SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 9, 1998
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Commission File Number 33-43508
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NORTH ATLANTIC ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
NEW HAMPSHIRE 06-1339460
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 ELM STREET, MANCHESTER, NEW HAMPSHIRE 03105
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(Address of principal executive officers) (Zip Code)
(603) 669-4000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events
1. Electric Utility Restructuring - New Hampshire
a. Regulatory Proceedings
On March 20, 1998, the New Hampshire Public Utilities Commission (NHPUC)
issued an order on rehearing (Rehearing Order) of its February 28, 1997
orders on restructuring the electric industry in New Hampshire (1997 Orders).
The Rehearing Order states that Public Service Company of New Hampshire
(PSNH), a wholly owned subsidiary of Northeast Utilities (NU), has
demonstrated that severe financial harm would be caused by the 1997 Orders'
regional average ratemaking methodology. Thus, the NHPUC stated that PSNH's
interim stranded cost distribution charges will be determined in an order to
be issued in the future using a cost-based method to allow PSNH to continue
to use accounting treatment under Statement of Financial Accounting Standards
No. 71.
The Rehearing Order also made the following significant changes to the
1997 Orders:
(i) it removed the prohibition on energy supply affiliates of
distribution companies doing business within the distribution company's
service territory, and provided that such affiliates may now use corporate
tradenames, logos and trademarks; and, affiliated energy suppliers and
distribution companies will be subject to standards of conduct that will
initially be based upon California's standards;
(ii) it permits transition service to be offered by the distribution
company to residential customers for at least one year; this service will be
obtained via a bidding process; and, standard offer service priced below
market that may restrict competition is disfavored;
(iii) conservation and load management programs will continue to be
provided by distribution companies for the near term; and
(iv) transmission owning utilities will not be ordered to file retail
transmission tariffs involuntarily with the Federal Energy Regulatory
Commission (FERC); instead, the pro forma open access tariffs on file with
FERC will be the basis of retail transmission service, and the NHPUC will
seek waivers from FERC of any terms and conditions deemed inapplicable to
retail users.
PSNH and NU obtained a stay of the 1997 Orders in a federal lawsuit
discussed more fully below on various grounds, including certain issues that
are not addressed by the Rehearing Order.
Compliance filings are required for all franchised utilities operating
in New Hampshire except PSNH by May 1, 1998 in order to meet the statutory
deadline for competition of July 1, 1998. PSNH will not be required to make
a compliance filing on May 1 under the terms of the temporary restraining
order issued by the federal court referred to above. Parties have 30 days
from the date of the Rehearing Order to file an appeal petition with the New
Hampshire Supreme Court. Specific changes concerning interim stranded cost
levels for PSNH are not expected to be determined until after a decision is
issued in the New Hampshire Supreme Court proceeding, discussed below.
b. Court Proceedings
On March 9, 1998, the U.S. Court of Appeals for the First Circuit denied
requests for rehearing of its February 3, 1998 decision, which upheld the
U.S. District Court's earlier ruling excluding certain intervenors from NU's
and PSNH's lawsuit challenging the NHPUC's 1997 Orders. The case has been
remanded to the District Court for further proceedings.
On April 1, 1998, the New Hampshire Supreme Court held a pre-hearing
conference and issued an order discussing the NHPUC's transfer of two
questions for the Supreme Court's determination. The two questions concern
the rate agreement between NU, PSNH and the state of New Hampshire entered
into in 1989 in connection with NU's reorganization plan to resolve PSNH's
bankruptcy (Rate Agreement). During the course of the pre-hearing conference,
the parties, including PSNH, agreed that the questions that had previously
been presented would be amended to read as follows: (1) does PSNH have any
rights under the Rate Agreement and/or New Hampshire RSA chapter 362, which
must be recognized by the NHPUC in establishing stranded cost charges under
New Hampshire RSA chapter 374-F, and (2) if the answer to question #1 is
"yes," may the NHPUC establish stranded cost charges providing for less than
full recovery of the assets referred to in the Rate Agreement? Based on the
procedural schedule, a decision in this proceeding could be issued in June
1998.
For more information regarding these matters, see "Item 1.
Business--Electric Utility Restructuring" and "--Rates" in NU's 1997 Form
10-K.
2. New Hampshire Retail Rates
On March 13, 1998, PSNH filed testimony and exhibits seeking a 3.7
percent net increase in rates in the June-December 1998 period in connection
with its comprehensive fuel and purchased power adjustment clause
proceedings. Hearings are scheduled for mid-May.
For more information regarding this matter, see "Item 1.
Business--Rates--New Hampshire Retail Rates" in NU's 1997 Form 10-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTH ATLANTIC ENERGY CORPORATION
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Registrant
Date April 6, 1998 By /s/John B. Keane
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John B. Keane
Vice President and Treasurer
