Exhibit 10(b)(v)
New England Power
A XXXX company
July 11, 1996
Xx. Xxxx X. Xxxxxxx
President
Granite State Energy, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
CONFIRMATION LETTER
This letter shall confirm the agreement reached on July 11,
1996, between New England Power Company ("NEP") and Granite State
Energy, Inc. ("Buyer") regarding the sale/purchase of energy
under the following terms and conditions:
Buyer to purchase and receive, NEP to sell and deliver:
CONTRACT Exclusive, all-requirements service, as
QUANTITY: needed to support contracts between
Buyer and its retail customers which are
executed after July 15, 1996 through
October 15, 1996.
DELIVERY (1) For service to retail customers
POINT(S): served by Granite State Electric
Company, a point or points on the NEP
transmission system; or
(2) For service to retail customers
served by Public Service Company of New
Hampshire ("PSNH"), a point or points on
the NEP transmission system border with
PSNH; or
(3) For service to retail customers
served by UNITIL/Concord, a point or
points on the NEP transmission system
border with PSNH; or
(4) For service to retail customers
served by UNITIL/Exeter & Hampton, a
point or points on the NEP transmission
system border with PSNH; or
(5) For service to retail customers
served by the New Hampshire Electric
Cooperative, Inc. ("NHEC") which are
served off of the PSNH transmission
system, a point or points on the PSNH
transmission system border with NHEC; or
(6) For service to retail customers
served by NHEC which are served off of
the Central Vermont Public Service
Company ("CVPS") transmission system, a
point or points on the CVPS transmission
system border with NEP; or
00 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Telephone: 000-000-0000
Granite State Energy, Inc.
Confirmation Letter
page 2
(7) For service to retail customers
served by NHEC which are served off of
the NEP transmission system, a point or
points on the NEP transmission system;
or
(8) For service to retail customers
served by Connecticut Valley Electric
Company ("CVEC"), a point or points on
the CVPS transmission system border with
NEP; or
(9) Such other points as otherwise
agreed between NEP and Buyer.
In the event that NHEC obtains
transmission service for its retail
customers across the PSNH transmission
system then the Delivery Point for point
5 above shall be a point or points on
the NEP transmission system border with
PSNH.
CONTRACT The Energy Charge Rate for energy
PRICE: delivered during On-Peak hours (as
defined below) shall be as follows:
Aug '96 - Oct '96: $28.25 per MWh
Nov '96 - May '97: $28.00 per MWh
June '97 - Oct '97: $26.25 per MWh
Nov '97 - May '98: $27.25 per MWh
The Energy Charge Rate for energy
delivered during Off-Peak hours (as
defined below) shall be as follows:
Aug '96 - Oct '96: $21.10 per MWh
Nov '96 - May '97: $22.25 per MWh
June '97 - Oct '97: $21.50 per MWh
Nov '97 - May '98: $21.50 per MWh
A Reservation Charge Rate of $2.50 per
MWh shall apply to each MWh delivered
during On-Peak and Off-Peak hours;
provided, however, that the Reservation
Charge Rate will be $1.25 per MWh,
during periods when NEP is the sole
supplier of energy to Buyer, should
Buyer add language in a form acceptable
to NEP on Buyer's promotional and/or
billing materials indicating that NEP is
Granite State Energy, Inc.
Confirmation Letter
page 3
Xxxxx's supplier of energy for the New
Hampshire Pilot Program.
On-Peak hours shall be from 7:01 AM to
10:00 PM, Monday through Friday,
excluding holidays. All other hours
shall be considered Off-Peak hours.
The above Energy Charge Rates and
Reservation Charge Rates are applicable
only to contracts between Buyer and its
retail customers which are executed
after July 15, 1996. Contracts between
Buyer and its retail customers which
were entered into on or before July 15,
1996 are subject to the agreement
between NEP and Buyer dated May 21, 1996
("May 21 Agreement"). Should the total
sales under this agreement and the May
21 Agreement exceed 20 MW of energy in
any hour, then the excess energy will be
served under a separate agreement
between NEP and Buyer.
PERIOD OF For all sales from Buyer to its retail
DELIVERY: customers, commencing with the start of
service under the New Hampshire Retail
Pilot Program and ending upon the
termination of service under the New
Hampshire Retail Pilot Program.
Buyer may terminate service under this
Confirmation prior to June 1, 1997;
provided, however (i) Buyer provides NEP
with thirty days written notice prior to
such termination; (ii) following
termination, Buyer utilizes its own own-
load dispatch at NEPOOL to account for
its load and resources; (iii) NEP
provides 100% of the energy and capacity
needed to meet Buyer's own-load
requirements from termination through
May 31, 1997 ("Period A"); and (iv) NEP
provides a minimum of 50% of the energy
and capacity needed to meet Xxxxx's own-
load requirements from June 1, 1997
through May 31, 1998 ("Period B"). The
rates and terms under which NEP will
provide such energy and capacity will be
established under separate agreement,
such agreement to be negotiated in good
faith between NEP and Buyer; provided,
Granite State Energy, Inc.
Confirmation Letter
page 4
however (i) the energy and reservation
rates during Period A shall not exceed
the rates contained in this Confirmation
plus any incremental costs incurred by
NEP, if any, to provide such service;
(ii) the reservation rates during Period
B shall not exceed the rate contained in
this Confirmation; and (iii) the average
annual energy rate during Period B shall
not exceed the following:
Energy Price = (A x Oil Price) +
(B x Gas Price) + C
where:
A, B are constants, expressed in
million Btu per MWh. "A" shall
equal 4.74 during On-Peak hours
and 1.76 during Off-Peak hours.
"B" shall equal 4.74 during
On-Peak hours and 1.76 during
Off-Peak hours;
C is a constant, expressed in $
per MWh, and shall equal 2.61
during On-Peak hours and 10.22
during Off-Peak hours;
Oil
Price is the average of the daily low
quotations for cargo delivery of
1.0% sulphur #6 residual fuel
oil into New York Harbor, as
reported during the billing
period by Xxxxx'x Market Scan,
expressed in $ per million Btu;
and
Gas
Price is the arithmetic average of the
daily settlement prices for the
last three days that the NYMEX
Contract for the month of
delivery trades, as reported in
the Wall Street Journal,
expressed in $ per million Btu.
NYMEX Contract shall mean the
New York Mercantile Exchange
Natural Gas Futures Contract as
approved by the Commodity
Futures Trading Commission
Granite State Energy, Inc
Confirmation Letter
page 5
for the purchase and sale of
natural gas at Xxxxx Hub.
OTHER: For purposes of calculating the Energy
and Reservation Charges, the number of
MWh's delivered during On-Peak hours
shall be determined by summing all of
the hourly loads assigned to Buyer by
the various distribution companies
during On-Peak hours, including
reconciliations, if any, plus Buyer's
allocation of transmission losses, if
any, which were provided by NEP.
For purposes of calculating the Energy
and Reservation Charges, the number of
MWh's delivered during Off-Peak hours
shall be determined by summing all of
the hourly loads assigned to Buyer by
the various distribution companies
during Off-Peak hours, including
reconciliations, if any, plus Buyer's
allocation of transmission losses, if
any, which were provided by NEP.
Buyer shall provide NEP with copies of
all of the load reports it receives from
each distribution company which indicate
the hourly loads assigned by each
distribution company to Buyer.
In order to determine the load served
under this agreement and the load served
under the May 21 Agreement, Buyer shall
provide NEP with a report, by the last
day of each calendar month, which
indicates the total number of customers
Buyer has contracted with, as of the
fifteenth day of such month, by rate
category (Residential, Small Commercial
and Industrial and Large Commercial and
Industrial). The hourly load served
under the May 21 Agreement shall be
determined as follows:
HLA=(A/B)x Load
where:
Granite State Energy, Inc.
Confirmation Letter
page 6
A is the value of TCL, as defined
below, as of July 15, 1996;
B is the value of TCL, as defined
below, as of the fifteenth day
of the current billing month
(ie., as of August 15 for sales
during the month of August);
provided, however, that the
value of B shall not be less
than the value of A;
HLA is the hourly load served under
the May 21 Agreement; and
Load is Xxxxx's total hourly load for
the hour which is served under
this agreement and the May 21
Agreement.
The hourly load served under this
agreement shall be determined as
follows:
HLB = ((B-A)/B) x Load
where:
A, B are as defined above;
HLB is the hourly load served under
this agreement; and
Load is Xxxxx's total hourly load for
the hour which is served under
this agreement and the May 21
Agreement.
The value of TCL shall be determined as
follows:
TCL=(N x 1.61)+(M x 3.54)+(0 x 84.18)
where:
N is the number of customers in
the Residential rate category;
Granite State Energy, Inc.
Confirmation Letter
page 7
M is the number of customers in
the Small Commercial and
Industrial rate category; and
O is the number of customers in
the large Commercial and
Industrial rate category.
The Contract Price shown above does not
include any costs for transmission from
NEP's generation sources to the Delivery
Points. NEP will be responsible for
arranging network integration
transmission service and for supplying
any losses from its generation source(s)
to the Delivery Point(s). In addition to
the above Energy and Reservation
Charges, Buyer shall reimburse NEP for
the costs incurred for such transmission
service.
Notwithstanding anything to the contrary herein, to the
extent that the costs incurred in delivering energy under this
Agreement later change due to the use of formula rates,
governmental order, or as a result of actions otherwise beyond
the reasonable control of NEP, NEP shall bill and Buyer shall pay
any such incremental costs incurred by NEP.
This Confirmation Letter is being provided pursuant to and in
accordance with the New England Power Company FERC Electric
Tariff Original Volume No. 5 Waiver and Service Agreement to
Implement Retail Sales Under New Hampshire Pilot Program filed
with the Federal Energy Regulatory Commission on April 16, 1996
in Docket No. ER96-1585-000, ("Agreement") between NEP and Buyer,
and constitutes part of and is subject to all of the terms and
provisions of such Agreement. Terms used but not defined herein
shall have the meanings ascribed to them in the Agreement.
Please confirm that the terms stated herein accurately
reflect the agreement reached between NEP and Buyer by returning
an executed copy of this letter to Xxxxx. Your response should
reflect the appropriate Party in your organization who has the
authority to enter into this Transaction.
Granite State Energy, Inc.
Confirmation Letter
page 8
GRANITE STATE ENERGY, INC.
s/Xxxx X. Xxxxxxx
-------------------------
Title: President
-------------------------
NEW ENGLAND POWER COMPANY
s/Xxxx X. Xxxxxx
-------------------------
Title: Vice President
-------------------------
