NEW ENGLAND POWER COMPANY
Primary Service for Resale
SUPPLEMENT TO AMENDMENT TO SERVICE AGREEMENT
Dated as of: December 31, 1998
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 Company and the Customer are parties to an Amendment to
Service Agreement dated as of February 1, 1997 approved by the Commission in
Docket ER97-680-000 and amended by an October 1, 1997 filing approved by the
Commission in Docket ER98-6-000 (the Amendment to Service Agreement, as
amended on October 1, 1997 is hereinafter referred to as the "Amendment");
WHEREAS, the Customer expects to have available $21,400,000 as a result
of the accrual of an over-collection in retail rates authorized by the Rhode
Island Public Utilities Commission;
WHEREAS, the Customer now desires to use those funds to make a
prepayment of a portion of the Customer's Contract Termination Charge
obligation to the Company as set forth in the Amendment;
WHEREAS, the Company is willing to accept such prepayment; and
WHEREAS, the Company and the Customer agree that such prepayment of
Contract Termination Charges shall be made in accordance with the terms and
conditions of this Supplement to Amendment to Service Agreement
("Supplement").
NOW, THEREFORE, the Company and the Customer, in consideration of the
mutual agreements set forth herein, agree as follows:
1. All capitalized terms that are used in this Supplement and are not
defined herein, but are defined in the Amendment or in the Tariff, shall have
the meaning there stated.
2. On January 1, 1999, the Customer shall make a payment to the
Company of $21,400,000, to be treated as a prepayment with a pre-tax return of
12.16 percent on the unreturned balances towards the Customer's Contract
Termination Charge obligation to NEP. Such prepayment shall be used to reduce
the Fixed Component of the Contract Termination Charge over two years.
Specifically, the Company will reduce its Base Contract Termination Charge to
Narragansett in 1999 and 2000 by a Prepayment Factor of $0.0023 (0.23 cent or
2.3 xxxxx) per kilowatt-hour to reflect the Customer's prepayment. The
attached Schedule 1 provides the derivation of the Prepayment Factor for 1999
and 2000 after accounting for the Customer's prepayment in the manner
described in this paragraph. The difference between the estimated revenue
reduction in Schedule 1 and the actual revenue reduction produced by the
implementation of the $0.0023 Prepayment Factor as applied to actual kilowatt-
hour deliveries shall be reflected in the Reconciliation Account.
3. This Supplement shall take effect as of January 1, 1999, or such
other date as permitted by the Commission.
4. Except as expressly modified by this Supplement, all terms of the
Amendment shall remain in full force and effect.
5. The rights conferred and obligations imposed on the Customer and
the Company under this Supplement shall be binding on or inure to the benefit
of their successors in interest or assignees as if each such successor or
assignee was itself a signatory hereto.
IN WITNESS WHEREOF, the parties have executed this Supplement to
Amendment to Service Agreement as of the date first above written.
NEW ENGLAND POWER COMPANY
By_________________________________
Its_________________________________
THE NARRAGANSETT ELECTRIC COMPANY
By_________________________________
Its_________________________________
