NEW ENGLAND POWER COMPANY
PRIMARY SERVICE FOR RESALE
--------------------------
AMENDMENT OF SERVICE AGREEMENT
------------------------------
Dated: October 30, 1995
Parties: NEW ENGLAND POWER COMPANY
a Massachusetts corporation (the "Company")
25 Research Drive
Westboro, Massachusetts 01582
and
THE NARRAGANSETT ELECTRIC COMPANY
a Rhode Island corporation (the "Customer")
280 Melrose St.
Providence, Rhode Island 02901
The undersigned hereby agree to the following amendment of the Service
Agreement between them for Primary Service dated February 15, 1974, such
amendment to become effective upon acceptance by the Federal Energy Regulatory
Commission:
In Appendix A forming part of said Service Agreement, "Thirty-
fourth Revised Page No. 4", copy of which is attached to this
agreement, supersedes and is substituted for "Thirty-third Revised
Page No. 4".
WITNESS the corporate names of the parties, by their proper officers
thereunto duly authorized, on the date first above written.
Executed in duplicate.
NEW ENGLAND POWER COMPANY
By
Vice President
THE NARRAGANSETT ELECTRIC COMPANY
By
President
CERTIFICATE OF CONCURRENCE
This is to certify that THE NARRAGANSETT ELECTRIC COMPANY assents to the
filing of and concurs in the amendment described below, which NEW ENGLAND
POWER COMPANY has filed, insofar as it is one of the parties providing
electric service thereunder, and hereby files this certificate of concurrence
in lieu of the filing of the amendment specified:
Amendment to Service Agreement for the Primary Service for Resale with
New England Power Company dated February 15, 1974 (The Narragansett
Electric Company, FERC Electric Tariff, Original Volume Number 1).
THE NARRAGANSETT ELECTRIC COMPANY
By
President
Dated: October 30, 1995
NEW ENGLAND POWER COMPANY
--------------------------
PRIMARY SERVICE FOR RESALE
---------------------------
AMENDMENT TO SERVICE AGREEMENT
------------------------------
Dated as of: February 1, 1997
Parties: NEW ENGLAND POWER COMPANY,
a Massachusetts corporation (the "Company" or "NEP")
and
THE NARRAGANSETT ELECTRIC COMPANY
a Rhode Island corporation (the "Customer" or
"Narragansett"),
WHEREAS, the Customer is currently an all-requirements electric customer
of the Company under the Company's FERC Tariff, Original Volume No. 1 (the
"Tariff"), and a Service Agreement as amended (the "Service Agreement"); and
WHEREAS, under the Service Agreement, the Customer purchases from the
Company for resale all of the electric requirements of the ultimate customers
in the Customer's service territory; and
WHEREAS, the Rhode Island General Assembly passed into law the Rhode
Island Utility Restructuring Act of 1996 ("URA"), which extends wholesale
competition in power supply markets to retail customers through the provision
of retail access directly to Narragansett's customers; and
WHEREAS, the termination of all-requirements service under the Tariff
and the provision of unbundled transmission service by the Company to
Narragansett under the Company's open access tariff are necessary to implement
retail access in a manner consistent with the URA; and
WHEREAS, the Customer desires to comply with the URA to terminate the
requirement that it purchase all of the electric requirements of the customers
in its service territory from the Company under the Tariff before the term of
the Service Agreement has expired, and to retain the flexibility to terminate
its purchase requirement entirely on the date when standard offer service is
made available to all distribution customers of Rhode Island electric
utilities pursuant to the terms of the URA; and
WHEREAS, the Customer desires to continue to receive transmission
service over the transmission facilities owned or operated by the Company
after the termination of its purchases under the Tariff; and
WHEREAS, the Customer desires to retain the option, but not the
obligation, to purchase electricity from the Company after the termination of
its purchases under the Tariff or the option for the ultimate customers in the
Customer's service territory to do so; and
WHEREAS, the Company is willing to permit the Customer to terminate its
purchase requirement before the Term has expired and to provide the options
desired by the Customer, but only upon the terms and conditions set forth in
this Amendment to Service Agreement ("Amendment");
NOW, THEREFORE, the Company and the Customer, in consideration of their
mutual commitments set forth herein, agree as follows:
1. The Parties agree that, notwithstanding anything to the contrary
in the Service Agreement or in the Tariff, the Customer's obligation to
purchase electricity under the Service Agreement and the Company's obligation
to provide electricity under the Service Agreement shall be reduced as of July
1, 1997, in accordance with the Retail Access Schedule (as defined in Section
2 of this Amendment), and shall terminate as of the Contract Termination Date,
which shall be determined pursuant to Section 3 of this Amendment. Except as
provided in Section 9 below, or in a separate contract for power supply, the
Company shall have no further obligation to meet the electricity demands of
the ultimate customers in the service territory of the Customer on or after
the Contract Termination Date, or to make any plan, investment, purchase, or
commitment to maintain sufficient generating capacity to provide adequate,
continuous, or reliable electricity supplies to the Customer or its ultimate
customers on or after such date.
2. The Customer shall not be obligated to purchase, and the Company
shall not be obligated to supply, electricity required by any distribution
service customer of the Customer, or its successor or assign, that is taking
retail access in accordance with the following schedule ("Retail Access
Schedule"):
Phase 1: On July 1, 1997, the following customers shall have retail access:
(i) all new commercial and industrial customers, including new
manufacturing customers, commencing service on or after July 1,
1997, with an anticipated average annual demand of two hundred
(200) kilowatts or greater; (ii) all existing manufacturing
customers with an average annual demand of fifteen hundred (1500)
kilowatts or greater; and (iii) all accounts in the name of the
State of Rhode Island, provided, however, the Customer may limit
retail access to no more than ten percent (10%) of its total
kilowatt-hour sales.
Phase 2: On January 1, 1998, retail access shall be extended to the
following customers: all existing manufacturing customers with an
average annual demand of two hundred (200) kilowatts or greater
and all accounts in the name of the cities and towns in Rhode
Island, provided, however, the Customer may limit retail access to
no more than twenty percent (20%) of its total kilowatt-hour
sales.
Phase 3: The remaining customers shall have retail access on the earlier to
occur of (i) the Retail Access Date defined in Section 3, below,
(ii) within three months after retail access is available to forty
percent (40%) or more of the kilowatt-hour sales in New England
including the total kilowatt-hour sales in Rhode Island, or (iii)
July 1, 1998, provided, however, if the Rhode Island Public
Utilities Commission ("Rhode Island Commission") extends the
deadline beyond July 1, 1998, then the remaining customers shall
have access on the extended date established by the Rhode Island
Commission.
3. The Contract Termination Date shall occur on the earlier of the
Retail Access Date, determined in accordance with subparagraph (a) or the
Wholesale Access Date, determined in accordance with subparagraph (b).
(a) The Retail Access Date shall be the later of January 1,
1998, or the date of a final nonappealable order of the Rhode
Island Commission approving the divestiture plan for the
disposition of the Company's non-nuclear generating facilities,
provided, however, that in any event, the Retail Access Date shall
occur no later than three months after retail access is available
to forty percent (40%) or more of the kilowatthour sales in New
England, including the total kilowatthour sales in Rhode Island.
(b) The Wholesale Access Date shall be the earlier of the Retail
Access Date or the date on which the Customer in its sole
discretion decides to terminate purchases under Tariff 1 and the
Service Agreement, provided that such date shall not be earlier
than January 1, 1998, and provided further that the Customer shall
give the Company at least 90 days advance written notice of its
declaration of the Wholesale Access Date.
4. The Customer shall pay to the Company the Contract Termination
Charges determined in accordance with Appendix 1 and the Schedules attached to
this Amendment, which set forth Base Contract Termination Charges and formulae
for the adjustment of the Base Contract Termination Charges. Between July 1,
1997 and the Contract Termination Date, the Contract Termination Charges shall
apply to all kilowatthours delivered but not sold by the Customer, or its
successor or assign, in the Customer's Service Area. After the Contract
Termination Date, the Contract Termination Charges shall apply to all
kilowatthours delivered by the Customer, or its successor or assign in the
Customer's Service Area, whether or not such kilowatthours are sold by the
Customer. The Customer's Service Area is defined to include the area served
by the Customer on August 6, 1996. Kilowatthours delivered are defined to
include all kilowatthours delivered to electricity consumers in the Customer's
Service Area, whether or not they are present customers of the Customer.
5. For the period between July 1, 1997 and the Contract Termination
Date, the Company shall charge and the Customer shall pay the Demand and
Energy Charges shown on Fifty-third Revised Page No. 1 of Schedule II-A, which
sets forth the W-95(S) rates, for all kilowatts and kilowatthours purchased by
the Customer from the Company for resale to retail customers, and such charges
shall not be subject to change during such period for service to the Customer.
For the same period, the Company shall charge and the Customer shall pay the
Contract Termination Charges determined in accordance with Appendix 1 and the
Schedules attached to this Amendment for all kilowatthours delivered, but not
sold, to retail customers in its service territory, pursuant to the Retail
Access Schedule. During this period the Company shall reconcile recoveries
under W-95(S) rates and the Contract Termination Charge pursuant to procedure
set forth in Section 1.1.4 of Appendix 1. After the Contract Termination
Date, the Company's service under the W-95(S) rates will cease, and the
Company will charge and the Customer will pay the Contract Termination Charges
for all kilowatthours delivered to the Customer's Service Area. In addition,
the Company shall be obligated to provide the Customer with standard offer
service pursuant to Section 9, below.
6. For the period between July 1, 1997 and the Contract Termination
Date, the Company will adjust non-fuel billings to the Customer to assure that
the Customer's average purchased power expense is not increased solely as a
result of the phase-in of retail access in Rhode Island. This adjustment is
necessary because of the Company's marginal cost rate design. The sales lost
as the result of the Customer's retail load beginning to purchase electricity
from other power producers would have been billed by the Company at its lower-
cost tail block rates. Thus, a billing adjustment is necessary to prevent the
average cost of power supply to the Customer and its remaining retail load
from increasing solely as a result of the phase-in of retail access.
Base rate adjustments will be established using estimated and/or actual
hourly loads provided to the Company on a monthly basis for Tariff No. 1
billing. The hourly loads will be summed to determine usage during On-Peak
Hours and Off-Peak Hours. The Customer will provide the average rate of
delivery associated with retail customers in its service territory who
purchased electricity from a power producer other than the Company during the
sixty-minute clock hour occurring at the time of the Company's peak load for
the month. These amounts ("the Retail Access Loads") need to be estimated
because the wholesale meter reads at the Company's interconnections with the
Customer cannot distinguish between requirements loads under the Company's
Tariff No. 1 and Retail Access Loads.
The Company will adjust the Customer's base rate purchased power expense
excluding the Retail Access Loads to equal what the base rate purchased
power expense would have been if the Retail Access Loads had continued to
purchase requirements service from the Customer. Adjustments will be made for
demand, on-peak energy and off-peak energy. The total adjustment shall equal
the sum of the: (1) Adjustment to Demand Related Expense, (2) Adjustment to
On-Peak Energy Expense, and (3) Adjustment to Off-Peak Energy Expense.
Formulas for each of these three adjustments are shown below.
ADJUSTMENT TO (Average Demand Average Demand ) Total kW
DEMAND RELATED = (Charge Including - Charge Excluding )x Purchases Excluding
EXPENSE (Retail Access Load Retail Access Load) Retail Access Load
ADJUSTMENT TO (Avg Peak Energy Avg Peak Energy ) Total Peak kWh
ON-PEAK = (Charge Including - Charge Excluding )x Purchases Excluding
ENERGY EXPENSE (Retail Access Load Retail Access Load) Retail Access Load
ADJUSTMENT TO (Avg Off-Pk Energy Avg OffPk Energy ) Total Off-Pk kWh
OFF-PEAK = (Charge Including - Charge Excluding )x Purchases Excluding
ENERGY EXPENSE (Retail Access Load Retail Access Load) Retail Access Load
After the Contract Termination Date, the adjustments pursuant to this
paragraph shall cease.
7. Notwithstanding anything to the contrary in the Tariff or the
Service Agreement, the Contract Termination Charges specified in Appendix 1
and the attached Schedules to this Amendment shall remain in effect until the
Company has collected all amounts subject to collection thereunder and neither
the Customer's obligation to pay the Contract Termination Charges in full nor
the formulae for the calculation of the Contract Termination Charges set forth
in Appendix 1 and the attached Schedules to this Amendment shall be subject to
change through application to the Federal Energy Regulatory Commission
pursuant to the provisions of Section 205 or Section 206 of the Federal Power
Act, absent the agreement of the Company or its successors or assigns.
8. Notwithstanding anything to the contrary in Schedule III-B of the
Tariff, the Company will discontinue fixed credits to the Customer for
generation and transmission effective on the date or dates that the Customer's
integrated generation or transmission facilities are transferred to the
Company, a separate affiliate, or an unaffiliated third party. During any
period in which the Customer has transferred some, but less than all of its
generation or transmission facilities, the amount of the applicable fixed
credit, excluding municipal taxes and cost of removal expenses associated with
the South Street Station, will be prorated to reflect the remaining facilities
by multiplying the appropriate fixed credit for either generation or
transmission by the ratio of gross plant investment remaining to the total
gross plant. Nothing in this Amendment shall preclude the Company from
otherwise petitioning the FERC to adjust the level of the fixed credits in
accordance with the terms of the Tariff.
9. For the period commencing on the Contract Termination Date and
extending through December 31, 2009 (the "Standard Offer Period"),/1/ the
_______________________
/1/ Company and Customer shall have the right in their sole discretion
to shorten the period of standard offer service to December 31, 2004, if
Customer no longer has the obligation under the Rhode Island URA to extend
standard offer service through 2009.
Company shall provide service to the Customer in accordance with this section,
such service being referred to as "Standard Offer Service."
(a) Standard Offer Service shall be made available at the
prices set forth in the Stipulation and Agreement, adjusted for a
fuel index. The prices for Standard Offer Service do not include
charges for transmission services provided in accordance with
section 10 of this Amendment, or charges for distribution services
under the Customer's rates for distribution services, but
otherwise reflect the price of electricity delivered to the meters
of the ultimate customers of the Customer.
(b) Standard Offer Service shall be made available by the
Company to the Customer after the Wholesale Access Date for the
purposes set forth in paragraph D of Schedule I of the Tariff or
to the Customer for resale to those ultimate customers in the
Customer's service territory who elect to purchase Standard Offer
Service after the Retail Access Date and have not terminated
Standard Offer Service to purchase electricity from another
supplier, provided that, neither the Customer nor the ultimate
customers shall be required to purchase Standard Offer Service
from the Company. For the first year after the Retail Access
Date, the Company shall make Standard Offer Service available to
all residential or Rate C-2 customers of the Customer, who have
previously taken service from an alternative supplier, if such
residential or Rate C-2 customer elects to return to Standard
Offer Service within 120 days of taking service from the
alternative supplier.
(c) In the event the Contract Termination Date is determined by
the Wholesale Access Date, the Customer shall be free, either in
its notice pursuant to section 3(b), or thereafter by giving the
Company at least 90 days advance written notice directed to the
first day of a calendar month, to terminate or reduce its
purchases of Standard Offer Service from the Company in order to
obtain electricity from other suppliers in the market. Once the
Customer has reduced or terminated its purchases of Standard Offer
Service from the Company, the Company shall have no obligation to
supply Standard Offer Service to the Customer with respect to the
terminated or reduced purchases.
(d) No less than 90 days before the Retail Access Date, the
Customer shall notify the Company in writing of the quantity of
energy it shall purchase under Standard Offer Service for resale
to ultimate customers in its service territory. The Customer
shall provide the Company with at least 30 days prior advance
written notice, directed to the first day of a calendar month, of
reductions in the quantity of energy so purchased due to decisions
by customers initially electing Standard Offer Service to purchase
electricity from other suppliers after the Retail Access Date.
Nothing in this Amendment shall restrict the right of any ultimate
customer to purchase electricity from other suppliers after the
Retail Access Date, provided that, except as set forth in section
9(b), above, once any such ultimate customer has purchased
electricity from another supplier, the Company shall have no
obligation to supply Standard Offer Service to the Customer for
resale to such ultimate customer.
(e) The Company acknowledges that the Customer will offer
alternative power suppliers the opportunity in an auction to
supply electricity to enable the Customer to provide Standard
Offer Service to ultimate customers in its service territory after
the Retail Access Date. The Company shall be free to bid in the
auction, provided that the Company's bid shall not exceed the
prices set forth in the Stipulation and Agreement, adjusted for
the fuel index set forth in that Agreement.
10. In accordance with the Retail Access Schedule, the Company
(including any successor or assign of the Company that succeeds to the
Company's obligations with respect to the operation of its transmission
facilities) shall, upon request of the Customer, provide network integration
transmission service to the Customer in accordance with the Service Agreement
for Network Integration Transmission Service between the Customer and the
Company included in Attachment 3 to the Stipulation and Agreement, and with
the terms and conditions of the tariff maintained in effect by the Company for
such service, or in accordance with the policy of the Federal Energy
Regulatory Commission as in effect from time to time. Such service shall be
provided to the Customer after the Wholesale Access Date to enable the
Customer to integrate its loads and resources and shall be provided to the
Customer after the Retail Access Date to enable the ultimate customers in the
Customer's service territory to integrate their loads and resources. From
July 1, 1997 through the Contract Termination Date, the Network Integration
Transmission Service shall only apply to kilowatthours delivered, but not
sold, by the Customer in the Customer's Service Area, and the Company shall
continue to provide transmission service to the Customer pursuant to the
W-95(S) wholesale rate for the retail customers continuing to purchase power
from the Customer. After the Contract Termination Date, the Network
Transmission Service shall apply to all kilowatthours delivered in the
Customer's Service Area.
11. This Amendment shall take effect as of the date it is permitted to
become effective by the Federal Energy Regulatory Commission, which date shall
be referred to as the "Effective Date." This Amendment, together with all
provisions of the Tariff and the Service Agreement necessary to effectuate all
provisions of this Amendment, shall remain in effect until all obligations of
the parties under this Amendment, including, without limitation, the
obligation of the Customer to pay to the Company the Contract Termination
Charges, have been discharged in full. Upon the discharge in full of all such
obligations, this Amendment and the Service Agreement shall terminate.
12. The provisions of this Amendment shall override any inconsistent
provisions of the Service Agreement and, with respect to the Customer, all
inconsistent provisions of the Tariff, but all provisions of the Tariff and
the Service Agreement that are not inconsistent with this Amendment shall
remain in full force and effect.
13. The rights conferred and obligations imposed on the Customer and
Company under this Amendment shall be binding on or inure to the benefit of
their successors in interest or assignees as if such successor or assignee was
itself a signatory hereto.
IN WITNESS WHEREOF, the parties have executed this Amendment of Service
Agreement as of the date first written above.
NEW ENGLAND POWER COMPANY
By
Its
THE NARRAGANSETT ELECTRIC COMPANY
By
Its