SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Earliest Event Reported: July 3, 1995
THE NARRAGANSETT ELECTRIC COMPANY
(exact name of registrant as specified in charter)
Rhode Island 1-7471 05-0187805
(state or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation)
280 Melrose Street, Providence, Rhode Island 02907
(Address of principal executive offices)
(401) 784-7000
(Registrant's telephone number, including area code)
Item 5. Other Events
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As previously reported in the New England Electric System
(NEES) 1994 Annual Report, the three states served by retail
subsidiaries of NEES (the NEES Companies), including the
Narragansett Electric Company (Narragansett Electric), have been
considering various proposals for allowing electric customers
greater choice over their electricity supplier. The
Massachusetts Department of Public Utilities (MDPU) has been
holding hearings on the regulation and structure of the electric
utility industry. The Rhode Island Public Utilities Commission
(RIPUC) convened a task force of utilities, commercial and
industrial customers, and other interested parties to prepare a
report on restructuring the industry. In these two proceedings,
Massachusetts Electric Company and Narragansett Electric, the
NEES Companies operating in Massachusetts and Rhode Island
respectively, have filed with the respective commissions a set
of interdependent principles for industry restructuring. These
principles, which were agreed to by groups representing
environmental, non-utility generation, utilities, and large and
small customer interests, include provisions for increased
customer choice while allowing utilities to recover the cost of
their past commitments, as well as provisions for protecting
residential customers, encouraging renewable resources and energy
conservation, and honoring contracts with independent power
producers. The parties agreeing to the principles suggested to
the MDPU and RIPUC that the parties be permitted a six month
period for discussions and negotiations on a more detailed plan.
The MDPU and RIPUC are expected to issue separate decisions this
summer.
On July 3, 1995, the Governor of Rhode Island vetoed two
bills designed to provide certain customers in industrial parks
with the right to buy power in the open market, rather than
through the local electric utility. The vetoes are subject to
override by the Rhode Island Legislature. Because Narragansett
Electric believed that the proposed legislation would result in
piecemeal deregulation that would not be fair to customers or
shareholders and would circumvent the comprehensive proceedings
mentioned above, Narragansett Electric urged the Governor to
exercise his veto. Narragansett Electric committed that, if the
measures were not enacted into law, Narragansett Electric would
provide a two year rate credit to manufacturing customers at an
expected cost to Narragansett Electric shareholders of
approximately $2 million per year. (Narragansett Electric's
current rate filing proposed a $3 million discount for
manufacturers, but was conditioned on manufacturers signing
service extension discount agreements and would have been
recoverable from other customers.) In addition, Narragansett
Electric committed to submit, by July 1, 1996, a specific and
detailed proposal to the RIPUC addressing the issues associated
with providing open access to Narragansett Electric's
distribution system for its large commercial and industrial
customers. Among other things, that filing would address the
proper means for recovering past costs incurred to serve exiting
customers through a compensatory access charge. If the charges
are approved by the RIPUC, the appropriate access tariffs would
then be filed with the Federal Energy Regulatory Commission.
Also, as previously reported, the New Hampshire Public
Utilities Commission (NHPUC) is considering the proposal of a new
company (Freedom Electric Company) to sell electricity at retail
to large customers of another utility and the New Hampshire
Legislature has been considering several bills concerning
electric industry restructuring and competition. On June 6,
1995, the NHPUC issued an order in the Freedom Electric docket
addressing preliminary issues. The NHPUC found, in a split
decision, that it does not believe franchise territories in New
Hampshire are exclusive as a matter of law. The order also
stated that it did not believe federal law precluded the NHPUC
from authorizing retail wheeling. However, the order makes clear
that Freedom Electric must obtain additional regulatory approvals
at the state and federal level before it could operate as a
public utility in the franchise territory of another utility.
Granite State Electric Company, the NEES Company serving New
Hampshire customers, has intervened in the proceeding. Granite
State is filing a motion for rehearing on these matters.
In addition, legislation effective January 1, 1996 was
signed into law in June 1995 in New Hampshire which instructs the
NHPUC to establish a retail competition pilot program open to all
classes of customers. The NHPUC will first have to determine
that the pilot program would be fair, lawful, and in the public
good. The legislation also establishes a legislative committee
on retail wheeling and restructuring. The committee is to report
its findings by November 1, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this Current Report on
Form 8-K to be signed on its behalf by the undersigned thereunto
duly authorized.
THE NARRAGANSETT ELECTRIC COMPANY
s/Alfred D. Houston
By ________________________________
Alfred D. Houston
Vice President and Treasurer
Date: July 5, 1995