferor
from any of its obligations under the Agreement unless: (i) the other
party to the Agreement consents, in writing, to such assignment, pledge, or
other transfer and expressly releases the assignor, pledgor, or transferor
from any of its obligations hereunder; (2) the assignment, pledge, or other
transfer is to another corporation in the same holding company system as
the assignor, pledgor, or transferor upon the express assumption by the
assignee, pledgee, or transferee of the obligations of the assignor,
pledgor, or transferor; provided that such assignee, pledgee, or transferee
is as financially viable as the assignor, pledgor, or transferor; or
(3) such transfer is incident to a merger or consolidation with, or
transfer of all, or substantially all, of the assets of the transferor to
another person, business entity, or political subdivision or public
corporation created under the laws of the transferor which shall as part of
such succession, assume all of the obligations of the assignor, pledgor, or
transferor under the Agreement.
Notwithstanding the preceding subsection or any other provision contained
in this Agreement, neither party shall have the right to assign, pledge or
otherwise transfer its rights under the Agreement to any other entity
without the permission of the other party, which permission shall not be
unreasonably withheld.
In the event that any party assigns, pledges, or otherwise transfers its
interest under the Agreement pursuant to this section, the other party
shall be held harmless from any administrative costs incident to
preparation or filing of such assignment, pledge, or transfer.
XIV. MISCELLANEOUS
A. Each party to this Agreement shall prepare, execute and deliver to the
other party any documents reasonably required to implement any
provision of this Agreement.
B. Any number of counterparts of this Agreement may be executed and each
shall have the same force and effect as the original.
C. Failure of any party to this Agreement to enforce any provision
thereof, or to require performance of the other party of any of the
provisions thereof, shall not be construed as a waiver of such
provisions or affect the validity of such agreement or any part
thereof, or the right of either party to thereafter enforce each and
every provision.
D. The headings of the sections and subsections set out in this Agreement
are intended for convenience of reference only and shall not be deemed
to be controlling.
E. Notices by Seller or the Buyer shall be in writing, mailed or
delivered to the respective address set forth below.
NUSCO: Vice President, Wholesale Marketing
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
PSNH Energy: President,
PSNH Energy, Inc.
1000 Elm Street
P.O. Box 330
Manchester, NH 03101
IN WITNESS WHEREOF, PSNH and PSNH Energy have caused this Agreement to be
signed by their respective duly authorized representatives as of the date first
above written.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
By: /s/ Frank P. Sabatino
PSNH ENERGY, INC.
By: /s/ John T. Muro
EXHIBIT 6.B.1.3
Public Service Company of New Hampshire
Retail Competition Pilot Program Service Agreement
PSNH Energy
Competitive Power Supplier Name
1000 Elm Street, P. O. Box 330
Street
Manchester NH 03105-0330
City State Zip Code
William P. McKinnon (603)634-3222
Contact Name Telephone
Billing Address:
Same
Customer Name
Street
City State Zip Code
Attention
Check the services desired: X Customer Service (Billing,
Credit/Collections, Service-related
telephone calls)
X Inbound Power Supply Customer Calls
X Special Metering
X Special Reporting
TERMS AND CONDITIONS OF SALE
1. These Terms and Conditions of Sale apply to the purchase of various
services by the competitive power supplier ("Supplier") named above from PSNH
during the New Hampshire Retail Competition Pilot Program. The services,
along with their price and any special terms and conditions, are described in
more detail on the next page.
2. DURATION OF SERVICES. The services are to be provided for the duration of
the Pilot Program, commencing on initiation of PILOT, 1996, or until
otherwise agreed.
3. DISCLAIMER OF WARRANTY. All services are provided "As-Is". No warranty
of any kind, either express or implied, shall be provided. PSNH DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ANY
WARRANTIES ARISING FROM COURSE OF TRADE OR DEALING.
4. PAYMENT. Services shall be billed monthly and payment due within 30 days
following the invoice date. To the extent practicable, if PSNH performs
billing services for Supplier, PSNH may withhold payment for services under
this Contract from collected revenues otherwise due to Supplier. No sales
taxes are included in the offered prices. The Supplier shall be responsible
for the payment of any required sales or similar taxes imposed by any state.
5. LIMITATION OF LIABILITY. Neither PSNH, its agents, suppliers, nor its or
their employees shall be liable to Supplier in contract, tort (including
negligence and strict liability) or otherwise for loss of use of equipment or
facilities, lost profits or revenues, expenses involving cost of capital, cost
of repair or cleanup, additional costs involved in construction or operation
of facilities, claims of any customer of Supplier, or any special, incidental,
indirect, or consequential loss or damage whatsoever. Supplier waives and
shall require its insurers to waive all claims against PSNH, its agents,
suppliers, and its and their employees whether arising out of contract, tort
(including negligence and strict liability), or otherwise for any personal
injury (including death) or damage to or loss of property, no matter how
caused and regardless of fault. In any event, the total cumulative liability
of PSNH, its agents, suppliers, and its and their employees whether arising
out of contract, tort (including negligence and strict liability), or
otherwise, in connection with service sold pursuant to this Contract, shall be
limited to the lesser of the price paid by Supplier or $10,000.
6. INDEMNIFICATION. Supplier agrees to indemnify, defend, and hold PSNH
harmless from and against all liability arising from PSNH's performance
hereunder, or Supplier's performance or non-performance of its agreements with
its customers, except to the extent such liability arises from PSNH's breach
of this Contract or its negligence in performing services hereunder.
7. APPLICABLE LAW. This Contract shall be interpreted in all respects under
the laws of the State of New Hampshire, and all litigation concerning this
Contract shall be brought in a court of competent jurisdiction in the State of
New Hampshire. Performance of services hereunder shall be subject to the
orders and regulations of the New Hampshire Public Utilities Commission as
applicable.
8. FORCE MAJEURE. Neither party shall be liable to the other as a result of
delays in or failures of performance to the extent such delay or failure is
caused by occurrences beyond their reasonable control. Supplier acknowledges
and agrees that PSNH may delay the performance of services for Supplier
hereunder to the extent PSNH resources, in PSNH's sole discretion, are
insufficient to support the performance of such services' in order to allow
PSNH to meet its public utility obligations, and that PSNH shall have no
obligation to add personnel or equipment in order to perform the services.
9. COMPLETE AGREEMENT. This Contract shall constitute the complete agreement
between the parties. All prior communications, whether oral or written, shall
be superseded by this Contract and shall not bind the parties. No change to
this Contract shall be binding upon the parties unless made in writing and
signed by both parties.
SUPPLIER PSNH
By /s/ William P. McKinnon By /s/ Gary A. Long
Its Manager Its VP - Customer Service &
Economic Development
Date: 6/12/96
Special Terms and Conditions
Customer Service Support
PSNH will provide Supplier with billing, credit/collections, and customer
service telephone call support during the term of the Pilot Program. These
services will be performed in substantially the same manner that PSNH performs
these functions for its own customers pursuant to its customer service
policies.
For customers within PSNH's service territory, billing support means reading
the customer's electric meter on a billing cycle basis and incorporating
Supplier's charges on PSNH customer bills. For customers outside the PSNH
service territory, billing support means obtaining metering data from the
customer's host utility and preparing and mailing a bill showing the
customer's electricity usage each month. PSNH will not provide billing
services that require more complexity than a monthly charge, a demand charge,
and a per-kilowatthour charge. Billing services will go into effect not less
than 30 days from the effective date of this agreement. At PSNH option,
billing services may begin in less than 30 days.
Credit/collections support means collecting and processing payments from
customers and remitting the energy portion of such payments net of the
credit/collections charge (as defined below) to Supplier in accordance with
the terms of this agreement. Collection activities will be performed in
accordance with Chapter PUC1200 Uniform Administration of Utility Customer
Relations. Payments to Supplier are subject to refund to PSNH to the extent
PSNH is not, after reasonable efforts, able to collect amounts due from
Supplier's customers. Supplier agrees that in the event a payment is received
from a customer that has an outstanding balance with PSNH, such payment will
be applied to reduce or eliminate such outstanding balance before being
applied to pay for energy supplied by Supplier. All payments from customers
by check must be payable to PSNH, or another entity, at PSNH option.
Supplier agrees that it will provide PSNH, on a monthly schedule to be
established by PSNH, with data by customer sufficient to allow PSNH to include
amounts owing to Supplier on the PSNH bill. PSNH will aggregate the amounts
billed to Supplier's customers each month and remit such amounts to Supplier
by check or wire transfer, at Supplier's option, on the twentieth day of the
following month, net of all fees due to PSNH from Supplier under this Contract
for services during such month. Payments to Supplier are subject to refund in
the event the customer does not pay PSNH. With the monthly check or wire
transfer verification, PSNH will provide Supplier a written report showing in
reasonable detail all energy charges and all PSNH charges to Supplier.
Customer service telephone support means responding to customer inquiries
about electricity service and bills. PSNH will provide customer service
telephone support over telephone lines provided by Supplier at Supplier's
expense, or over PSNH's own customer services telephone lines, at Supplier's
option and expense.
Inbound Power Supply Customer Calls
Inbound power supply customer call support means providing Supplier, over
dedicated telephone numbers to be provided by Supplier at Supplier's expense,
with reasonable telephone customer support services related to incoming calls
regarding Supplier's offering in the Pilot. As part of this service, PSNH
will not compare different Pilot suppliers or their offerings, and reserves
the right to reject requests from Supplier for telephone support that PSNH
deems objectionable.
Special Metering Support
Special metering means goods and services required to accommodate a Supplier's
special pricing programs for customer supply during the Pilot. All special
metering will be provided pursuant to terms and conditions to be negotiated.
Special Reporting Support
Special reporting means any custom reports desired by Supplier. Supplier will
pay development costs as well as the costs of preparing each report including
data analysis. PSNH reserves the right to refuse to produce a report so long
as the same decision applies to all competitive power suppliers in the Pilot.
PRICES
These prices have been determined based on PSNH's best estimate of the cost of
performing similar services for its own customers. PSNH reserves the right to
adjust these prices from time to time, on 30 days' prior written notice to
Supplier, to reflect changes in these estimates.
$0.90 per customer per month for billing services
$0.002 per dollar billed for credit/collections services
$3.95 per telephone call from Supplier's customer if the call deals
exclusively with Supplier electricity supply issues
$2.00 per telephone call from Supplier's customer if the call deals in part
with Supplier electricity supply issues
In addition, the following will be billed at PSNH's "cost":
- where billing customers outside of PSNH's service territory, the costs of
obtaining meter readings and other billing information from the
customers' host utility, plus postage and paper costs
- the costs of special metering
- the costs of special reporting
"Cost", as used above, includes PSNH's actual cost plus overheads.
