EXHIBIT D
March 12, 1996
Xxxx X. Xxxxxxx, Secretary
Federal Energy Regulatory Commission
000 Xxxxx Xxxxxx, X.X.
Washington, DC 20426
Re: XXXX Transmission Services, Inc. -- Open
Access Transmission Tariffs, Service
Agreements, Related Contracts; New England
Power Company -- Control Area Ancillary
Transmission Services Agreement, Generation
Services Support Agreement, Amendment to FERC
Electric Tariff, Original Volume No. 1; New
England Power Company, Massachusetts Electric
Company, The Narragansett Electric Company
and Granite State Electric Company --
Transmission and Distribution Support
Agreement
Dear Secretary Xxxxxxx:
Overview of Filing
New England Electric System ("XXXX"), on behalf of its
proposed new subsidiary to be formed and named XXXX Transmission
Services, Inc. ("XXXX Trans"), and New England Power Company
("NEP") hereby submit for filing transmission tariffs and related
agreements in response to the Commission's Notice of Proposed
Rulemaking in Docket No. RM95-8-000 (NOPR). Today's filing for
open and comparable transmission access meets, and indeed goes
beyond, the requirements set forth in the Commission's NOPR and
pro forma tariffs.
As explained below and in the accompanying testimony, the
XXXX Companies 1 propose to turn control of their transmission
facilities over to XXXX Trans. NEP will take service under the
tariffs for all off-system wholesale transactions, as will
unaffiliated market participants. In addition, the XXXX Companies
propose to apply XXXX Trans' new tariffs to NEP's service to its
existing wholesale requirements customers. These actions will
ensure that both XXXX Trans' affiliates as well as unaffiliated
customers will rely on the tariffs for unbundled transmission
service. 2
The tariffs filed today provide for wholesale transmission
services only. The unbundling of wholesale transmission and
generation services that these tariffs implement is nevertheless a
critical underpinning for Choice: New England, the XXXX Companies'
plan for the introduction of retail competition. The service
agreements under the tariffs may be voluntarily modified to
provide for retail wheeling service on terms that allow recovery
of stranded costs, prevent bypass and provide for the collection
of a non-bypassable access charge, consistent with Choice: New
England. 3
__________________
1 The XXXX Companies affected by this filing include New
England Power Company, Massachusetts Electric Company ("Mass.
Electric"), The Narragansett Electric Company ("Narragansett")
and Granite State Electric Company ("Granite State"). Granite
State does not own transmission facilities, however, as defined
under the Federal Power Act, 16 U.S.C. Section 824d et seq.
2 Attachment A to this filing letter shows the proposed
transition from New England Power Company's bundled generation and
transmission business to the corporate and functional separation
of generation and transmission with the establishment of XXXX
Trans. The attachment also shows the migration of customers and
services from NEP's existing transmission tariffs and contracts to
the XXXX Trans tariffs tendered today. Because of the tightly-
related and comprehensive nature of the package of tariffs,
service agreements and contracts affected by this filing, it is of
critical importance that the package be viewed and treated as a
whole. The XXXX Companies also respectfully request that the
effective dates sought for the various elements of this package be
granted as requested. Such treatment will work to ensure that all
similarly situated customers migrate to comparable service
simultaneously and that all rate moratoria currently in effect are
honored.
Although the XXXX Companies are not proposing at this time to
transfer ownership of their transmission assets to XXXX Trans, the
proposed XXXX Trans tariffs are also designed to function with
minimal modifications in the event of such a transfer. The XXXX
Companies recognize that before transfer of ownership may occur,
state and federal regulatory approvals would be required.
Rate Schedules
Pursuant to section 205 of the Federal Power Act and Part 35
of the Commission's Regulations, enclosed for filing on behalf of
XXXX Transmission Services, Inc., a new subsidiary of XXXX, are
six copies of each of the following:
- XXXX Transmission Services, Inc.'s Network Integration
Service Transmission Tariff ("Network Tariff"), under
which XXXX Trans offers wholesale network transmission
service over the integrated transmission system of the
XXXX Companies to eligible customers, including the
distribution affiliates of XXXX, on a comparable and
non-discriminatory basis;
- XXXX Transmission Services, Inc.'s Point-to-Point
Transmission Service Tariff ("Point-to-Point Tariff"),
under which XXXX Trans offers wholesale point-to-point
transmission service over the transmission system of the
XXXX Companies to eligible customers, including NEP, the
generation subsidiary of XXXX, on a comparable and non-
discriminatory basis;
__________________
3 The XXXX Trans network service agreement with each of NEP's
current all-requirements Tariff No. 1 customers includes a
liability release and indemnification under which the customer
agrees to hold XXXX Trans harmless in the event that the customer
requests transmission service not generally available but which
may give rise to stranded costs. Similar language is incorporated
into Section 25 of the Point-to-Point Tariff.
- Service Agreements under XXXX Transmission Services,
Inc.'s Network Tariff for (i) customers currently taking
service under NEP's wholesale requirements tariff (NEP's
FERC Electric Tariff, Original Volume No. 1), including
NEP's distribution affiliates; (ii) all customers
currently taking service under NEP's existing tariff for
wholesale network transmission service to transmission
dependent utilities (NEP's FERC Electric Tariff,
Original Volume No. 4); (iii) all customers taking
network-type service under NEP's FERC Electric Tariff,
Original Volume No. 8; and (iv) Fitchburg Gas & Electric
Co.; 4
- Service Agreements for non-firm service under XXXX
Transmission Services, Inc.'s Point-to-Point Tariff for
(i) NEP, to be used for the wheeling of its wholesale
coordination sales; (ii) all customers with service
agreements under NEP's existing tariff for non-firm
point-to-point wholesale transmission service (NEP's
FERC Electric Tariff, Original Volume No. 3); and (iii)
all customers with non-firm contracts dependent on the
terms, conditions and rates of Tariff No. 3; 5
- Service Agreement for Firm Service under XXXX
Transmission Services, Inc.'s Point-to-Point Tariff for
all customers with service agreements for point-to-point
firm service under NEP's Tariff No. 8;
- Support Agreements between XXXX Transmission Services,
Inc. and the municipal light departments of Hingham and
Hull (Mass.) for their limited use of the Company's
transmission system. 6
__________________
4 Fitchburg Gas & Electric is a transmission-dependent
utility which has been taking non-firm point-to-point service
under NEP's Tariff No. 3.
In addition, enclosed for filing on behalf of NEP are six
copies of each of the following:
- Control Area Ancillary Transmission Services Agreement
between New England Power Company and XXXX Transmission
Services, Inc., under which NEP agrees to provide
generation-related ancillary services to enable XXXX
Trans to provide generation-related ancillary services
to customers under its tariffs;
- Generation Services Support Agreement between New
England Power Company and XXXX Transmission Services,
Inc., which defines the terms under which (i) NEP will
operate its generation facilities out of economic
dispatch at XXXX Trans' request, in connection with
constraints on the transmission system operated by XXXX
Trans, and (ii) NEP's generation will provide for
reactive power support; and
- An amendment to Schedules II-A and II-B of Tariff No. 1,
which requires NEP to provide a credit to its wholesale
requirements customers equal to their payments under
XXXX Trans' Network Tariff, thereby permitting the
unbundling of NEP's wholesale requirements service
without affecting the overall level of customers' rates
under Tariff No. 1. The credit is designed to maintain
revenues from each Tariff No. 1 customer at a level
equal to the total revenues billable under the settled
W-95(S) and W-95(N) rates. Accordingly, any refunds
___________________
5 XXXX Trans proposes to treat existing Tariff No. 3 service
agreements (except for Fitchburg Gas & Electric) and contracts
based on Tariff No. 3 as the equivalent of completed Transaction
Requests for non-firm service under the Point-to-Point Tariff
filed today. As of the effective date of the Point-to-Point
Tariff, however, customers will be required to complete and submit
Transaction Requests to XXXX Trans for subsequent transactions.
The Company furthermore proposes to deem long-term (i.e., longer
than 30 days) transactions under NEP's Tariff No. 3 "renewed"
through the expiration of their terms. XXXX Trans makes this one-
time offer in an effort to mitigate the administrative effects of
the transition from NEP's Tariff No. 3 and dependent contracts to
XXXX Transmission Services, Inc.'s Point-to-Point Tariff.
6 The distinct configuration of the Hingham and Hull systems
and the rationale for their support agreements are discussed in
Xx. Xxxxxx'x testimony.
ordered by the Commission following its review of the
Network Tariff would be reconciled and payable to NEP
during the effective period of the W-95(S) and W-95(N)
tariff rates.
Finally, enclosed for filing on behalf of New England Power
Company, Massachusetts Electric Company, The Narragansett
Electric Company, and Granite State Electric Company are six
(6) copies of:
- Transmission and Distribution Support Agreement under
which XXXX Trans assumes control over NEP's transmission
facilities and agrees to reimburse NEP for the costs of
owning, operating and maintaining those facilities, and
under which Mass. Electric, Narragansett and Granite
State agree to permit XXXX Trans to offer distribution
services for third-party wholesale transactions.
Formation of XXXX Transmission Services, Inc. and Corporate
Unbundling of Transmission and Generation
XXXX Transmission Services, Inc. is a newly proposed
subsidiary of XXXX, whose purpose is to control, operate and
maintain the transmission facilities of the XXXX Companies, and to
provide transmission services over those facilities throughout the
XXXX Companies' three-state service area. 7 Concurrent with this
filing, XXXX will submit an application under the Public Utility
Holding Company Act of 1935 seeking authorization for the
establishment of XXXX Transmission Services, Inc. 8 Because XXXX
Trans requires this SEC approval, the effective date of all
contracts, tariffs and service agreements tendered today is
requested as of the first day of the calendar month following the
later of (i) 60 days from today's date or (ii) five (5) business
days following SEC approval.
By turning over control of their transmission facilities to
XXXX Trans and committing to take service over those facilities
under XXXX Trans' tariffs, the XXXX Companies propose to implement
the Commission's comparability objectives for open access
wholesale transmission in a manner that goes beyond the
requirements of the NOPR. Although the NOPR does not require
corporate unbundling, the XXXX Companies have taken this step as
part of their overall approach to ensuring the provision of
wholesale transmission service on comparable terms to all users of
the transmission system, including XXXX Trans' affiliates.
As further described in Xx. Xxxxxx'x testimony in support of
this filing, XXXX Xxxxx will also play a major role in the
implementation of Choice: New England, the XXXX Companies'
proposal for introducing customer choice in retail markets. XXXX
Trans and the tariffs which are the subject of this filing are also
critical components in ensuring nondiscriminatory open access
transmission across the XXXX Companies' integrated system in New
England. Xx. Xxxxxx'x enclosed testimony explains in detail how
the two tariffs will operate to serve all customers -- affiliated
and non-affiliated -- with comprehensive transmission services in
a comparable manner.
XXXX Transmission Services, Inc.'s Assumption of Control Over
NEP's Transmission System and Use of the Distribution Affiliates'
Systems
Currently, NEP owns or controls all of the transmission
facilities of the XXXX Companies. 9 Pursuant to the Transmission
and Distribution Support Agreement, NEP grants XXXX Trans the
right to use and control its transmission facilities and XXXX
Trans agrees to support the costs of those facilities. XXXX Trans
in turn will make those transmission facilities available to
qualified entities -- including its XXXX affiliates -- pursuant to
the proposed tariffs. Through its collection of charges for
service under the Network and Point-to-Point Tariffs, XXXX Trans
will recover the support charges it is obligated to pay to NEP and
its distribution affiliates under the Transmission and
Distribution Support Agreement, the Generation Services Support
Agreement and the Control Area Ancillary Transmission Services
Agreement.
The transmission facilities to which NEP is granting rights
to XXXX Trans include NEP's contractual rights to use certain
transmission facilities owned by others. 10 By providing copies
of this filing to the owners of the transmission facilities listed
in Schedule A of the Transmission Service and Support Agreement,
NEP hereby notifies those companies of its intention to xxxxx XXXX
Trans control over NEP's contractual rights to use those
facilities. XXXX Trans intends to conform its use to the rights
provided under each contract; in other words, contractual
limitations on facilities now used by NEP will be observed by XXXX
__________________
7 The XXXX Companies serve portions of Massachusetts, Rhode
Island and New Hampshire. In addition, NEP makes de minimus sales
at retail in Vermont and Massachusetts from its hydro-electric
operations.
8 Following SEC approval of the formation of XXXX Trans, the
new company will submit to the Commission a Notice of Succession
pursuant to 18 C.F.R. 35.16 and 18 C.F.R. 131.51.
Trans. By copy of this filing, NEP furthermore notifies all
parties interconnected to its transmission system of its intention
to assign its interconnection rights and obligations to XXXX
Trans. The Transmission and Distribution Support Agreement
furthermore grants XXXX Trans use of the distribution systems of
Mass. Electric, Narragansett and Granite State as they may be
needed to support wholesale transactions. Under the terms of the
Agreement, XXXX Trans agrees to reimburse each retail affiliate
for the use of its facilities at its cost of service.
XXXX Transmission Services, Inc.'s Transmission Tariffs and Their
Application to Affiliates
XXXX Trans' proposed tariffs adhere closely to the intent of
the pro forma tariffs and the Commission's objectives as stated in
the NOPR. All basic services identified in the pro forma tariffs
are provided. In some cases, service offerings are expanded or
tailored to serve known needs of transmission customers in New
England and to conform with New England Power Pool (NEPOOL)
requirements. Based on NEP's extensive experience in providing
transmission service under generally available tariffs over the
past fifteen years, XXXX Trans' tariffs offer more detail on a
number of matters than the pro forma tariffs require. For
example, both tariffs set forth detailed forms for applications
for service and forms of service agreements, interconnection
agreements and agreements for transmission system and facilities
studies. The Network Tariff also includes a standard form of
Network Operating Agreement. By including standard forms for
these agreements in the tariffs, XXXX Trans hopes to minimize
obstacles to the prompt initiation of transmission service.
The modifications 11 made by XXXX Trans to the pro forma
tariffs do not diminish the basic services provided, but recast
the pro forma tariffs for the setting of a transmission-only
company. For example, XXXX Trans does not have "native load'
customers, as defined in the pro forma tariffs. This factor alone
has caused a substantial number of modifications to the pro forma
tariff text. It has also caused XXXX Trans to enter into
transitional contracts with NEP to obtain generation-related
ancillary services and to reimburse NEP for out-of-rate
_______________
9 Some transmission facilities are owned by XXXX'
distribution affiliates, Narragansett and Mass. Electric.
However, to the extent necessary to make wholesale transactions,
these facilities are currently controlled and operated by NEP as
part of its integrated transmission system pursuant to the
integrated facilities provisions of NEP's Tariff No. 1, Schedule
III-B.
generation since these cannot be provided by a transmission-only
company. XXXX Trans has ensured that its tariffs, including the
modifications to the pro forma models, provide comparable service
for all wholesale transmission customers seeking service over the
XXXX Companies' integrated transmission system. 12
The XXXX Companies' confidence that XXXX Trans' tariffs will
operate fairly is reflected in their commitment to take all
wholesale transmission service under the tariffs. The XXXX
Companies have gone beyond the Commission's requirement that a
utility "take transmission service for [new] wholesale
requirements service and coordination transactions under its filed
tariff," NOPR at 97, by applying XXXX Trans' Network Tariff to
existing affiliated wholesale requirements customers. This is
especially significant in the case of the XXXX Companies, since
essentially all of the power through which XXXX' retail
distribution subsidiaries serve their native load customers is
purchased from NEP under NEP's wholesale requirements tariff. By
applying XXXX Trans' new Network Tariff to that service, as well
as applying XXXX Trans' Point-to-Point Tariff to NEP's
coordination sales, this filing reflects a strong commitment by
the XXXX Companies to the terms and conditions of the services
made available under those tariffs. The XXXX Companies would not
and could not make that commitment unless they were convinced that
XXXX Trans' tariffs are structured to operate fairly for all
market participants.
Rates for Transmission Services
Under the Transmission and Distribution Support Agreement,
XXXX Trans agrees to compensate NEP for NEP's total transmission
cost of service, determined in accordance with the formula
_________________
10 NEP's rights to utilize a share of certain high voltage
direct current (HVDC) facilities that transmit power from Hydro
Quebec to the regional alternating current grid are not covered by
the Transmission and Distribution Support Agreement. Nor are
NEP's costs of supporting those facilities included in the support
charges paid by XXXX Trans or in XXXX Trans' rates for tariff
services. In Northeast Utilities Service Co., 62 FERC paragraph
61,294 (1993), the Commission ruled that the costs of supporting
the HVDC facilities are not included in the cost of supporting a
utility's integrated AC transmission system. As described in Xx.
Xxxxxx'x testimony, because the HVDC facilities are not
integrated, neither they nor their costs are included in the
tariffs tendered today. NEP and XXXX Trans respectfully request
that the Commission affirm that this is the correct and
lawful treatment of these specialized facilities.
specified in Schedule B to said agreement. XXXX Trans furthermore
agrees to compensate the three retail affiliates for XXXX Trans'
responsibility for NEP's transmission cost of service, together
with the costs incurred by XXXX Trans in operating the
transmission system, form the basis for the charges for
transmission service under the tariffs. Customers under XXXX
Trans' Network Tariff (including XXXX Trans' distribution
affiliates) will pay their load-ratio share of the total cost of
service. Firm and non-firm customers under XXXX Trans' Point-to-
Point Tariff, including NEP, will pay rates determined by dividing
the historic calendar year transmission revenue requirement by
annual system network peak. Initially, as explained in Xx.
Xxxxxxxxxxx'x testimony, the non-firm rate will be derived by
dividing the weekly firm rate by seven days and by dividing the
daily firm rate by 24 hours. Firm customers will pay for all
service reserved, while non-firm customers will pay only for
service scheduled unless interrupted by XXXXXX or XXXX Trans.
________________
11 In Attachment B to this filing letter, XXXX Trans
highlights its major modifications to the pro formas with an
explanation and rationale for each. This attachment is intended
only as a convenient guide to the reader and is not meant to modify
in any way the terms, conditions and/or rates of the tariffs or
agreements which are the subject of this filing.
12 XXXX Trans recognizes that the Commission's Final Rule in
Docket No. RM95-8-000 may require modifications to the tariffs
tendered today. In the event that the Final Rule permits the
incorporation of benefits (such as headroom rights for Network
Customers), XXXX Trans reserves the right to incorporate such
provisions in any compliance filing it may be required to make.
the use of their distribution facilities when used to support
wholesale transactions. The formula for reimbursements to Mass.
Electric, Narragansett and Granite State are appended to the
Agreement as Schedule F. As explained in Xx. Xxxxxxxxxxx'x
testimony, the formulae employ a traditional cost-of-service
methodology. The testimony of Xx. Xxxxxxxx and Xx. Xxxxxxxxxx
explain and support the cost of capital and return on equity
components of NEP's and the distribution affiliates' charges to
XXXX Trans.
XXXX Trans' proposed tariffs contain substantially more
specificity on rate issues than is required under the pro forma
model tariffs. In keeping with customer expectations, and to more
closely align rates with costs, XXXX Trans will separately charge
for uses extending beyond the rolled-in transmission services.
For example, XXXX trans will separately charge for (i)
transformation stepping down to the distribution system, (ii)
meters, and (iii) wheeling over the distribution systems of the
distribution affiliates. In addition, customers requesting
studies of the need for or design of new transmission facilities
will pay XXXX Trans' actual costs incurred in performing the study
itself or through the services of its affiliate, NEPSCo. In the
event direct assignment facilities are constructed for a customer,
both tariffs provide the carrying charge formula calculation that
will be employed to charge customers for these specific
facilities, in addition to their transmission rates. Charges for
out-of-rate generation and reactive power supply are treated on a
rolled-in, embedded basis in both tariffs. Rates for other
optional ancillary services are unbundled to the extent possible
and set forth in each tariff. The proposed rates are supported in
the testimony of Xx. Xxxxxxxxxxx and Xx. Xxxx.
Control Area Ancillary Transmission Services and Generation
Services Support Agreements
As a transmission-only company, XXXX Trans cannot use its own
generating resources to offer generation-related ancillary
services to transmission customers. NEP is accordingly filing a
Control Area Ancillary Transmission Services Agreement with XXXX
Trans, under which XXXX Trans may purchase from NEP ancillary
services such as loss compensation service, energy imbalance
service and system protection service, load following service and
installed reserve service for the benefit of its transmission
customers. Such services are completely optional for XXXX Trans'
customers, and will only be requested from NEP if needed by
customers. The testimony of Xx. Xxxx discusses the ancillary
services to be offered by XXXX Trans and their associated costs.
For similar reasons, when demands on the transmission system
operated by XXXX Trans affect the operation of generating units,
the effects will be felt not by XXXX Trans -- which owns no
generation -- but by NEP and other generators. The Generation
Services Support Agreement between NEP and XXXX Trans requires NEP
to operate its generating units out of economic dispatch when
called upon by XXXX Trans to do so and for XXXX Trans to compensate
NEP for the resulting costs. To the extent not already covered by
existing agreements with NEP, XXXX Trans proposes to offer
generally similar contracts to other generators interconnected
with its system at locations that may require out-of-rate
generation. The agreement also provides compensation to NEP for
its production investment in reactive power supply. XXXX Trans
will roll the costs incurred under this Agreement into its rates.
Effect of This Filing on NEP's Existing Transmission Tariffs and
Related Contracts
NEP currently provides unbundled wholesale transmission
service under three tariffs, as well as numerous bilateral
transmission service contracts. NEP provides non-firm point-to-
point transmission service under its Tariff No. 3, network
transmission service to transmission dependent utilities under
its Tariff No. 4, and firm transmission service under its Tariff
No. 8. XXXX Trans and NEP propose to supersede NEP's Tariff No. 3
with XXXX Trans' Point-to-Point Tariff as of the effective date
of this filing. 13 The Companies similarly propose to supersede
NEP's Tariff No. 4 with XXXX Transmission Services, Inc.'s Network
Tariff as of the same date. This will ensure that unaffiliated
customers currently taking transmission service under NEP's Tariff
Nos. 3 and 4 will be taking service under the new tariffs on the
same date that XXXX Trans' affiliates begin to use those tariffs
for their coordination and requirements sales. 12
On October 4, 1994, the Commission approved a settlement in
Docket No. ER 00-000-000 that, among other things, established a
two-year moratorium on changes in the rates, terms, and conditions
of NEP's Tariff No. 8. In recognition of that moratorium, NEP and
XXXX Trans propose to close Tariff No. 8 to new customers on the
effective date of the tariffs tendered today and to supersede
Tariff No 8 with the new tariffs effective November 1, 1996,
following the expiration of that moratorium. 15
_____________
13 A number of NEP's transmission service contracts are tied
to the terms, conditions and rates of NEP's Tariff No. 3. When
NEP's Tariff No. 3 is superseded by XXXX Trans' Point-to-Point
Tariff, customers under such contracts will take service under the
new Point-to-Point Tariff. See Attachment D to this letter.
14 XXXX Trans is proposing to roll into its Network Tariff
rate the costs of facilities built, operated and maintained for
the benefit of its Network Customers. Accordingly, customers now
making support payments for those facilities would be relieved of
those payments to avoid double counting. The customers whose
support agreements would be superseded or amended to reflect the
rolled-in approach are listed on Attachment D to this filing
letter.
Effect of This Filing on NEP's Existing Wholesale Requirements
Tariff
As noted above, NEP's wholesale requirements customers will
begin taking service under XXXX Trans' Network Tariff upon its
effective date. 16 To ensure that the initiation of network
service from XXXX Trans does not result in a rate increase to
those customers (or to their retail customers), NEP is filing a
proposed amendment to Schedules II-A and II-B of its wholesale
requirements tariff. Under the amendment, NEP will credit its
requirements customers with the charges they are required to pay
XXXX Trans for network integration transmission service. This
crediting mechanism permits the unbundling of NEP's requirements
service to begin, while complying with the base rate moratorium
and settlement approved by the Commission's Order in Docket Nos.
ER95-267-000, et al. This crediting mechanism will operate through
the effective period of the W-95 rates. Because NEP will be
crediting its Tariff No. 1 customers for the full amount of their
charges from XXXX Trans during this period, NEP requests that the
Commission affirmatively approve a reconciliation mechanism
whereby NEP may recover from its customers any amounts refunded to
them by XXXX Trans upon final disposition of XXXX Trans' rates by
the Commission. Xx. Xxxxxxxxxxx more fully describes the
operation of the crediting mechanism and a corresponding
reconciliation measure in her attached testimony. NEP
specifically requests that the Commission affirmatively approve
the reconciliation and refund measures to ensure that NEP is held
harmless and that any reconciliation is not deemed retroactive
rate-making. If the Commission rules otherwise, then both NEP and
XXXX Trans request that XXXX Trans' rates become effective for
NEP's Tariff No. 1 customers, prospectively, on the date that XXXX
Trans' final approved rates are allowed to go into effect.
___________________
15 Pursuant to its terms, one transmission contract tied to
NEP's Tariff No. 8 will be superseded by Firm Point-to-Point
Transmission Service as of the effective date of the Point-to-
Point Tariff. See Attachment X. XXXX Trans' Network Tariff will
also supersede the terms, conditions and rates of NEP's
distribution agreement with MMWEC for delivery of NYPA Power upon
the effective date of the Network Tariff.
16 In the Transmission and Distribution Support Agreement,
NEP assigns to XXXX Trans NEP's transmission obligations under
Tariff No. 1.
Real-Time Information Network Participation
On February 2, 1996, the New England Power Pool Executive
Committee authorized the development of a regional Real-Time
Information Network (RIN) to fulfill the anticipated obligations
of NEPOOL Participants under the Final Rule to be issued by the
Commission in Docket No. RM95-9-000. The NEPOOL Executive
Committee furthermore voted to permit non-participants to
participate in the NEPOOL RIN. XXXX Trans plans to fulfill its
obligations by posting notice of its transmission availability,
terms, conditions, and rates on this regional RIN. Like all other
customers of XXXX Trans, XXXX Companies' affiliates will be
required to obtain transmission information and may make inquiries
and book firm and non-firm transmission capacity via the RIN.
Until the RIN is functioning, the XXXX Companies' affiliates will
employ the same procedures used by other customers to inquire
about and reserve transmission services. XXXX Trans will closely
adhere to the standards of conduct and due diligence contained in
the two tariffs to prevent the appearance or occurrence of
discriminatory dealings in transmission matters.
Effective Date; Request for Waiver of Notice Requirements
Except as otherwise noted below, XXXX Trans and its
affiliates affected by this filing propose an effective date for
the tariffs, service agreements, and other agreements filed
herewith which shall be the first day of the calendar month
following the later of (1) 60 days from the date of this filing or
(2) five (5) business days following SEC approval of the
establishment of XXXX Transmission Services, Inc. As explained
above, XXXX Trans and NEP propose to supersede NEP's Tariff No. 3
with XXXX Trans' Point-to-Point Tariff (for non-firm service), and
NEP's Tariff No. 4 with XXXX Trans' Network Tariff, as of the same
effective date. NEP proposes the same effective date for its
transmission-related amendments to its Tariff No. 1. XXXX Trans
and NEP also propose to cease offering service under NEP's Tariff
No. 8 as of the same date but request waiver of the Commission's
notice requirements to supersede Tariff No. 8 as of November 1,
1996. The companies also request that service agreements
permitting current Tariff No. 8 customers to take Firm Point-to-
Point or Network service under the proposed tariffs be made
effective as of November 1, 1996.
Cost Support; Request for Waivers
The XXXX Companies make this filing in advance of the
issuance of the Final Rule in Docket No. RM95-8-000, as encouraged
by the Commission in its "Further Guidance Order," issued March
29, 1995 in American Electric Power Service Corp., 70 FERC
transmission service rates in this filing use formula rates which
rely on historical data, XXXX Trans and the XXXX Companies request
waiver of the requirement that Period II data be filed in support
of this filing. Furthermore, since neither Narragansett nor
Granite State would have derived any revenues from the use of
their distribution facilities by XXXX Trans during Period I,
neither company is providing Period I Statements AA - BM except
for Statement BK as required under Section 35.13(a)(2).
Future Filings
Although the documents which are the subject of this filing
constitute a major step toward the development of a more
competitive electric market and the complete unbundling of the
XXXX Companies' transmission and generation functions, additional
future filings will be tendered to meet the objective of fully
competitive generation and open access transmission for retail
markets. Accordingly, the XXXX Companies anticipate the following
filings with the Commission at various times in the future: 17
Modified Transmission Service Agreements between XXXX
Transmission Services, Inc. and Granite State, Mass.
Electric and Narragansett upon the successful resolution
of retail restructuring efforts in New Hampshire,
Massachusetts and Rhode Island, respectively;
A power sales tariff seeking permission for New England
Power Company to sell at market-based rates;
An application for Exempt Wholesale Generators status
for New England Power Company and designation of all of
NEP's units as eligible facilities, following the
receipt of necessary state approvals;
A tariff seeking permission for New England Power
Company to sell ancillary services at market-based
rates;
A Notice of Succession, following SEC approval of XXXX
Transmission Services, Inc., indicating that the newly-
formed subsidiary is adopting all relevant rate
schedules of New England Power Company.
As the evolution of more competitive markets continues in New
England, the XXXX Companies may make additional filings with the
Commission.
Documents Enclosed and Communications
In addition to the proposed Tariffs and Agreements listed on
pages 2 through 4 of this transmittal letter, six copies of each of
the following documents are enclosed in support of this filing:
- This filing letter;
- Testimony and exhibits sponsored by seven (7) witnesses;
- Exhibits and workpapers supporting the calculation of
the proposed rates, including Statements AA - BM for NEP
and Mass. Electric, and Statement BK for Granite State
and Narragansett;
- Revenue statements showing the anticipated rate effects
on customers under the proposed tariffs compared to the
rates currently in effect under NEP's various tariffs
and contracts to be superseded by the new tariffs;
- A list identifying the parties to whom copies of this
filing have been sent; 18 and
- A form of notice suitable for publication in the Federal
Register.
Courtesy copies of this filing are also included for hand delivery
to Messrs. Xxxxxxx Xxxxxxxxxxx and Xxxx Xxxxxx. In addition, one
copy of this letter is enclosed to be docketed, date- and time-
stamped and returned in the self-addressed, stamped envelope
included in this package.
________________
17 The retail affiliates among the XXXX Companies also
anticipate filings before their respective state commissions in
furtherance of their jurisdictional programs advancing
competition.
Please address any inquiries and correspondence to the following
individuals:
Xxxxx Xxxxxxxx, Esquire Xxxxxxx X. Xxxxx, Esquire
Attorney for the XXXX Companies Xxxxxxx & Berlin
00 Xxxxxxxx Xxxxx 0000 X Xxxxxx, X.X.,
Xxxxxxxxxxx, XX 00000 Xxxxx 000
(508) 389 - 3074 Washington, DC 20007
(000) 000-0000
Respectfully submitted,
s/ Xxxxx Xxxxxxxx
Enclosures
_________________
18 Pursuant to Section 35.2 of the Commission's Rules &
Regulations, 18 C.F.R. section 35.2, the volumes containing
workpapers and revenue statements are not being mailed today to
customers who will be minimally affected by this filing. The XXXX
Companies will promptly send copies to any such customer who
requests them.
