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<SEC-DOCUMENT>/in/edgar/work/0000072741-00-000216/0000072741-00-000216.txt : 20001023
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ACCESSION NUMBER:		0000072741-00-000216
CONFORMED SUBMISSION TYPE:	U-1/A
PUBLIC DOCUMENT COUNT:		5
FILED AS OF DATE:		20001020

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NORTHEAST UTILITIES SYSTEM
		CENTRAL INDEX KEY:			0000072741
		STANDARD INDUSTRIAL CLASSIFICATION:	 [4911
]		IRS NUMBER:				042147929
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		U-1/A
			SEC ACT:		
			SEC FILE NUMBER:	070-09697
			FILM NUMBER:		743504
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		174 BRUSH HILL AVE
				CITY:			WEST SPRINGFIELD
				STATE:			MA
				ZIP:			01090-0010
				BUSINESS PHONE:		4137855871
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		107 SELDON ST
					CITY:			BERLIN
					STATE:			CT
					ZIP:			06037-1616
</MAIL-ADDRESS>
</FILER>
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<DOCUMENT>
<TYPE>U-1/A
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>AMENDMENT NO. 3 TO FORM U-1
<TEXT>






                                                           FILE NO. 70-9697

                             SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549
                                     AMENDMENT NO. 3
                                           TO
                                        FORM U-1
                             APPLICATION/DECLARATION UNDER THE
                         PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
                     WITH RESPECT TO THE ISSUANCE OF RATE REDUCTION BONDS
                                   AND RELATED TRANSACTIONS


The Connecticut Light and Power         Western Massachusetts Electric Company
Company                                 174 Brush Hill Avenue
107 Selden Street                       West Springfield, MA 01090
Berlin, CT 06037





                          Public Service Company of New Hampshire
                                    1000 Elm Street
                                   Manchester, NH 03101
                 (Names of companies filing this statement and addresses of
                              principal executive offices)

                                  NORTHEAST UTILITIES
                        (Name of top registered holding company)
                                   Cheryl W. Grise,
                     Senior Vice President, Secretary and General Counsel
                            Northeast Utilities Service Company
                                    107 Selden Street
                                    Berlin, CT 06037
                          (Name and address of agent for service)

The Commission is requested to mail signed copies of all orders, notices
and communications to:

Jeffrey C. Miller, Esq.
Assistant General Counsel
Northeast Utilities Service
Company
P.O. Box 270
Hartford, CT 06141-0270

Randy A. Shoop
Assistant Treasurer - Finance
Northeast Utilities Service
Company
P.O. Box 270
Hartford, CT 06141-0270


Richard J. Wasserman, Esq.
Day, Berry & Howard LLP
CityPlace I
Hartford, CT 06103-3499


I.   The application/declaration in this file, as amended (the "Application")
is amended as follows:

A.   By replacing paragraph 42 with the following:

  42.  CL&P and WMECO are seeking approval for their proposed
transactions from the Connecticut and Massachusetts public utilities
commissions, respectively, and PSNH has obtained approval from the New
Hampshire public utilities commission for its proposed transaction.<FN 20>
PSNH has also obtained approval from the Maine public utilities
commission for its proposed transaction.

____________________
[FN] 20 See supra note 6.


B.    By replecing paragraph 44 with the following:

   44.  Exhibits.  Each Utility undertakes to file all material
financing documents relating to its RRB transaction with the certificate
filed pursuant to Rule 24 under the Act after the consummation of such
transaction.  The following exhibits are filed with this Application
(asterisked (*) items were filed with the original Application; double
asterisked (**) items were filed with Amendment No. 1 to this
Application; triple asterisked (***) items were filed with Amendment No.
2 to this Application; quadruple asterisked items (****) are filed with
this Amendment No. 3).

C 1  Registration Statement on Form S-3 for the CL&P RRBs (to be filed by
     further amendment)

C 2  Registration Statement on Form S-3 for the WMECO RRBs (to be filed by
     further amendment)

C 3  Registration Statement on Form S-3 for the PSNH RRBs (to be filed by
     further amendment)

*D 1.1 Application of CL&P to the Connecticut Department of Public Utility
       Control for Approval of the Issuance of Rate Reduction Bonds and Related
       Transactions

D 1.2  Financing Order of the Connecticut Department of Public Utility Control
       (to be filed by further amendment)

*D 2.1 Petition of WMECO to the Massachusetts Department of Telecommunications
       and Energy for Approval of the Issuance of Electric Rate Reduction Bonds

D 2.2  Financing Order of the Massachusetts Department of Telecommunications
       and Energy (to be filed by further amendment)

*D 3.1  PSNH's Settlement Agreement (Exhibit 10.2, NU Form 10-Q for the Quarter
        ended June 30, 1999, File No. 1-5324)

***D 3.1.1 PSNH's Conformed Settlement Agreement

***D 3.1.2  PSNH's Motion to the New Hampshire Public Utilities Commission for
            Findings of Fact and for Issuance of Finance Order

*D 3.2.1  PSNH's Settlement Order

****D 3.2.2  Finance Order of the New Hampshire Public Utilities Commission

****D 3.2.3 Order of the New Hampshire Public Utilities Commission Addressing
            the Conformed Settlement Agreement

****D 3.3.1  Application of PSNH to the Maine Public Utilities Commission for
             the Approval of Reorganization

****D 3.3.2  Maine Public Utilities Commission Approval of Reorganization

***F   Opinion of Counsel

**G  Financial Data Schedules

*H  Proposed Form of Notice

***H 1  Amended and Restated Proposed Form of Notice


II.  The following exhibits are filed herewith (exhibit numbers correspond to
those contained in the Application):

D 3.2.2 Finance Order of the New Hampshire Public Utilities Commission.

D 3.2.3 Order of the New Hampshire Public Utilities Commission Addressing the
        Conformed Settlement Agreement.

D 3.3.1 Application of PSNH to the Maine Public Utilities Commission for the
        Approval of Reorganization.

D 3.3.2 Maine Public Utilities Commission Approval of Reorganization.


                                   SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this
statement to be signed on their behalf by the undersigned thereunto duly
authorized.

THE CONNECTICUT LIGHT AND POWER COMPANY

By:  /s/Randy A. Shoop

Randy A. Shoop
Treasurer

WESTERN MASSACHUSETTS ELECTRIC COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

By:  /s/Randy A. Shoop

Randy A. Shoop
Assistant Treasurer - Finance

Date:  October 20, 2000


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>EXHIBIT D 3.2.2 - NHPUC FINANCE ORDER
<TEXT>


 EXHIBIT D 3.2.2



                           Public Utilities Commission


                                    DE 99-099

                                 PSNH  Proposed
                             Restructuring Settlement

                       Order Addressing Financing Issues

                               Order No. 23,550

                               September 8, 2000





























                        Douglas L. Patch, Chairman
                       Susan S. Geiger, Commissioner
                       Nancy Brockway, Commissioner


                                 DE 99-099

                   PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

                     Proposed Restructuring Settlement
                     Order Addressing Financing Issues

                         O R D E R   N O.  23,550

                              September 8, 2000

     APPEARANCES:  Robert A. Bersak, Esq., Gerald M. Eaton, Esq. and Sulloway
& Hollis by Martin L. Gross, Esq. for Public Service Co. of New Hampshire;
Foley, Hoag & Eliot, LLP by James K. Brown, Esq., Stephen J. Judge, Esq. and
Wynn E. Arnold, Esq. of the New Hampshire Attorney General's Office for the
Governor of New Hampshire, the Governor's Office of Energy and Community
Services and the New Hampshire Attorney General; Mark W. Dean, Esq. of Dean,
Rice & Kane, for New Hampshire Electric Cooperative; Seth Shortlidge, Esq.
and Lisa Shapiro of Gallagher, Callahan & Gartrell, for Wausau Papers; Rep.
Jeb Bradley, member of the Legislature, pro se; Rep. Gary Gilmore, member of
the Legislature, pro se; Connie Rakowsky, Esq. of Orr & Reno P.A. for the
Granite State Hydro Association and individual hydroelectric facilities;
David W. Marshall, Esq. for the Conservation Law Foundation; John Ryan, Esq.
for the Community Action Program; Alan Linder, Esq. of New Hampshire Legal
Assistance, for the Save Our Homes Organization; James Rubens for THINK - New
Hampshire; Pentti Aalto for PJA Energy Systems Designs; Peter H. Grills, Esq.
and Elizabeth I. Goodpaster, Esq. of O'Neill, Grills & O'Neill, for the City
of Manchester; Susan Chamberlin, Esq. of Donahue, Tucker & Ciandella, for the
City of Concord; Carlos A. Gavilondo, Esq. for Granite State Electric/New
England Power Company; Robert A. Olson, Esq. of Brown, Olson, and Wilson
representing six wood-fired power plants; Steven, V. Camerino, Esq. of
McLane, Graf, Raulerson & Middleton, for Great Bay Power Corp. and the City
of Claremont; Timothy W. Fortier for the Business & Industry Association of
N.H.; James A. Monahan and Andrew Weissman, Esq. of Morrison & Foerster,
L.L.P. for Cabletron Systems, Inc.; Joshua L. Gordon, Esq. and Robert A.
Backus, Esq. For the Campaign for Ratepayers' Rights; Robert Upton II, Esq.
of Upton, Sanders & Smith for the Towns of Bow, New Hampton, Gorham,
Hillsboro and Franklin; Robert P. Cheney, Jr., Esq. of Sheehan Phinney Bass +
Green P.A. representing JacPac Foods, Ltd.; Mary Metcalf for Seacoast Anti-
Pollution League; James T. Rodier, Esq. for Consumers Utility Service
Cooperative and Freedom Partners, LLC; Michael W. Holmes, Esq. and Kenneth
Traum of the Office of Consumer Advocate representing Residential Ratepayers;
John E. McCaffrey, Esq. of Morrison & Hecker, LLP for PUC Staff advocates;
Lynmarie Cusack, Esq. of the NH Public Utilities Commission for PUC
Settlement Staff, and Larry Eckhaus, Esq. for the Staff of the New Hampshire
Public Utilities Commission.


                              I.     INTRODUCTION

     This Order addresses Public Service Company of New Hampshire's ("PSNH")
Motion for Findings of Fact and Issuance of a Finance Order, filed with the
New Hampshire Public Utilities Commission ("Commission") in this docket on
June 23, 2000.  This Motion, and its accompanying proposed finance order, was
filed in response to the Commission's directive to PSNH to file a request for
a finance order pursuant to which rate reduction bonds would be issued, and
to include a proposed form of order.  See General Counsel letter of June 12,
2000.

     The scope of this Order is confined to addressing the relief requested
in PSNH's Motion.  The companion order issued today in this docket, Order No.
23,549, addresses all other remaining issues in this case, and contains a
more complete recitation of the procedural history and positions of the
parties.

     As stated in the Motion, the securitization by PSNH of certain of its
stranded costs as contemplated by (i) RSA Chapter 369-A, (ii) 1999 N.H. Laws
289, (iii) the "Agreement to Settle PSNH Restructuring" dated August 2, 1999
requires the prior approval by the Commission in the form of a finance order.
PSNH asserts that the finance order must contain provisions that maximize the
likelihood of achieving "triple-A" ratings on the RRBs and enhance the
marketability of the Rate Reduction Bonds ("RRBs").  Accordingly, PSNH
included in its filing a proposed detailed description (the "Transaction
Description") of PSNH's proposed RRB transaction (the "RRB Transaction"),
together with requested findings (the "Findings") and orders and approvals
(the "Orders and Approvals").

     PSNH requests that the Commission, among other things:

     (i)  approve the issuance of RRBs in an amount not greater than $573
million;

     (ii) establish the charge from which the RRBs will be repaid;

    (iii) approve the organization and capitalization of a special purpose
financing entity, to which the RRB Charge and other related rights
will be sold;

     (iv) provide for the periodic adjustment of the RRB Charge via a true-up
mechanism;

      (v) approve the general structure of the RRB Transaction and terms of
the RRBs;

	(vi) approve the servicing of the RRB Charge by PSNH, as the initial
servicer for the RRB Property, or any successor servicer, under a
servicing agreement;

    (vii) declare that the Finance Order shall be irrevocable as provided in
RSA Chapter 369-B;

   (viii) find the RRB Charge to be just and reasonable; and

     (ix) find and declare the issuance of the Finance Order to be consistent
with the public good.

     Hearings on this matter and the remaining outstanding issues were held
on July 6 and 7, 2000, during which PSNH presented a panel of witnesses who
testified in support of its Motion.  An opportunity to cross-examine the
panel and provide responsive testimony was provided to all parties.  Other
than the issue of the appropriate level of securitization, which is addressed
by the Commission in today's companion order, objections to the relief
requested by PSNH's Motion were raised in the post hearing briefs filed by
Wausau Papers of New Hampshire ("Wausau") and Great Bay Power Corporation
("Great Bay").

     Wausau objects to PSNH's Motion, including the proposed finance order,
on grounds that it would violate the unambiguous terms of RSA 369-B and
result in an unconstitutionally vague decision.  Wausau argues that PSNH's
description of the procedures and methodologies it is asking the Commission
to approve make it impossible for the Commission to determine with certainty
what it is approving.  Further, it alleges that a finance order with such
vague references to testimony for describing essential terms will be
unconstitutionally vague because it will fail to apprise a person of the
circumstances upon which the RRB charge will be assessed.  Wausau recommends
that the Commission explicitly state the terms, procedures and methodologies
it is approving, and that the Commission should limit the scope of the post
finance order modifications (as a result of negotiations with the rating
agencies) to those outlined in Exhibit F-12.

     Great Bay raises several objections.  First, Great Bay claims that RSA
369-B is unconstitutional, but it does not discuss the issue, asserting that
the Commission has previously determined that it has no jurisdiction to
determine the constitutionality of legislation.

     Second, Great Bay argues that approval of PSNH's finance proposal would
require the Commission to abrogate its responsibility to review the prudence
of the utility's expenditures and result in an improper delegation of
authority to the State Treasurer.  Great Bay points out that PSNH's
securitization proposal seeks broad authority to change the terms of the
proposed transaction, and seeks approval of terms before the specific amounts
or nature of the expenditures are known.  Further, Great Bay submits that the
proposed finance order allows rating agencies to dictate additional
requirements, such as further conditions to be imposed upon a third party
supplier seeking to provide billing services.

     Great Bay argues that RSA 369-B:5, XI, which provides the Treasurer with
oversight authority does not require wholesale abrogation of regulatory
oversight as, it alleges, is proposed by PSNH.  PSNH, according to Great Bay,
is proposing that the Commission improperly divest itself of jurisdiction
with regard to any matters once the finance order is issued, unless and only
if the Treasurer files a complaint.  Great Bay submits that the Treasurer's
role, as proposed by PSNH, is supposed to constitute part of this proceeding,
yet she is not an intervenor, and there is no role provided for any other
party in the oversight process.

     Great Bay also argues that PSNH is requesting that the Commission rule
ex ante that numerous expenditures, agreements and actions yet to be known
(or, in the case of the Servicing Agreement and Administration Agreement yet
to be filed) are reasonable, and that this approach will deny due process for
any of the parties participating in the case.  In a similar vein, Great Bay
argues that PSNH's proposed financing order would result in the Commission's
delegating to private rating agencies numerous important matters that could
affect the terms of the financing transactions being approved, the cost of
those transactions ultimately borne by ratepayers, and the terms on which
competitive suppliers may participate in New Hampshire's electric market.

     On August 28, 2000 the Commission's General Counsel notified the parties
by letter that it was necessary to convene a technical session to address
certain questions and to obtain clarification on certain portions of the
proposed finance order.  The State Treasurer was invited to attend the
session in respect of her obligations under RSA 369-B:5, IX.  Prior to the
technical session, the General Counsel circulated to the parties a revised
draft of the proposed finance order.  The technical session was held on
August 31, 2000.  As part of the technical session, parties were given an
opportunity to submit written comments upon the revised draft proposed
finance order by September 1, 2000.  Written comments were submitted by
Governor's Office of Energy and Community Service ("GOECS"), PSNH, Wausau,
and the State Treasurer.

     As described in greater detail below, we grant PSNH's Motion in most
material respects.  The Commission finds, however, that there is some merit
to the arguments of Wausau and Great Bay concerning the proposed finance
order.  Therefore, the Commission has not approved the form of proposed
finance order originally submitted by PSNH.  The order below, consisting of
the Transaction Description, Findings and Approvals and Authorizations, has
been crafted to more closely adhere to the requirements of RSA Chapter 369-B
with respect to the terms and conditions of rate reduction financing, and
more precisely define the scope of the necessary flexibility PSNH will have
to negotiate the final terms of the bond issuances.   In addition, the
authority and responsibilities of the Commission and the State Treasurer
during and subsequent to the transaction are more clearly spelled out.

                   II.     TRANSACTION DESCRIPTION

A.   The Original Proposed Settlement and the April 19 Order

     The "Agreement to Settle PSNH Restructuring" dated August 2, 1999 (the
"Original Proposed Settlement" or "OPS"), was entered into by and among the
Governor of New Hampshire, GOECS, the Office of the Attorney General, the
Settlement Staff of the Commission, PSNH, and Northeast Utilities ("NU") "to
provide a resolution of all major issues pertaining to PSNH in the electric
industry restructuring proceeding of the Commission in Docket No. DR 96-150,
as well as in the other dockets and pending litigation described in Section
XV" of the OPS.  OPS at 1:11.

     Among its most significant provisions, the OPS provided that the
Commission "will be requested, subject to final action by the Legislature as
provided in 1999 N.H. Laws 289:3, II" to approve the issuance of rate
reduction bonds ("RRBs") to finance a portion of the PSNH's stranded assets.
OPS at 61:1754.  The OPS asserted that: "securitization is a useful tool for
lowering customers' bills and maximizing customer benefits"; it "will allow
PSNH to reduce its cost of capital, thereby significantly reducing rates for
customers"; and it was a "pivotal element of the settlement" accounting for
approximately 4 to 8.2 percentage points of the OPS's proposed 18.3% rate
reduction.  OPS at 60:1709-1718.  NHPUC Order No. 23,443 at 136.

     Securitization is the financing of a specific asset or pool of assets,
through the issuance of securities, frequently referred to as "asset-backed
securities."  For debt service and repayment of principal, these securities
rely solely on the revenue stream underlying the asset or pool of assets,
and, as a result, their ratings are dependent upon the predictability or
volatility of that associated cash flow.  PSNH Witness Englander, Direct
Testimony, Phase I, Ex. 6 (hereinafter "Phase I, Ex.6") at 4:15.

     The parties to the OPS agreed to support legislation that would allow
PSNH to securitize a portion of its stranded costs by issuing RRBs.  OPS at
60:1725.  The OPS provided that passage of acceptable legislation and
successful completion of the proposed RRB issue was a condition to
implementing the agreement.  OPS at 60:1717.

     The OPS also provided that "the New Hampshire State Treasurer, or other
State official designated by the State Treasurer, shall have oversight over
the terms and conditions of the RRB issue, including, but not limited to tax
aspects and such other arrangements to which the parties may mutually agree,
to assure that PSNH exercises fiscal prudence, and achieves the lowest
overall cost for the RRBs."  OPS at 68:1940.

     The OPS stated that the Commission would be requested to approve the
issuance of $725 million of RRBs to securitize a like amount of the following
stranded costs: <FN 1>

Seabrook Over-Market Generating Assets (NAEC)     $506 million

Millstone 3 Over-Market Generating Assets         84 million

Acquisition Premium                                74 million

Acquisition Premium  FAS 109                      44 million

Financing Costs                                    17 million

Total                                             $725 million


    In its Order No. 23,443 dated April 19, 2000 (the "April 19 Order"), the
Commission approved the OPS, subject to the settling parties accepting a
number of conditions.  Among its findings, the Commission, after careful
examination of the record, found that securitization would offer significant
cost savings to PSNH's customers.  April 19 Order at 200.  However, as
prescribed in the April 19 Order, the Commission also found that, because of
their continuing amortization, and as a result of Competition Day ,<FN 2>
occurring on or after July 1, 2000 rather than January 1, 2000 as originally
modeled, the net book balances of the four stranded assets proposed to be
securitized  Seabrook Over-Market Generating Assets (NAEC), Millstone 3
Over-Market Generating Assets, Acquisition Premium, and Acquisition Premium -
FAS 109  will be approximately $37 million less than the balances assumed
and proposed to be securitized in the OPS, as set forth above.  April 19
Order at 202.  Accordingly, the Commission found that the total level of
securitization should be reduced by $37 million, and approved a
securitization level of $688 million, including up to $17 million for
financing costs.  April 19 Order at 283.

     Following the issuance of the April 19 Order, PSNH notified the
Commission of its contingent acceptance of the Commission's conditions for
approval of the OPS.  PSNH Response to Order No. 23,443, filed May 1, 2000.
PSNH responded that it would accept a "cap on securitization to an amount up
to $688 million" and that it would "agree to calculate the maximum amount of
securitization based upon estimated financial results reconciled to our
best-estimate of Competition Day."  PSNH Response at 4. <FN 3>  Attachment A
to PSNH's Response, at page 27, indicated an estimated securitized amount of
$575 million.  The other parties to the OPS notified the Commission of their
acceptance of all of the Commission's conditions.  See "Acceptance of
Conditions by the Governor's Office of Energy and Community Services and
Settling Staff," filed May 1, 2000.

     Requests for Rehearing, Reconsideration or Clarification of the April 19
Order were filed by: the Towns of Bow, Hillsboro, and Gorham, the City of
Franklin and the Village Precinct of New Hampton; Great Bay Power
Corporation; Freedom Partners, L.L.C.; Wausau Papers of New Hampshire, Inc.;
Cabletron Systems, Inc.; the Office of consumer Advocate, on behalf of itself
and EnerDev, Inc., and Granite State Taxpayers, Inc.; the Business & Industry
Association of New Hampshire; and the Campaign for Ratepayers Rights, on
behalf of itself and Granite State Taxpayers, Inc., THINK-NH, and New
Hampshire Public interest Research Group.  These motions are addressed in the
accompanying Order on Rehearing, issued today by the Commission.

     B.    Legislation

1.    1999 N.H. Laws 289

1999 N.H. Laws 289:3, I, effective July 16, 1999, required the
Commission to hold hearings to review any compliance filing under RSA 374-F
or settlement proposal that included a securitization proposal.  It also
required that the Commission, as part of any order addressing the compliance
filing or settlement proposal, make a determination as to: whether the
securitization proposal contained therein will result in benefits to
customers that are substantially consistent with the principles set forth in
RSA 374-F:3, RSA 369-A:1, X and RSA 369-A:1, XI; and, whether the rate
reduction bonds issued pursuant to the securitization proposal would be
successfully traded at favorable rates on the existing securitization market.
The Commission was also authorized to issue an order on a settlement proposal
that included a conditional securitization proposal for legislative review.
Under 1999 N.H. Laws 289:3, II, the Commission was prohibited from permitting
the issuance of rate reduction bonds without legislative authorization.  In
addition, this section provided that any Commission determination regarding
securitization would not create a presumption of legislative approval of the
necessary authorization to use securitization, and that any Commission
conditional order would not become effective until the passage of enabling
legislation.

     2.    2000 N.H. Laws 249

     Following the issuance of the April 19 Order, the General Court enacted
2000 N.H. Laws 249, effective June 12, 2000.  This legislation, among other
things, creates a new chapter  RSA Chapter 369-B  which, in the Declaration
of Purpose and Findings, finds that implementation of the securitization
proposal contained in the OPS, subject to the conditions listed in the April
19 Order, and as further modified by such chapter, will result in benefits to
customers that are substantially consistent with the principles contained in
RSA 374-F:3, RSA 369-A:1, X and RSA 369-A:1, XI.  RSA 369-B:1,VII.

     RSA Chapter 369-B provides a comprehensive framework for stranded cost
securitization and empowers the Commission to issue finance orders approving
securitization, subject to the requirements and conditions set forth therein.

(a)   Limitations on Issuance of RRBs

     The authority of an electric utility to issue RRBs, once approval from
the Commission has been obtained, expires on December 31, 2002.  RSA 369-B:5,
I.  The use of proceeds from the issuance of the RRBs is also strictly
limited: they shall only be applied for the purposes approved in the finance
order.  RSA 369-B:5, II.  RRBs issued according to the provisions of RSA
Chapter B shall not constitute a debt or liability of the state or any
political subdivision thereof, or a pledge of the full faith and credit of
the state or any political division thereof, and shall be payable only from
the funds provided for, as described below.  RSA 369-B:5, IV.  RRBs shall
mature at the times provided in the finance order, but not later than 14
years after Competition Day.  RSA 369-B:5, VIII.

     (b)   Limitation on Aggregate Amount of Securitization, Issuance and
Redemption Cost Recovery With Respect to PSNH

RSA 369-B:3, IV(b) provides that the Commission may only authorize the
issuance of not more than $670 million in rate reduction bonds as part of a
settlement to implement restructuring within the service territory of PSNH.
It also requires that a financing order may not be issued by the Commission
unless it is able to find that PSNH has committed to reducing the maximum
amount of financing costs and costs of any premiums associated with the
retirement of debt and preferred stock that may be recovered from customers
to $15 million.<FN 4>  Pursuant to RSA 369-B:3, V, finance orders issued by
the Commission that are consistent with RSA Chapter 369-B shall become
effective without further action by the General Court.

     (c)   RRB Costs, Charges and Property

     RRB Costs are costs incurred by and obligations of an electric utility,
and designated as such by the Commission, and may include, but not be limited
to: (i) expenditures incurred in respect of generation assets, entitlements
and acquisition premiums, (ii) expenditures incurred in respect to the
buyout, buydown, restructuring, or renegotiation of power purchase
obligations, (iii) expenditures incurred in respect to regulatory assets,
(iv) expenditures incurred to refinance or retire existing debt or existing
equity capital of the electric utility and any costs related thereto, (v)
amounts necessary to recover federal or state taxes actually paid by an
electric utility, which tax liability recovery is modified by the
transactions approved in a finance order issued by the Commission pursuant to
RSA Chapter 369-B, and (vi) reasonable costs, as approved by the Commission,
relating to the issue, servicing, or refinancing of RRBs under the provisions
of RSA Chapter 369-B, including, without limitation, principal and interest
payments and accruals, sinking fund payments, debt service and other
reserves, costs of credit enhancement, indemnities, if any, owed to the State
or the trustee for the RRBs, issuance costs and redemption premiums, if any,
and all other reasonable fees, costs, and charges in respect of RRBs.  RSA
369-B:2, XIV.

     The RRB Charge is the portion of the retail electric service rate
designated to recover RRB Costs.  It is to be assessed on a per kilowatt-hour
basis, shall be non-by-passable, and assessed against all "retail customers"
of the electric utility distribution system taking "retail electric
service."<FN 5>  The RRB Charge must be sufficient to recover all RRB Costs
approved by the Commission, including the payment of principal, premium, if
any, interest, credit enhancement and all other fees costs, and charges of
the RRBs.  RSA 369-B:2, XII; RSA 369-B:4, I, II and IV.  The RRB Charge may
vary by cost of service, by customer class, and between special contract
customers.  RSA 369-B:2, XIII.  The RRB Charge is Part 1 of the stranded cost
recovery charge ("SCRC") described in the OPS and the April 19 Order.   The
RRB Charge is to be adjusted periodically, but not less frequently than
semi-annually nor more frequently than monthly, as specified in the finance
order.  RSA 369-B:4, III.  (See the description of the "True-Up Mechanism"
below).

     RRB Property is an irrevocable vested property right created by the
Commission in a finance order issued under authority of RSA Chapter 369-B.
It includes the right to all revenues, collections, claims, payments, money
or proceeds arising from the RRB Charge authorized to be imposed and
collected pursuant to such finance order.  RSA 369-B:2, XV.  The RRB Property
right shall continue to exist until the RRBs, the RRB Costs and any
arrearages are paid in full.  RSA 369-B:6, I.

     (d)   State Pledge Not to Impair Rights

     Pursuant to RSA Chapter 369-B, the State of New Hampshire has pledged,
contracted and agreed with the owners of the RRB Property and holders of and
trustees for RRBs that neither the State, nor any of its agencies, including
the Commission, will limit, alter, amend, reduce or impair the RRB Charge,
RRB Property, this Finance Order or any rights hereunder or thereunder, or
ownership thereof or security interest therein, until the RRBs, including all
principal, interest, premium, costs and arrearages thereon, are fully met and
discharged, unless adequate provision is made by law for the protection of
the owners, holders and trustees.  RSA 369-B:6, II.

     (e)   Sale of RRB Property

      RRB Property may be sold to an affiliate or one or more financing
entities (hereinafter known as a "special purpose financing entity" or "SPE")
that make that property the basis for the issuance of the RRBs.  RSA 369-B:6,
III.  The sale or transfer of the RRB Property shall be treated as a "true
sale" or absolute transfer, if the parties to the transfer expressly so state
in the governing documentation, and the transaction is approved by the
Commission in a finance order and is made in connection with the issuance of
the RRBs.  RSA 369-B:6, V.  If any interest in RRB Property is sold or
assigned by the utility, the Commission will require the utility to contract
with the SPE that it will continue to operate its system to provide service
to its retail customers, will collect the RRB Charge for the benefit and
account of the SPE, and will remit the amount of the RRB Charge so collected
to the account for the SPE.  RSA 369-B:6, IV.  A SPE or other assignee shall
not be considered an electric utility solely by virtue of its acquisition of
an interest in RRB Property in the manner described above.  Id.

      The characterization of the transfer of the RRB Property as a "true
sale" will not be impaired or negated notwithstanding any contrary treatment
of such transfer for accounting, tax or other purposes.  RSA 369-B:6, V.  The
finance order will remain in effect notwithstanding any bankruptcy,
reorganization or insolvency proceeding involving the transferor of the RRB
Property.  Id.  The interest of the transferee or assignee in the RRB
Property is not subject to setoff, counterclaim, surcharge, or defense by the
electric utility or any other person, or in connection with the bankruptcy of
the electric utility or any other person.  RSA 369-B:6, VIII.

     (f)   Effect of Municipalization

     Pursuant to RSA 369-B:4, VIII, in the event of municipalization of a
portion of PSNH's service territory, the Commission shall, in matters over
which the Federal Energy Regulatory Commission does not have jurisdiction, or
has jurisdiction but chooses to grant jurisdiction to the State, determine,
to a just and reasonable extent, the consequential damages such as stranded
investment in generation, storage, or supply arrangements resulting from the
purchase of plant and property from PSNH and RRB Costs, and shall establish
an appropriate recovery mechanism for such damages.  Any such damages shall
be established, and shall be allocated between the RRB Charge and PSNH's
other rates and charges, in a just and reasonable manner.

     C.   The Conformed Settlement Agreement and the September 8 Order

     In order to comply with the Commission's procedural letter dated June
12, 2000 (the "Procedural Letter"), PSNH and the other parties to the OPS
submitted to the Commission the "Agreement to Settle PSNH Restructuring"
dated August 2, 1999, conformed as of June 23, 2000 (the "Conformed
Settlement Agreement").  The Conformed Settlement Agreement reflects
compliance with the various changes accepted by such parties during the
course of the initial hearings in this matter, the conditions set forth in
the April 19 Order accepted by such parties, and the new conditions and
requirements set forth in RSA Chapter 369-B.

     In its Order No. 23,549, dated September 8, 2000 (the "September 8
Order" and, together with the April 19 Order the "Settlement Orders"), the
Commission approved the Conformed Settlement Agreement and modified the April
19 Order, taking into account, in each case, the enactment into law of RSA
Chapter 369-B.

     D.   Proposed RRB Transaction

     PSNH requests that this Finance Order, among other things, approve the
following aspects of its proposed RRB Transaction, and find that they are
consistent with achieving the highest rating and therefore the lowest cost on
the RRBs.  This proposed structure is subject to certain limited
modifications, as described below, subsequent to the issuance of this finance
order, to allow for negotiations with rating agencies that will assign credit
ratings to the RRBs, tax authorities, and market conditions at the time the
RRBs are issued.  The final structure will be determined at the time the RRBs
are priced, subject to meeting certain requirements regarding the all-in cost
and the weighted average life of the RRBs, the exercise of fiscal prudence
and achievement of the lowest overall cost, and remaining substantially and
materially consistent with the transaction structure described herein and
approved by the Commission.  During the hearings on this matter, PSNH
provided its estimation of the overall cost, calculating an effective rate
7.52 percent on the RRBs assuming a RRB coupon rate of 7 percent, a term of
12 years, overcollateralization of 0.50 percent, 5 percent interest on the
overcollateralization account, ongoing transaction costs of $220,000 per
year, and $17,000,000 of issuance costs (including call premiums to retire
debt and preferred stock).  Phase I, Ex. 66 (Response to HD-08, Q-RR-001).

     As provided in RSA 369-B:5, IX, the State Treasurer shall oversee the
terms and conditions of the RRB issuances.  As provided in RSA 369-B:6, I,
the Commission has the authority to initiate such other proceedings, hold
such other hearings, and take such other actions as may be necessary to
implement, protect, and preserve the value of this finance order, the RRB
Charge specified herein, and the RRB Property.

     Pursuant to the Settlement Orders and RSA 369-B:3, IV(b), PSNH will
securitize not greater than $670 million of its overall stranded costs, minus
$6 million for each month from October 1 to Competition Day, and including
$15 million of financing and debt retirement premium costs.  The maximum
amount of each of the four categories of stranded costs that may be
securitized is as follows:<FN 6>

Seabrook Over-Market Generating Assets (NAEC)     $494 million

Millstone 3 Over-Market Generating Assets          64 million
Acquisition Premium and FAS 109                     97 million

Financing and Debt Retirement Premium Costs         15 million

Total                                             $670 million


     PSNH will recover such amount  together with the other, ongoing RRB
Costs  from its retail customers through an RRB Charge.  PSNH's right to
collect the RRB Charge is irrevocable as provided in RSA 369-B:3, II, and the
charge itself is non-bypassable to PSNH's retail customers pursuant to RSA
374-F:3, XI(d), RSA 369-B:2, XIII, and RSA 369-B:4, IV.  The RRB Property is
the principal asset securing the RRBs and represents a continuously existing
current and irrevocable vested property right created pursuant to RSA
369-B:6, I.

     1.   Formation/Capitalization of SPE and Sale of RRB Property

     PSNH will cause the organization of a bankruptcy-remote SPE as a
Delaware limited liability company authorized to acquire RRB Property and to
issue RRBs.  Phase I, Ex. 6 at 17:25;  Tr. 7/6/00 at 235:18.  As a limited
liability company, it will be wholly-owned by PSNH.  In order for the SPE to
remain "bankruptcy-remote" from PSNH, the fundamental organizational
documents of the SPE shall impose significant limitations upon its activities
and the ability of PSNH to take actions as the holder of the equity interest
therein.  The SPE shall be formed for the limited purpose of acquiring the
RRB Property and Other SPE Collateral (defined below) and issuing and selling
the RRBs.  It shall not be permitted to engage in any other activities, and
shall have no assets other than the RRB Property and Other SPE Collateral.

     The SPE shall be managed by a board of managers, trustees or directors,
with rights and authority similar to that of a board of directors of a
corporation.  As long as the RRBs remain outstanding, PSNH shall be required
to cause the SPE to have at least two managers, trustees or directors with no
affiliation with PSNH, out of a total board of not more than five members.
Without the consent of these independent parties, the SPE shall be unable to
(a) amend provisions of fundamental organizational documents which ensure the
bankruptcy-remoteness of such SPE, (b) institute bankruptcy or insolvency
proceedings or to consent to the institution of bankruptcy or insolvency
proceedings against it, or (c) dissolve, liquidate or wind up the SPE.  Other
provisions may also be included to support the bankruptcy-remote character of
the SPE as required by the rating agencies.

     PSNH will capitalize the SPE in an amount anticipated to be at least
0.50% of the initial principal balance of RRBs.  Phase I, Ex. 6 at 17:29.
This capitalization is required in order that PSNH may treat the RRB issuance
by the SPE as debt for tax purposes, and it also provides a source of credit
enhancement.  The SPE will enter into an administration agreement (the
"Administration Agreement") with PSNH, pursuant to which PSNH shall perform
administrative services and provide facilities for the SPE to ensure that it
is able to perform such day-to-day operations under the RRB Transaction
documents.  A draft of the Administration Agreement was provided by PSNH in
response to Q-RR-004, Ex. F-17.  The Administration Agreement incorporates
provisions to ensure that PSNH will be paid a fee (the "Administration Fee")
as consideration for the performance of such services and providing such
facilities, as described in Attachment 2 to the Issuance Advice Letter (as
defined below).

     PSNH shall sell all of its rights in the RRB Property to the SPE,
expressly stating in the transfer's governing documentation that it is a sale
or other absolute transfer from PSNH to the SPE.   Pursuant to RSA 369-B:6,
V, this transfer shall be treated as an absolute transfer of all of PSNH's
right, title and interest to the SPE, as a true sale.  As an absolute
transfer or true sale of RRB Property to the bankruptcy-remote SPE, and as
provided in RSA 369-B:6, VIII, in the event of a PSNH bankruptcy, the RRB
Property owned by the SPE will not become a part of the PSNH bankruptcy
estate and PSNH creditors will have no recourse to the RRB Property or RRB
Charge.  Phase I, Ex. 6 at 18:10.

     2.   Issuance of RRBs

     The SPE will issue and sell RRBs to capital market investors in one or
more series, each of which may be offered in one or more classes having a
different principal amount, term, interest rate and amortization schedule.
Phase I, Ex. 6 at 19:4-12.  The form, interest rate (whether fixed or
variable), amortization schedule, classes, number and determination of credit
ratings and other characteristics of RRBs will be determined by PSNH at or
before the time of pricing based on then-current market conditions, with the
objective being to achieve the all-in lowest cost financing possible, while
remaining consistent and in accord with the terms and conditions of the
Conformed Settlement Agreement, the Settlement Orders and RSA Chapter 369-B.
Under certain circumstances, the RRBs may be subject to redemption prior to
maturity and may be refinanced through a subsequent issuance of RRBs to the
extent such refinancing would result in a lower interest cost associated with
the RRBs refinanced.  Any such refinancing would require a new finance order.
The all-in cost of the RRBs, calculated in accordance with Exhibit 1 attached
to this Finance Order, shall be at least 100 basis points less than PSNH's
Pre-Tax Revenue WACC (as defined in Exhibit 2 attached to this Finance Order)
as of the date the RRBs are priced.  In addition, the weighted average life
of all series of RRBs, calculated in accordance with Exhibit 3 attached to
this Finance Order, shall be not less than 5 years and not more than 10
years.  The State Treasurer, with input and advice from such advisors as she
may select, shall oversee the development and determination of the final
structure, documentation and terms of the RRBs, and shall notify PSNH and the
Commission, as provided in this Finance Order, of the results of her
oversight and her conclusions with respect thereto.  Upon final determination
of all terms of the RRBs, and prior to their issuance, PSNH will file an
issuance advice letter substantially in the form of Attachment MAE-1 to Phase
I, Ex.6 (the "Issuance Advice Letter").<FN 7>

     The RRBs will be non-recourse to PSNH and its assets, and, as provided
in RSA 369-B:5, IV, shall not be secured by a pledge of the general credit,
full faith or taxing power of the State of New Hampshire or any agency or
subdivision of the State of New Hampshire.  The RRBs will be secured by the
assets of the SPE, including the RRB Property as well as all other assets of
the SPE (the "Other SPE Collateral").  The Other SPE Collateral includes (i)
the rights of the SPE under all RRB Transaction documents such as the
purchase agreement by which the SPE acquires all rights in the RRB Property
(including any interest rate swap agreements or other hedging agreements
entered into with respect to any variable rate RRBs), and including the
servicing agreement (the "Servicing Agreement") by which PSNH, or any
successor servicer, acts as servicer for the RRB Property (the "Servicer"),
(ii) the Collection Account (as described below) and funds held therein,
including the capital of the SPE, and (iii) certain investment earnings on
amounts held in the Collection Account.

     It is expected that the RRBs will be rated by one or more recognized
rating agencies.  The targeted ratings on the RRBs will be triple-A.

     Because each class of RRBs will likely receive principal payments at
different times, each will have different expected and legal final maturity
dates.  The RRBs will have legal final maturities not longer than 14 years,
in accordance with RSA 369-B:5, VIII, with expected final maturities no more
than 12 years from the date of issuance.

     The RRBs are expected to be sold at or near par value and will not in
any event be sold for more than par value.  Bondholders will receive interest
payments on the RRBs not less frequently than semiannually.  The RRBs will
not be subordinated to the claims of any creditors or the equity owner of the
SPE (other than for payments of trustee, servicing, and other specified
transaction-related fees).

     RRBs will be repaid through the collection of the RRB Charge from all
retail customers, by PSNH or any successor to the PSNH distribution system or
any other successor Servicer.  The SPE will transfer the proceeds from the
issuance of the RRBs, net of its transaction expenses, if any, to PSNH as
consideration for the transfer of the RRB Property to the SPE.

     If variable rate RRBs are issued, the SPE shall enter into an interest
rate swap agreement or other hedge arrangement whereby the SPE would make
fixed payments to a counterparty, and the counterparty would make variable
rate payments to the SPE who would remit or credit such amounts to RRB
holders.  In this case, the fixed rate payments would be used to calculate
the RRB Charge.  This protects the SPE and retail customers against the risk
that interest rate fluctuations would cause variable rates to exceed the
fixed rates that were used to calculate the RRB Charge.  To the extent that
the variable rate of the RRBs ever exceeds the fixed rate that was used to
calculate the RRB Charge, such a mechanism will absorb the rate increase that
would otherwise be required to fully pay the interest on the RRBs.  Phase I,
Ex. 6 at 22:20.  The RRBs may only be variable-rate instruments if such
issuance will result in a lower all-in cost associated with the RRBs.  Id. at
22:14.

     3.   The RRB Charge

     The RRB Charge will be calculated and set at levels intended to provide
for the full recovery of payments of interest, principal and premium, if any,
on the RRBs, in accordance with the expected amortization schedule determined
at the time of offering, any credit enhancement, including
overcollateralization, and any ongoing related fees, costs, and expenses
(including, but not limited to, periodic rating agency fees, accounting fees,
legal fees, the Servicing Fee, the Administration Fee, trustee fees,
contingent indemnity obligations in the RRB Transaction documents, servicer
and trustee expenses and any operating expenses of the SPE), based upon
assumptions including sales forecasts, payment and charge-off patterns, and
lags between RRB Charge billing and collection by the Servicer (the required
periodic payment of such, including deficiencies on past due amounts for any
reason, the "Periodic RRB Payment Requirements" and collectively, the "Total
RRB Payment Requirements"), calculated pursuant to the methodology set forth
in the Issuance Advice Letter.  Phase I, Ex. 6 at 24:26 and 25:9.  Prior to
the issuance of each series of RRBs, PSNH will file an Issuance Advice Letter
with the Commission, which will set forth the final structure and repayment
terms of the RRB Transaction, the total principal amount and pricing of the
RRBs, the initial RRB Charge, the overcollateralization amount (described
below) and targeted transaction subaccount balances (described below), the
capital contribution amount, the frequency of the true-ups and dates of
true-up filings and the actual transaction costs.  Such filing is not a
condition to the authority to issue RRBs.

     The RRB Charge is expected to be collected over 12 years such that the
principal and interest and other costs associated with RRBs are fully paid by
the end of the 12th year.  However, in the event that the RRBs have not been
fully repaid by the end of the 12th year, the RRB Charge may be billed and
collected for an additional 2 years (or, if earlier, through the date on
which the RRB Costs have been fully paid).  This additional period of up to 2
years is a form of credit enhancement that helps achieve triple-A ratings on
the RRBs and which is expected to have no cost to retail customers (i.e., in
the expected case, the RRBs are paid in 12 years).  Tr. 7/6/00 at 237:11.

     As provided in RSA 369-B:4, V, the RRB Charge will be included as a
component of the unbundled SCRC line item on a retail customer's bill and
will be footnoted as such and may include reference to it being sold to the
SPE.

     4.   Servicing of RRBs

     After the issuance of the RRBs, PSNH will act as the Servicer for the
RRB Property on behalf of the SPE, and will be responsible for calculating,
billing, collecting, and remitting the RRB Charge.  RSA 368-B:6,  IV.  PSNH,
therefore, will carry out billing and collection activities both as Servicer
with respect to the RRB Charges' on behalf of the SPE and RRB holders' and as
principal with respect to its own charges to be paid by such customers,
including Part 2 and Part 3 of the SCRC.  As Servicer, PSNH will also be
obligated to retain all books and records regarding the RRB Charge, subject
to the right of the SPE, and the trustee for the RRBs and the Commission to
inspect those records.  PSNH may not resign as Servicer or transfer its
servicing obligations (except to a successor to its distribution system),
although the RRB holders may remove PSNH as Servicer and appoint a successor
Servicer, subject to the approval of the Commission, under the Servicing
Agreement pursuant to this Finance Order, RSA 369-B:6, I, and the RRB
Transaction documents.

     As consideration for its servicing responsibilities, PSNH or any
successor Servicer will receive a market-based periodic servicing fee (the
"Servicing Fee"), as described in Phase I, Ex. 6, which will be recovered
through the RRB Charge.  The Servicing Fee will be equal to 0.25% of the
outstanding principal balance of the RRBs if PSNH is the Servicer.  For any
successor Servicer, the Servicing Fee will be no more than 1.5% of the
outstanding principal balance of the RRBs if the successor Servicer is not
billing the RRB Charge in conjunction with other charges.  If the successor
Servicer is billing the RRB Charge in conjunction with other electric service
charges, then the Servicing Fee payable to such successor Servicer will be
0.25% of the outstanding principal balance (equal to the fee payable to PSNH
as initial servicer).  PSNH (or any successor Servicer) will bill and collect
the RRB Charge from PSNH's retail customers.  Phase I, Ex. 6 at 34:5-22.

     In accordance with RSA 369-B:4, IV, any retail customer that fails to
pay any RRB Charge will be subject to disconnection of service to the same
extent that such customer would, under applicable law and regulations, be
subject to disconnection of service for failure to pay any other charge
payable to an electric utility.

     PSNH or any successor Servicer will periodically remit (as frequently as
required by the rating agencies but not less frequently than monthly) actual
collections of RRB Charges to the SPE.  PSNH testified that it anticipated
being required by the rating agencies to remit such actual collections of the
RRB Charge to the SPE on a daily basis. Tr. 10/29/99 at 233:14.  To the
extent PSNH or any successor Servicer may be permitted to remit such RRB
Charge collections to the SPE less frequently than daily, it may be required
by the Commission to provide data showing the calculation of the customer
daily remittances, timing of remittances to the SPE and the then applicable
short-term interest rate to determine the amount of income earned by PSNH or
its successor in its capacity as Servicer.  Such income may be imputed in
calculating and reconciling the SCRC pursuant to Section V.B.4 of the
Conformed Settlement Agreement.

     To the extent estimation of  collections of the RRB Charge is required,
PSNH will design a methodology that will be satisfactory to the rating
agencies, and which will approximate most closely actual collections.  The
SPE will use the RRB Charge remittances to make payments of Periodic RRB
Payment Requirements.  In accordance with RSA 369-B:7, VI and VIII, in the
event of default by any Servicer in payment of the RRB Charges to an SPE, the
Commission will, upon application by (a) the trustees or holders of the RRBs,
(b) such SPE or its assignees or (c) pledgees or transferees of the RRB
Property, order the sequestration and payment to or for the benefit of such
SPE or such other party of revenues arising with respect to the RRB Property.
This will provide additional certainty that the RRB Charges will benefit the
owner of the RRB Property and serve to enhance the credit quality of the
RRBs.  Phase I, Ex. 6 at 34:30.

     Unless a successor Servicer is not billing the RRB Charge in conjunction
with other charges, the Servicer will allocate amounts collected from each
retail customer on a pro rata basis among the SCRC and the Delivery charge,
system benefits charge, energy consumption tax, Hydro-Quebec support
payments, and, if applicable, the transition or default service charges as
these charges are identified in Section V of the Conformed Settlement
Agreement. <FN 8>  Such amounts so allocated to the SCRC shall, in accordance
with the Conformed Settlement Agreement, in turn be allocated pro rata among
the RRB Charge, or Part 1 of the SCRC, and to any remaining portion of the
SCRC not the subject of a finance order (i.e., Parts 2 and 3 of the SCRC, as
described in the Conformed Settlement Agreement).

     5.   Third Party Suppliers

     The Commission shall not permit, approve or require the billing,
collection and remittance of RRB Charges by a Third Party Supplier (a "TPS")
within the PSNH service territory for remittance to PSNH as Servicer (or to
any successor Servicer), in whole or in part, unless the following minimum
requirements apply:

  The TPS must provide PSNH (or any successor Servicer) with total
monthly kWh usage information in a timely manner for the Servicer to
fulfill its obligations, as such information is the basis of such
remittance.

  PSNH (or any successor Servicer) will be entitled, within seven days
after a default by the TPS in remitting any RRB Charges billed, to
assume responsibility for billing all charges for services provided by
PSNH (or any successor Servicer), including the RRB Charges, or to
switch responsibility to a third party, which must meet the criteria
herein described.

  If and so long as a TPS does not maintain at least a triple-B
long-term unsecured credit rating from Moody's Investors Service or
Standard & Poor's Rating Services, such TPS shall maintain, with the
Servicer or as directed by the Servicer, a cash deposit or comparable
security equal to at least one month's maximum estimated collections of
RRB Charges, in a form and manner as agreed upon by PSNH (or any
successor Servicer) and the TPS.  In the event of a default in the
remittance of RRB Charges by a TPS, such amount will be included in the
periodic adjustment of the RRB Charge as described in the PSNH
Testimony.

  The TPS must agree to remit the full amount of RRB Charges it bills to
retail customers, regardless of whether payments are received from such
retail customers, within 15 days of its or PSNH's (or any successor
Servicer's) bill for such charges.

  The foregoing requirements may be modified in accordance with the
terms of the RRB financing documents, subject to approval by the Commission,
and written confirmation from each rating agency then maintaining a rating on
the RRBs that such change will not adversely affect the ratings then
outstanding on the RRBs.

     6.   Credit Enhancement; Overcollateralization and True-Up

     Credit enhancement is typically necessary in securitization transactions
to provide rating agencies and investors with added confidence that principal
and interest will be paid.  Phase I, Ex. 6 at 25:28.  In order for the RRBs
to receive triple-A ratings, the exposure to losses due to, among other
things, sales of energy below those projected, longer-than-expected delays in
bill collections, and higher-than-estimated uncollectible accounts, must be
minimized.  Id. at 26:7.  This will be accomplished with various forms of
credit enhancement, including the various components of the Collection
Account and the "True-Up Mechanism" summarized below.

     The RRB Charge collections will be deposited into a Collection Account,
which will be comprised of a General Subaccount (which will hold the
collections with respect to principal, interest, fees, and expenses) and at
least three other subaccounts  the Overcollateralization Subaccount (which
will hold the Overcollateralization amount described below), the Capital
Subaccount (which will hold the initial capital contribution to the SPE), and
the Reserve Subaccount (which will hold any excess collections of RRB Charges
as described below).  Id. at 26:24-28:13.  RRB Charge collections in excess
of Periodic RRB Payment Requirements will be allocated (a) to the Capital
Subaccount to the extent the amount therein has been reduced to below the
initial capital contribution, (b) to the Overcollateralization Subaccount up
to the required level established at issuance by the rating agencies and (c)
to the Reserve Subaccount any remaining amounts.  To the extent that RRB
Charges are insufficient to make scheduled Periodic RRB Payment Requirements
during any period, the accounts will be drawn upon in the following order (a)
the Reserve Subaccount, (b) the Overcollateralization Subaccount and (c) the
Capital Subaccount.  A more detailed description of the Collection Account
allocation procedure is set forth in Phase I, Ex. 6 at 28:16-30:8.

     The RRB Charge will be calculated (both initially and as a result of the
"True-Up Mechanism" described below) to recover an amount in excess of the
amounts needed to make payments of principal, interest, fees and expenses on
RRBs (such amount, "Overcollateralization").  Id. at 27:20.  The actual
amount of Overcollateralization required to achieve the highest credit rating
will be finalized prior to the issuance of the RRBs and will depend primarily
on rating agency requirements and tax considerations, but is currently
expected to be at least 0.50% of the initial principal amount of the RRBs.
Id. at 27:29.  The Overcollateralization will be collected "pro rata" over
time and deposited to the Overcollateralization Subaccount such that the
amount therein will accumulate over time in accordance with a schedule set
forth at issuance. Id. at 28:1.

     PSNH will file adjustments, up or down, to the RRB Charge pursuant to a
true-up mechanism established in accordance with RSA 369-B:4, III and as
described in Phase I, Ex. 6 at 30:9-32:31 (the "True-Up Mechanism").  The
True-Up Mechanism is a periodic adjustment to the RRB Charge which is
designed to account for any previous or projected over- or under-collections
of the RRB Charge.  At least semi-annually and as frequently as monthly, PSNH
will request an RRB Charge adjustment such that, during the period for which
that RRB Charge will be billed, RRB Charge collections will be sufficient to
(a) pay principal and interest on the RRBs in accordance with the expected
amortization schedule, (b) maintain the Overcollateralization Subaccount
balance at the required levels, (c) restore the capital contribution to the
Capital Subaccount to the extent it has been drawn upon to make payments on
RRBs and (d) pay fees and expenses related to RRBs, including any ongoing
fees and expenses associated with any other credit enhancement.  Any amounts
on deposit in the Reserve Subaccount at the time that PSNH calculates a
periodic RRB Charge adjustment, will be incorporated in such adjustment.
PSNH, as initial Servicer (or any successor Servicer), intends to account
for, and ultimately credit to retail customers, any amounts remaining in the
Collection Account, with the exception of the amount remaining in the Capital
Subaccount, after the RRBs are paid in full and the Total RRB Payment
Requirements have been discharged.  Such amounts will be released to the SPE
free and clear of any lien in the favor of the RRB trustee upon retirement of
the RRBs and discharge of the Total RRB Payment Requirements.  These amounts
will be credited to retail customers through a subsequent ratemaking
proceeding or such other manner as the Commission may direct at that time.

     Not later than thirty days prior to each semiannual anniversary of the
RRB Transaction closing, PSNH as Servicer (or any successor Servicer) will
file with the Commission a periodic RRB Charge true-up advice letter
("Routine True-up Letter", a form of which was included as Attachment 3 to
Phase I, Ex. 6).  Further, to the extent required by the rating agencies (and
also to the extent described in the Conformed Settlement Agreement prior to
the Recovery End Date, ("RED", as defined in the Conformed Settlement
Agreement)), PSNH may file Routine True-Up Letters, as frequently as monthly,
in addition to the Routine True-Up Letter filed prior to each semiannual
anniversary of the RRB Transaction.  Absent manifest error in the Routine
True-Up Letter, the resulting upward or downward adjustments to the RRB
Charge will be effective: (i) in the case of any semiannual adjustment, on
the ensuing semiannual anniversary of the RRB Transaction closing; or (ii) in
the case of a more frequent adjustment, immediately upon the filing of the
applicable Routine True-Up Letter.

     In addition, PSNH seeks Commission authorization that whenever it is
determined that the methodology used to calculate RRB Charge adjustments
requires modification to more accurately project and generate adequate RRB
Charge collections, a non-routine true-up letter ("Non-Routine True-Up
Letter") may be filed, with the resulting RRB Charge adjustment (reflecting
such modification to the methodology or model) only to be effective upon
review and approval by the Commission that such adjustment is necessary to
ensure the timely recovery of all RRB Costs that are the subject of this
Finance Order, with such review and determination to occur within 60 days of
such filing.  RSA 369-B:4, III.

     Both Routine True-Up Letters and Non-Routine True-Up Letters may be
filed through the legal final maturity date.

     Pursuant to the Conformed Settlement Agreement and RSA 369-B:3,
IV(b)(9), the SCRC, averaged over all customers (including Part 1, the RRB
Charge), shall not exceed 3.40 cents/kWh.  If the RRB Charge is increased or
decreased pursuant to the True-Up Mechanism, the SCRC, averaged over all
customers, will remain capped at 3.40 cents/kWh.  Thus, any increase in the
RRB Charge will result in an adjustment to the Part 3, and, if necessary or
if the RED has occurred, Part 2 components of the SCRC.

     Unless PSNH's unsecured debt achieves investment grade ratings, PSNH may
be required by the rating agencies to obtain a letter of credit or other
credit enhancement to protect against any cash collection losses resulting
from the temporary commingling of funds.  If (and for so long as) such credit
enhancement is required, the RRB Costs and the RRB Charge will be adjusted
accordingly to cover the cost of such enhancement.

     7.   Tax Considerations

     The possibility that the Internal Revenue Service (the "IRS") would
assess income taxes when this Finance Order is issued or when PSNH receives
the initial proceeds from the RRBs, rather than when the RRB Charge revenues
are collected, is an issue to PSNH associated with financing the RRB Costs.
In addition to having tax consequences, this would also significantly affect
the economics of issuing the RRBs, as the benefits of the RRB Transaction
depend largely upon recognizing taxable income in respect of RRB Costs as RRB
Charges are paid by retail customers, rather than being accelerated into
current income upon the issuance of the RRBs.  Phase I, Ex. 6 at 36:25.

     PSNH has submitted a private letter ruling request to the IRS seeking
confirmation that (a) the issuance of this Finance Order by the Commission
authorizing the collection of RRB Charges will not result in gross income to
PSNH; (b) the issuance of RRBs by the SPE will not result in gross income to
PSNH; and (c) RRBs will be treated as obligations of PSNH for tax purposes.
If the RRB Transaction results in current income taxation, the benefits of
the RRB Transaction would be substantially reduced.  Should the IRS choose
not to provide a ruling, or rule adversely, PSNH would reassess the RRB
Transaction and, if possible, modify it to eliminate the risk of current
taxation.  Based upon favorable IRS rulings previously issued in respect of
several previous RRB transactions, PSNH anticipates a favorable ruling.  Id.
at 37:14.

     Under RSA 369-B:5, IV and VI, the RRBs will be treated as notes or bonds
of a political subdivision of the State for purposes of the interest and
dividends tax imposed under RSA Chapter 77, but will not constitute in any
way a debt or liability of the State or of any political subdivision thereof
and shall not constitute a pledge of the full faith and credit of the State
or any of its political subdivisions.

     8.   Accounting and Financial Reporting

     The amount financed through the RRB Transaction is expected to be
recorded in accordance with generally accepted accounting principles ("GAAP")
as long-term debt on the balance sheet of the SPE for financial reporting
purposes.  PSNH, the SPE, and the holders of RRBs will expressly agree
pursuant to the terms of the applicable documents to treat the RRBs as debt
of the SPE secured by, among other things, the RRB Property and the Other SPE
Collateral.  Because PSNH either will wholly-own or become the sole
beneficial owner of the SPE, it is required that the SPE be consolidated with
PSNH for financial reporting purposes under GAAP.  Therefore, the SPE's debt
will appear on the consolidated balance sheet of PSNH in its annual and
quarterly financial filings to the Securities and Exchange Commission.  Phase
I, Ex. 6 at 36:8.  The RRB Transaction is not expected to impact PSNH's
credit ratings, as it is expected that the rating agencies will determine
that the RRBs, which are not supported by PSNH's general revenue stream, and
not collateralized by the assets of PSNH, do not affect PSNH's
creditworthiness.  Id. at 36:18.  Therefore, it is anticipated that the
rating agencies will exclude the RRBs as debt of PSNH for purposes of
calculating financial ratios.

     9.   True-Sale Opinion and Collection Shortfalls

     Rating agencies will require acceptable opinions of bankruptcy counsel
at the time the RRBs are issued for assurance that the SPE and the RRB
Property will be bankruptcy-remote from PSNH.  As described above, to obtain
such opinions, the transfer of the RRB Property from PSNH to an SPE must
constitute a legal "true sale" such that if PSNH were to become the subject
of a bankruptcy or insolvency case, the RRB Property would not be part of
PSNH's bankruptcy estate and therefore would not be subject to the claims of
PSNH's creditors.  Id. at 36:13.

     RSA 369-B:6, V expressly provides that transfers of RRB Property, as
described in that section and as approved in a finance order, shall be
treated for all purposes as an absolute transfer as a true sale.  In
addition, the RRBs will be non-recourse to PSNH and its assets, other than
the RRB Property sold to an SPE and the Other SPE Collateral.

     Another element of the bankruptcy analysis focuses on the separate legal
status of PSNH and the SPE.  Although PSNH either will wholly-own or become
the sole beneficial owner of the SPE, the RRB Transaction will be structured
so that, in the event of a bankruptcy of PSNH, the SPE's separate legal
existence would be respected and the assets and liabilities of the SPE would
remain separate from the estate of PSNH.  The structural elements supporting
such separate existence include, without limitation, requirements that the
SPE be adequately capitalized, that PSNH be adequately compensated on an
arms-length basis for the servicing functions it performs in billing,
collecting, and remitting the RRB Charges, and that PSNH and the SPE take
certain steps to ensure that creditors are not misled as to their separate
existence.  These structural protections are important because, without such
protections, a bankruptcy court might invoke the doctrine of "substantive
consolidation" and disregard the SPE's separate existence.  Substantive
consolidation is an equitable doctrine in bankruptcy cases that allows courts
to disregard the separate existence of two or more affiliated entities to
ensure the equitable treatment of all creditors and to maximize creditor
recoveries.  When entities are "substantively consolidated" in a bankruptcy
proceeding, their assets and liabilities are pooled, thereby eliminating
intercompany claims, and claims of third-party creditors against any of those
entities are generally treated as claims against the common pool of assets
created by consolidation.

     In order to preserve the bankruptcy-remote status of the SPE and the
true-sale nature of the RRB Property and Other SPE Collateral once it is
transferred to the SPE, PSNH cannot have any claim against the RRB Charges.
In its capacity as Servicer, PSNH will bill RRB Charges along with other
charges for services rendered to retail customers obligated to pay such
charges.  Amounts collected from a retail customer which are allocated to the
SCRC in accordance with the Conformed Settlement Agreement and this Finance
Order shall, in accordance with the Conformed Settlement Agreement and this
Finance Order, in turn be allocated pro rata to the RRB Charge (Part 1 of the
SCRC) and to any remaining portion of the SCRC not the subject of a finance
order (Parts 2 and 3 of the SCRC).  If PSNH collects less than the full
amount that is billed to such customers, it is not permitted, in the
allocation of such collections, to favor itself over the SPE, as owner of the
RRB Property.

     10.   Use of Proceeds

     PSNH will use the proceeds of securitization in such manner as the
Commission approves in this Finance Order, but intends generally to provide
for the following: payment of transaction costs; payment of taxes; reduction
of capitalization and payment of call and tender premiums and refinancing
costs associated therewith; and provision for the required buy-down of the
Seabrook Power Contract with North Atlantic Energy Corporation ("NAEC") and
other purchased power obligations, including the prefunding of
decommissioning costs.  The following represents a preliminary estimate of
the use of proceeds:<FN 9>

Buyout of Power Purchase Obligations            $329 million

Retire PSNH Capital                              326 million

Financing and Debt Retirement Premium Costs       15 million

Total Use of Proceeds                          $670 million


     PSNH shall deploy the total proceeds received related to restructuring,
including those arising from asset sales, in a manner that will provide the
greatest possible savings to retail customers.  Because the timing and amount
of such proceeds is not yet known, and market conditions at the time of
repurchase cannot be predicted with certainty, the amounts listed above are
subject to change.

                           III.     FINDINGS

Based on the foregoing, the Commission hereby FINDS:

Overall Findings

     1.   The issuance of this Finance Order, the implementation of the
securitization transaction described above in the Transaction Description and
the consummation of the RRB Transaction in accord thereof, are consistent
with the public good and will result in benefits to retail customers that are
substantially consistent with the principles contained in RSA 374-F:3 and RSA
369-A:1, X, with RSA 369-A:1, XI, and with RSA Chapter 369-B.

     2.   The issuance of this Finance Order is pursuant to a petition by
PSNH and hearings on that petition in this proceeding.

     3.   The issuance of this Finance Order is in the public interest as set
forth in RSA 369-B:1, IX.

     4.   The issuance of this Finance Order, the implementation of
securitization and the consummation of the RRB Transaction will permit any
RRBs issued pursuant to the RRB Transaction to be traded successfully at
favorable rates on the existing securitization market in accordance with 1999
N.H. Laws 289:3, I, which the Commission interprets to mean sold at favorable
rates into the capital markets.

Findings Regarding Authority and Procedures

     5.   The issuance of this Finance Order is part of a settlement approved
by the Commission under RSA Chapter 374-F to implement electric utility
restructuring within the service territory of PSNH.

     6.   The Commission has conducted the procedures and investigations in
this proceeding and issued this Finance Order pursuant to 1999 N.H. Laws
289:3 and RSA Chapter 369-B.

Findings Regarding the Establishment of the RRB Costs

     7.   Pursuant to the Commission's determination in the September 8 Order
that PSNH may securitize up to $670 million of its stranded costs (consisting
of Seabrook Over-Market Generating Assets (NAEC), Millstone 3 Over-Market
Generating Assets, Acquisition Premium and FAS 109, and Financing and Debt
Retirement Premium Costs), this entire amount is eligible to be considered
"RRB Costs" within the meaning of  RSA 369-B:2, XIV, is reasonable and is
eligible to be funded with the proceeds of the RRBs issued under the
authority of this Finance Order.

     8.   The up-front and ongoing transaction costs, the cost of any credit
enhancement associated with the RRB Transaction, the cost of any swap
agreement or hedge transaction related to the RRBs, and any other fee, cost
or expense in respect of the RRBs as described in the Transaction
Description, are "RRB Costs" within the meaning of RSA 369-B:2, XIV, are
reasonable and are eligible to be financed through the issuance of the RRBs,
in accordance with this Finance Order.

     9.   All RRB Costs may be recovered through the RRB Charge, to be
assessed against and collected from all of PSNH's retail customers taking
retail electric service.

Findings Regarding the RRB Charge

     10.   The RRB Charge to be established, adjusted, maintained and
collected from all retail customers during the term that the RRBs are
outstanding in accordance with the terms of the Conformed Settlement
Agreement, the Settlement Orders and RSA Chapter 369-B, and as described in
the Transaction Description, is just and reasonable.  This ultimate finding
is based upon the totality of evidence presented on the record of this
proceeding.  This ultimate finding is also based upon the Commission's
specific reliance upon sworn representations of NU and PSNH witnesses during
the hearing on this matter that if, because of PSNH's conduct, the actual RRB
Charge or RRB Transaction is found to differ in a significant, material or
unreasonable way from the terms of this Finance Order, the Conformed
Settlement Agreement, the Settlement Orders or RSA Chapter 369-B, the
Commission will have the jurisdiction and authority with respect to PSNH or
its successors to take such remedial rate-making measures as necessary in
order to protect the public interest and to restore the equitable,
appropriate and balanced result previously determined to exist.  The evidence
presented also supports the following specific findings.  The RRB Charge:

     (a)       will be a non-bypassable, nondiscriminatory, appropriately
structured charge of limited duration;

     (b)       will be a monthly usage-based charge to be stated on each
retail customer's monthly bill;

     (c)       will be in an amount necessary and sufficient to provide for
the full recovery and payment of the Total RRB Payment Requirements; and

     (d)       will be a component of the SCRC.

     11.   The procedures and methodologies for adjusting the RRB Charge as
necessary to ensure the timely recovery of all RRB Costs during the term that
the RRBs are outstanding, as set forth in the Transaction Description, are
just and reasonable, will serve to reconcile the actual RRB Charge collected
with the RRB Charge expected to have been collected during the relevant prior
periods in a manner such that the adjusted RRB Charge will be sufficient to
provide for the full recovery of the Total RRB Payment Requirements in
accordance with the Conformed Settlement Agreement, the Settlement Orders,
and this Finance Order, and comply with RSA 369-B:4, III.

     12.   The procedures and methodologies for ensuring that the RRB Charge
is collected from all retail customers that obtain retail electric service
from other electricity service providers, as described in the Transaction
Description, are reasonable and will be sufficient to provide for the full
recovery of the Total RRB Payment Requirements in accordance with the
Conformed Settlement Agreement, the Settlement Orders, RSA 369-B:4, IV and
this Finance Order.

     13.   The procedures and methodologies for allocating amounts collected
from retail customers that purchase or otherwise obtain back-up, maintenance,
emergency or other delivery or energy service, on a pro rata basis among the
SCRC and the Delivery Charge, system benefits charge, energy consumption tax,
Hydro-Quebec support payments, and, if applicable, the transition or default
service charges as these charges are identified in Section V of the Conformed
Settlement Agreement and other rates and charges, as described in the
Transaction Description and PSNH's Retail Delivery Service Tariff as filed
with the Commission in this proceeding, are reasonable.

     14.   The range of rates projected for the RRB Charge, based on evidence
in the record concerning estimated interest costs, electricity costs, other
economic factors, and the procedures and methodologies for establishing rates
more generally set forth in the Conformed Settlement Agreement and the
Settlement Orders, are equitable, affordable and appropriate and reasonably
balance the competing interests of consumers and RRB investors so that RRB
investors will realize a reasonable return and retail customers will not
suffer any undue burden.

     15.   The assumptions and projections upon which the RRB Charge and
projections as to future RRB Charges are based, including but not limited to
the load forecast and the projection of wholesale electric prices, are
reasonable.

     16.   The Commission finds that the SCRC, averaged over all customers
(including the RRB Charge), will not exceed 3.40 cents/kWh.

Findings Regarding the Issuance of the RRBs

     17.   The issuance of the RRBs pursuant to the terms of this Finance
Order is reasonable and consistent with the public good.

     18.   The Commission finds that in order to obtain the highest rating on
the RRBs as possible, commensurate with achieving the lowest overall cost for
the RRBs consistent with market conditions then in existence, it is
necessary, reasonable and consistent with RSA Chapter 369-B that PSNH be
afforded a reasonable degree of flexibility in establishing the terms and
conditions of the RRB issuances with respect to the following matters, as
long as the resulting issuance is consistent with the Transaction Description
and Settlement Orders:

     (a)   The amount of the initial capitalization of the SPE;

     (b)   The form, interest rate (whether fixed or variable), price,
amortization schedule, number of series, number of classes and their
principal amount, and determination of credit ratings and other
characteristics of RRBs;

     (c)   The all-in cost of the RRBs, provided that as calculated in
accordance with Exhibit 1 attached to this Finance Order, the all-in cost
shall be at least 100 basis points less than PSNH's Pre-Tax Revenue WACC (as
defined in Exhibit 2 attached to this Finance Order) as of the date the RRBs
are priced.  In addition, the weighted average life of all series of RRBs,
calculated in accordance with Exhibit 3 attached to this Finance Order, shall
be not less than 5 years and not more than 10 years;

     (d)	The rating agencies from which it will seek ratings for the RRBs,
the number of ratings agencies from which ratings shall be sought, and the
actual ratings level targeted;

     (e)   The issuance of variable-rate RRBs, provided that a fixed-interest
rate payment must be used to calculate the RRB Charge, and if such
variable-rate issuance will result in a lower all-in cost associated with the
RRBs;

     (f)   The Servicing Fee for any successor Servicer, if such Fee will be
no more than 1.5% of the outstanding principal balance of the RRBs if the
successor Servicer is not billing the RRB Charge in conjunction with other
charges;

     (g)   The number of subaccounts of the Collections Account into which
the RRB Charge collections will be deposited;

     (h)   The actual amount of Overcollateralization and other credit
enhancement;

     (i)   Whether it is necessary to obtain a letter of credit or other
credit enhancement to protect against any cash collection losses resulting
from the temporary commingling of funds; and

     (j)   Such other up-front and ongoing transaction costs, as described in
the Transaction Description, as may be required by the rating agencies and
tax authorities.

     19.   The RRB Transaction is necessary to achieve the overall reduction
in rates intended by the Conformed Settlement Agreement, the Settlement
Orders and RSA Chapter 369-B.

     20.   The RRBs will be non-recourse to PSNH and its assets, but will be
secured by a pledge of all right, title, and interest of the SPE in its RRB
Property and Other SPE Collateral.

     21.   The determinations by PSNH concerning the final terms and
conditions of the RRBs shall be subject to the oversight of the State
Treasurer. The State Treasurer's oversight shall be part of this docket and
not a separate proceeding.  The State Treasurer's oversight over the terms
and conditions of the RRB issuance shall be governed by the terms of this
Finance Order and, pursuant to RSA 369-B:5, XI, shall not be governed by the
provisions of RSA Chapter 541 or RSA Chapter 541-A.

     22.   In accordance with RSA 369-B:5, IV and VI, RRBs issued pursuant to
this Finance Order will be treated as notes or bonds of a political
subdivision of the State for purposes of the interest and dividends tax
imposed under RSA Chapter 77, but will not constitute a debt or liability of
the State or of any political subdivision thereof, and will not constitute a
pledge of the full faith and credit of the State or any of its political
subdivisions.  In accordance with RSA 369-B:5, V, the issuance of RRBs
pursuant to this Finance Order will not in any way obligate the State or any
political subdivision thereof to make appropriations for payment thereof.

Findings Regarding the Establishment of RRB Property

     23.   The RRB Charge constitutes "RRB Property" within the meaning of
RSA 369-B:2, XV and will represent a current and irrevocable vested property
right including, without limitation, the right, title and interest of PSNH or
the SPE in and to all revenues, collections, claims, payments, money or
proceeds of or arising from the RRB Charges authorized pursuant to this
Finance Order to recover the RRB Costs, and to all rights to obtain
adjustments to the RRB Charge pursuant to the terms of this Finance Order.
As provided in RSA 369-B:2, XV, "RRB Property" shall constitute a current and
irrevocable vested property right, notwithstanding the fact that the value of
such property right may depend upon electricity usage or the performance of
certain services.

     24.   Pursuant to RSA 369-B:6, II, the State of New Hampshire has
pledged, contracted and agreed with the owners of the RRB Property and
holders of and trustees for RRBs that neither the State, nor any of its
agencies, including the Commission, will limit, alter, amend, reduce or
impair the RRB Charge, RRB Property, this Finance Order or any rights
hereunder or thereunder, or ownership thereof or security interest therein,
until the RRBs, including all principal, interest, premium, costs and
arrearages thereon, are fully met and discharged, unless adequate provision
is made by law for the protection of the owners, holders and trustees.

     25.    The RRB Charge imposed, and the RRB Property established,
pursuant to this Finance Order will be irrevocable, and the prohibition
established in RSA 369-B:3, II against any rescission, alteration, or
amendment of this Finance Order or the taking of any other action, directly
or indirectly, to revalue or revise the RRB Charge or the RRB Costs will be
binding upon the Commission and any successor thereto.

     26.   The owner of the RRB Property will have the right to recover an
aggregate amount equal to the Total RRB Payment Requirements until the RRBs
(or any refunding RRBs authorized by the Commission) have been discharged in
full through continued assessment, collection, and remittance of RRB Charges
from all retail customers taking retail electric service.

Findings Regarding the SPE and the Sale of the RRB Property to the SPE

     27.   The organization and capitalization of the SPE in accordance with
the Transaction Description or as may be required by the rating agencies and
tax authorities will, along with other measures, enable the RRBs to receive
the highest investment ratings and therefore be issued at the lowest possible
cost under then-current market conditions.

     28.   The SPE is a "financing entity" within the meaning of RSA 369-B:2,
VI.

     29.   The sale and transfer of the RRB Property to the SPE pursuant to
this Finance Order is reasonable.  In accordance with RSA 369-B:6, V, the
sale and transfer of the RRB Property by PSNH to the SPE pursuant to this
Finance Order shall be treated as an absolute transfer of all of PSNH's
right, title, and interest, as a legal true sale, and not as a pledge or
other financing, of the RRB Property, in each case notwithstanding the
following, which are hereby determined not to affect such absolute transfer
and legal true sale: (i) any contrary treatment of such transfer for
accounting, tax or other purposes, (ii) certain indemnities (including
mandatory redemption or repurchase obligations related thereto) provided for
in the RRBs or in the RRB transaction documents, (iii) PSNH's collection of
RRB Charges pursuant to the Servicing Agreement authorized by this Finance
Order, or (iv) PSNH's providing any credit enhancement to the SPE as
described in the Transaction Description.

     30.   PSNH's proposed use of the proceeds from the sale of the RRB
Property to the SPE as described in the Transaction Description constitutes
permissible uses of such proceeds in accordance with RSA 369-B:5, II.

Findings Regarding Related Agreements and Accounting and Collections

     31.   PSNH is authorized to enter into a Servicing Agreement and
Administration Agreement with the SPE to consummate the RRB Transaction and
to implement this Finance Order, as described in the Transaction Description.
Such Servicing and Administration Agreements shall be in substantially the
same form in material respects as those submitted as Exhibit F-17 in this
docket.  PSNH shall file a copy of the executed Servicing and Administration
Agreements with the Commission within three business days of their effective
dates.

     32.   Based upon PSNH's accounting and billing information systems
capabilities, the proposed billing, collection and remittance of actual RRB
Charges is reasonable.  To the extent estimation of RRB Charge collections is
required for remittance to the SPE, such estimation methodology will be
subject to rating agency approval and, prior to the issuance of RRBs, the
oversight of the State Treasurer.

     33.    The RRB Charge billing, collection, and remittance procedures to
be imposed upon any approved TPS, as set forth in the Transaction
Description, are commercially reasonable and comply with the provisions of
RSA 369-B:4, IV.  The Commission finds that the billing, collection and
remittance of RRB Charges by a TPS may increase the risk of shortfalls in the
RRB Charge collections.  The Commission also finds that the risk of
interruption may increase the risk to investors, potentially reducing the
credit ratings and increasing the cost of the RRBs.  Tr. 7/06/00 at 134-137;
190-192.  The standards for such procedures set forth in the Transaction
Description are consistent with those imposed by public utility commissions
in connection with recent securitization approvals of similar size and
complexity.  See Re Public Service Electric and Gas Company, 197 PUR4th 102
(NJBPU, September 17, 1999); Re Boston Edison Company, 193 PUR4th 274 (MDTE,
April 2, 1999).

     34.   PSNH's plan to account for, and ultimately credit to ratepayers,
any amounts remaining in the Collection Account, with the exception of the
amount remaining in the Capital Subaccount, after the RRBs are paid in full
and the Total RRB Payment Requirements have been discharged is reasonable and
is in accordance with RSA Chapter 369-B.

Findings Regarding PSNH's Use of Proceeds

     35.   The use of proceeds by PSNH, as long as deployed in a manner that:
(i) will maximize the savings to retail customers; (ii) is consistent with
the goals and objectives described at the July 6-7, 2000 hearings; and (iii)
will be applied to the three "use of proceeds" categories described in the
Transaction Description is just and reasonable.  Any subsequent review by the
Commission of the use of proceeds by PSNH shall not suspend the effectiveness
of this Finance Order.

Findings Required by RSA 369-B:3, IV(b)

     36.   The RRBs authorized by this Finance Order are consistent with the
Settlement Orders.

     37.   This Finance Order is consistent with the conditions set forth in
RSA 369-B:3, IV(b).

     38.   This Finance Order satisfies the conditions and requirements of
RSA 369-B:3, IV and the other requirements of RSA Chapter 369-B.

     39.   PSNH satisfactorily committed in writing by June 30, 2000 to all
of the conditions set forth in RSA 369-B:3, IV(b), including those regarding
customer savings included in RSA 369-B:3, IV(b)(3).

Findings Regarding Investment in NU Money Pool

     40.   It is in the public interest to permit PSNH to invest in the
Northeast Utilities ("NU") Money Pool once the write-offs associated with the
Conformed Settlement Agreement have been taken.  However, if the Conformed
Settlement Agreement is terminated, it is in the public interest for such
restriction to remain in effect until such time as the Commission orders
otherwise.  Accordingly, it is in the public interest for the restriction on
such investment that was extended by the Commission in PSNH's most recent
financing case, Docket No. DE 00-016, in Order No. 23,416, issued March 1,
2000, to terminate upon the taking of such write-offs.  This determination is
subject to the provisions of RSA 365:28.

Findings Regarding Application of Restructuring Payments by NAEC

     41.   Utilizing the proceeds received from PSNH in connection with the
restructuring of the Seabrook Power Contract, it is in the public interest to
permit NAEC to repay up to $135 million in First Mortgage Bonds and up to
$200 million in Term Notes to most efficiently reduce its costs, and to issue
a dividend to NU or repurchase NAEC common stock from NU.

                  IV.     APPROVALS and AUTHORIZATIONS

Based on the foregoing, the Commission hereby GRANTS the following Approvals
and Authorizations:

Overall Approval

     1.   PSNH is authorized to consummate the RRB Transaction upon the
authority granted in this Finance Order without further action or order by
this Commission.

     2.   The issuance of this Finance Order, the implementation of the
securitization proposal and the consummation of the RRB Transaction are
consistent with the public good, will result in benefits to retail customers
that are substantially consistent with the principles contained in RSA
374-F:3 and RSA 369-A:1, X, with RSA 369-A:1, XI and with RSA Chapter 369-B,
will permit any RRBs issued pursuant to the RRB Transaction to be traded at
favorable rates on the existing securitization market in accordance with 1999
N.H. Laws 289:3, I, which the Commission interprets to mean sold at favorable
rates into the capital markets, and are hereby approved.  This Finance Order
is approved under the authority of and issued pursuant to RSA Chapter 369-B.

     3.   This Finance Order and the RRB Charge authorized to be imposed and
collected pursuant to this Finance Order shall be irrevocable and neither
this Commission nor any successor thereto shall take any action to rescind,
alter or amend this Finance Order or otherwise to, directly or indirectly,
revalue or revise for ratemaking purposes the RRB Costs, or the costs of
providing, recovering, financing, or refinancing the RRB Costs, determine
that such RRB Charge is unjust or unreasonable, or in any way reduce or
impair the value of the RRB Property either directly or indirectly by taking
such RRB Charge (other than the portion of such RRB Charge constituting a
servicing fee payable to PSNH) into account when setting other rates for
PSNH, nor shall the amount of revenues arising with respect to the RRB Charge
be subject to reduction, impairment, postponement or termination.

Approval Regarding the Establishment of the RRB Costs

     4.   The Commission approves and designates as RRB Costs, within the
meaning of RSA 369-B:2, XIV: (i) an amount no greater than $670 million of
PSNH's stranded costs and up-front transaction costs, as detailed in this
Finance Order and described in the Transaction Description, and approved in
the Settlement Orders; <FN 10> and (ii) ongoing transaction costs, the cost of
any credit enhancement associated with the RRB Transaction, the cost of any
swap agreement or hedge transaction related to the RRBs, and any other fee,
cost or expense in respect of the RRBs as described in the Transaction
Description.

Approvals Regarding the RRB Charge

     5.    The RRB Charge to be established, adjusted, maintained and
collected from all retail customers taking retail electric service during the
term that the RRBs are outstanding in accordance with the terms of the
Conformed Settlement Agreement, the Settlement Orders, RSA Chapter 369-B, the
Transaction Description, and the Findings is just and reasonable and is
hereby approved.

     6.   The initial RRB Charge, as determined in accordance with the
Transaction Description, the Settlement Orders and RSA Chapter 369-B, and to
be filed in the Issuance Advice Letter, substantially in the form of
Attachment MAE-1 to Phase I, Ex. 6, is just and reasonable and is hereby
approved.  Such initial RRB Charge will be effective upon such filing.

     7.   The procedures and methodologies set forth in this Finance Order
for adjusting the RRB Charge during the term that the RRBs are outstanding,
as described in the Transaction Description, are just and reasonable, and are
hereby approved.

     8.   The procedures and methodologies set forth in this Finance Order
for ensuring that the RRB Charge is collected from all retail customers that
obtain retail electric service from other electricity service providers, as
described in the Transaction Description, is just and reasonable, and is
hereby approved.

     9.   The procedures and methodologies for allocating amounts collected
from retail customers that purchase or otherwise obtain back-up, maintenance,
emergency or other delivery or energy service, on a pro rata basis among the
SCRC and the Delivery Charge, system benefits charge, energy consumption tax,
Hydro-Quebec support payments, and, if applicable, the transition or default
service charges as these charges are identified in Section V of the Conformed
Settlement Agreement, and other rates and charges, as described in the
Transaction Description and PSNH's Retail Delivery Service Tariff as filed
with the Commission in this proceeding, are reasonable, and such procedures
and methodologies are hereby approved.

     10.   The SCRC, averaged over all customers (including the RRB Charge),
shall not exceed 3.40 cents/kWh.

Approvals Regarding the Issuance of the RRBs

     11.   Subject to Approval No. 13 below, the issuance of the RRBs
substantially in accordance with the Transaction Description, including but
not limited to the terms and amounts of the RRBs, the expected and legal
final maturities of the RRBs of up to 12 and 14 years respectively, the
up-front and ongoing transaction costs expected to be incurred in issuing the
RRBs, the costs of any credit enhancements, and the uses of the proceeds from
the issuance of the RRBs, is reasonable and consistent with the public good,
and is hereby approved.

     12.   Subject to Approval No. 13 below, and as long as consistent with
Finding No. 18, above, the final terms and conditions of the RRBs authorized
by this Finance Order, including but not limited to the schedule of principal
amortization, credit enhancement, frequency of principal or interest
payments, the interest rates on the RRBs and manner of setting such interest
rates (fixed or variable), redemption features, the manner of sale of the
RRBs, the number and determination of credit ratings and all other terms and
conditions of the RRBs, the approval of final transaction documents, and
certain up-front and ongoing transaction costs, shall, to the extent
consistent with the provisions of this Finance Order, be determined by PSNH
at the time RRBs are priced and after input from the rating agencies, tax
authorities, the underwriters, and the State Treasurer.  This procedure for
issuing the RRBs, based on current market conditions and directed to achieve
the lowest overall cost possible, including the filing of the Issuance Advice
Letter, in accordance with this Finance Order is reasonable and consistent
with the public good, and is hereby approved.

     13.   PSNH is authorized to consummate the issuance of the RRBs in one
or more series upon such terms as may be established by or on behalf of PSNH
at the time of issuing such securities, so long as (a) the all-in cost of the
RRBs, calculated in accordance with Exhibit 1 attached to this Finance Order,
is at least 100 basis points less than PSNH's Pre-Tax Revenue WACC (as
defined in Exhibit 2 attached to this Finance Order) as of the date that the
RRBs are priced, and (b) the weighted average life of all series of RRBs,
calculated in accordance with Exhibit 3 attached to this Finance Order, is
not less than 5 years and not more than 10 years.

     14.   The determinations by PSNH concerning the final terms and
conditions of the RRBs shall be subject to the oversight of the State
Treasurer.  PSNH shall cooperate with the State Treasurer and her advisers
throughout the entire process of issuing the RRBs, including but not limited
to providing the State Treasurer and her advisers with drafts of all
documents pertaining to the issuance of the RRBs and an opportunity to
comment on such documents as well as such other information and materials as
the State Treasurer or her advisers may reasonably request.

     15.   The State Treasurer shall provide a report of the results and
conclusions of her oversight activities to the Commission and PSNH (the
"Report") within 90 days after the RRB issuance.

     16.   If, at any time (but not later than two business days prior to the
closing for the RRBs) the State Treasurer concludes that PSNH has failed to
exercise fiscal prudence or to achieve the lowest overall cost for the RRBs,
the State Treasurer shall promptly notify the Commission and PSNH in writing
of such conclusion (the "State Treasurer's Preliminary Conclusion").  Such
written notice shall include in reasonable detail the basis for the State
Treasurer's Preliminary Conclusion.  Such notification by the State Treasurer
to the Commission and PSNH shall not suspend the effectiveness of this
Finance Order.

     17.   If the State Treasurer (i) shall have delivered to the Commission
and PSNH a written notice pursuant to Approval No. 16 above and (ii)
concludes that PSNH caused the RRBs to be issued without adequately
addressing the State Treasurer's Preliminary Conclusion (the "State
Treasurer's Final Conclusion"), the State Treasurer shall include in its
Report in reasonable detail the basis for the State Treasurer's Final
Conclusion.  Such filing by the State Treasurer with the Commission shall not
suspend the effectiveness of this Finance Order.

     18.   Upon receipt of the Report, delivered pursuant to Approval No. 17
above and containing therein the State Treasurer's Final Conclusion, the
Commission may conduct such further proceedings as it deems appropriate to
determine if, as a result of PSNH's failure to adequately address the State
Treasurer's Preliminary Conclusion, PSNH failed to exercise prudence and
achieve the lowest overall cost for the RRBs.  If the Commission so
determines that PSNH failed to exercise fiscal prudence or to achieve the
lowest overall cost for the RRBs, the Commission may reduce Part 3 of the
SCRC by the Present Value (as defined in the Conformed Settlement Agreement)
of the excess costs, if any, that the Commission determines were incurred as
a result of such failure.  Such further proceedings shall not suspend the
effectiveness of this Finance Order.

     19.   In accordance with RSA 369-B:5, IV and VI, RRBs issued pursuant to
this Finance Order will be treated as notes or bonds of a political
subdivision of the State for purposes of the interest and dividends tax
imposed under RSA Chapter 77, but will not constitute a debt or liability of
the State or of any political subdivision thereof, and will not constitute a
pledge of the full faith and credit of the State or any of its political
subdivisions.  In accordance with RSA 369-B:5, V, the issuance of RRBs
pursuant to this Finance Order will not in any way obligate the State or any
political subdivision thereof to make appropriations for their payment.

Approvals Regarding the Establishment of the RRB Property

     20.   The creation and establishment for the benefit of PSNH (or any
assignee in accordance with the terms of this Finance Order) of the RRB
Property is hereby approved.  Such RRB Property, constituted and effective in
accordance with RSA 369-B:2, XV, will be entitled to all treatment and rights
accorded to RRB Property under RSA Chapter 369-B.

     21.   The RRB Property established by this Finance Order will represent
a continuously existing current and irrevocable vested property right in
accordance with the provisions of RSA 369-B:2, XV and RSA 369-B:6, I for all
purposes, including for the purpose of contracts relating to or securing the
RRBs, whether or not the revenues and proceeds arising with respect to the
RRB Charge have accrued at the time of this Finance Order, and will include,
without limitation, the right, title, and interest in and to all revenues,
collections, claims, payments, money, or proceeds of or arising from or
constituting (a) the RRB Charge authorized by this Finance Order including
the initial RRB Charge set forth in the Issuance Advice Letter as may be
adjusted from time to time in order to recover RRB Costs and to generate
amounts sufficient to discharge an amount equal to the sum of the Periodic
RRB Payment Requirements, for the period which such RRB Charge will be
billed, as found and authorized herein, and (b) all rights to obtain periodic
adjustments and non-routine adjustments to the RRB Charge in accordance with
the True-Up Mechanism.

     22.   The RRB Property created and established by this Finance Order
will constitute a current and irrevocable vested property right of the owner
thereof or its assignee or transferee, which continuously exists with all of
the rights and privileges of RSA 369-B:2, XV, RSA 369-B:6, and RSA 369-B:7
until the owner or its assignee or transferee has received RRB Charges
sufficient to discharge the Total RRB Payment Requirements in full.  Such
property right may not be limited, altered, amended, reduced, or impaired by
any subsequent actions of the State, any of its agencies, including the
Commission, PSNH or any third party, and shall, to the fullest extent
permitted by law, be enforceable against PSNH, its successors and assigns,
and all other third parties, including judicial lien creditors, claiming an
interest therein by or through PSNH or its successors or assigns.  Nothing in
this paragraph shall preclude such limitation, alteration, amendment,
reduction, or impairment if and when adequate provision shall be made by law
for the protection of the owner of the RRB Property or its assignee or
transferee.

Approvals Regarding the Establishment of the SPE

     23.   The creation of a bankruptcy-remote SPE in accordance with the
Transaction Description, to which the RRB Property subject to this Finance
Order is to be sold, is hereby approved.

     24.   The initial capitalization by PSNH of the SPE, in accordance with
the Transaction Description and Findings, is hereby approved.

Approvals Regarding the Sale and Assignment of the RRB Property

     25.   The sale or assignment, without recourse, by PSNH of all of its
right, title and interest in the RRB Property to the SPE, and the acquisition
of such RRB Property by the SPE, in accordance with the Transaction
Description is hereby approved.

     26.   The sale by PSNH of the RRB Property to the SPE in accordance with
the Transaction Description will be pursuant to and governed by RSA 369-B:6,
III and V, and, accordingly, will be treated as an absolute transfer of all
of PSNH's rights, title, and interest, as a legal true sale, and not as a
pledge or other financing, of the RRB Property, in each case notwithstanding
the following, which are hereby determined not to effect such absolute
transfer and legal true sale:  (i) any contrary treatment of such transfer
for accounting, tax or other purposes, (ii) certain indemnities (including
mandatory redemption or repurchase obligations related thereto) provided for
in RRBs or in the RRB Transaction Documents, (iii) PSNH's collection of the
RRB Charge pursuant to the Servicing Agreement authorized by this Finance
Order, or (iv) PSNH's providing any credit enhancement to such SPE as
described in the Transaction Description.

     27.   Upon the effectiveness of the sale and assignment of the RRB
Property, the SPE, as owner of the RRB Property, and the holders of the RRBs,
or any trustee acting therefor, will be entitled to rely on and shall be
entitled to the benefit of the pledge, contract and agreement of the State of
New Hampshire set forth in RSA 369-B:6, II, and the SPE is hereby authorized
to include this pledge, contract, agreement and acknowledgment of the State
in any contracts with current or prospective holders, or any trustee
therefor, of the RRBs, or in any documentation relating to the RRBs.

     28.   Upon the effectiveness of the sale and assignment of the RRB
Property: (i) the SPE shall have all of the rights originally held by PSNH
with respect to such RRB Property, including, without limitation, the right
to exercise any and all rights and remedies, including the right to authorize
the Servicer to disconnect service (including backup service) to the extent
permitted by RSA 369-B:4, IV, and applicable regulations, to assess and
collect any amounts payable by any customer in respect of such RRB Property,
notwithstanding any objection or direction to the contrary by PSNH, as
initial Servicer, or any successor Servicer, and (ii) any payment by any
customer to the SPE shall discharge such customer's obligations in respect of
such RRB Property to the extent of such payment, notwithstanding any
objection or direction to the contrary by the Servicer.

     29.   Upon the effectiveness of the sale and assignment of the RRB
Property to the SPE, PSNH or any successor Servicer shall not be entitled to
recover RRB Charges other than for the benefit of the SPE or its successor,
in accordance with RSA 369-B:6, IV and PSNH's or any successor's duties as
Servicer of such RRB Property as authorized by this Finance Order.

Approvals Regarding the Establishment of a Statutory Security Interest in the
RRB Property

     30.   Pursuant to RSA 369-B:7, VIII, upon the effective date of this
Finance Order, there shall exist a statutory first priority lien on all RRB
Property then existing or thereafter arising pursuant to the terms of this
Finance Order.

     31.   Such lien shall secure all obligations, then existing or
subsequently arising, to the holders of  RRBs, the trustee or representative
for such holders and the SPE and shall arise by operation of law
automatically without any action on the part of PSNH or any other person.
Such lien shall be valid, perfected, and enforceable upon the effectiveness
of this Finance Order without any further public notice.  PSNH does expect to
file financing statements with respect to the RRB Property which will
constitute a protective filing pursuant to RSA 369-B:7, VIII.  If the RRB
Property subject to this Finance Order is transferred and sold to more than
one SPE, any collections in respect of the undivided beneficial interests in
RRB Charges related to such RRB Property will be allocated pro rata among
such undivided beneficial interests to give effect to the pari passu first
priority statutory liens on the SPE's portion of the RRB Property subject to
this  Finance Order.

     32.   The pledge by the SPE of all of its interest in the RRB Property
and the Other SPE Collateral, to secure RRBs issued in connection with such
pledge, is hereby approved.

Approvals Regarding Third Party Suppliers

     33.   Any TPS that may be permitted to collect RRB Charges shall (i)
meet the creditworthiness criteria to be established by the Commission and,
at a minimum, the criteria set forth and approved in this Finance Order; and
(ii) comply with the billing, collection and remittance procedures and
information access requirements and such other procedures contained in the
RRB Transaction documents as the rating agencies may require, once such
additional procedures are approved by the Commission.

     34.   The RRB Charge billing, collection, and remittance procedures to
be imposed upon any approved TPS, as set forth in the Transaction
Description, and found, in Finding No. 33, above, to be commercially
reasonable and in compliance with the provisions of RSA 369-B:4, IV, are
hereby approved.

Approval Regarding Swap and Hedge Transactions

     35.   Subject to Approval No.13 above, the implementation of swap
agreements or other hedge transactions in connection with the RRBs consistent
with the Transaction Description and Findings, above, is consistent with the
public good and is hereby approved.  Interest payments made to a counterparty
of a swap agreement or hedge transaction, and the costs of implementing such
transaction, shall constitute "RRB Costs" within the meaning of RSA 369-B:2,
XIV, shall be calculated in and recovered through the RRB Charge, and shall
be entitled to all the rights and protections under this Finance Order and
RSA Chapter 369-B as other RRB Costs, just as if the RRBs were fixed rate
instruments and these amounts were directly due to holders of the RRBs.

Approvals Regarding Servicing and Collection Procedures, and Accounts

     36.   The Servicing Agreement, to the extent it is substantially
consistent in material respects with the description of such agreement in the
Transaction Description and the draft submitted as part of Ex. F-17, under
which PSNH will agree to continue to operate its distribution system to
provide service to retail customers, to bill and collect RRB Charges for the
benefit and account of such SPE or its assigns, and to account for and remit
these amounts to or for the account of such SPE or its assigns, including the
amount of the Servicing Fee imposed thereunder, is reasonable and consistent
with the public good, and is hereby approved.  Pursuant to RSA 369-B:6, IV,
PSNH shall enter into the Servicing Agreement, and any successor Servicer
shall be required to enter into a similar Servicing Agreement.

     37.   The RRB Charge billing, collection and remittance procedures, as
described in the Transaction Description, subject to rating agency approval
to the extent estimation of RRB Charge collections is required, are
reasonable, consistent with the public good and are hereby approved.

     38.   In the event of a default by a Servicer in remittance of RRB
Charges, the Commission will, in accordance with RSA 369-B:7, VI and VIII,
upon application by (i) the trustee or holders of the RRBs, (ii) the trustee
for the SPE or its assignees, or (iii) pledgees or transferees of the RRB
Property, order the sequestration and payment to or for the benefit of the
pledgees or transferees of the revenues arising with respect to the RRB
Property.

     39.   In the event of a default by a Servicer under any Servicing
Agreement with respect to RRBs, the SPE or the trustees or representatives of
the holders of RRBs may appoint a successor Servicer for the RRB Property,
subject to the approval of the Commission, who shall promptly assume billing
responsibilities for RRB Charges.  The Commission shall act on an expedited
basis within 30 days to approve such successor Servicer.  Such successor
Servicer shall assume all rights and obligations under RSA Chapter 369-B and
this Finance Order as though it were the Servicer at the time such RRBs were
issued.

     40.   The Servicer will allocate amounts collected from each retail
customer on a pro rata basis among the SCRC and the Delivery charge, system
benefits charge, energy consumption tax, Hydro-Quebec support payments, and,
if applicable, the transition or default service charges as these charges are
identified in Section V of the Conformed Settlement Agreement.  Such amounts
so allocated to the SCRC shall, in accordance with the Conformed Settlement
Agreement, in turn be allocated pro rata among the RRB Charge, or Part 1 of
the SCRC, and to any remaining portion of the SCRC not the subject of a
finance order (i.e., Parts 2 and 3 of the SCRC, as described in the Conformed
Settlement Agreement).

     41.   A successor Servicer may not replace PSNH as Servicer in any of
its servicing functions with respect to the RRB Charge and the RRB Property
authorized by this Finance Order unless (i) such replacement is requested by
RRB holders, (ii) such replacement will not cause the then current credit
ratings on RRBs to be withdrawn or downgraded, or (iii) the successor
Servicer is the successor to PSNH's distribution system.

     42.   Regardless of who is responsible for billing of the RRB Charge,
the RRB Charge will be assessed against and collected from all PSNH's retail
customers taking retail electric service.  Any retail customer will continue
to be responsible for payment of the RRB Charge billed, but not yet remitted,
to the Servicer to the extent such customer has not paid the RRB Charge
billed to it.

     43.   In the event of a failure of any retail customer to pay the RRB
Charge, the Servicer or any approved TPS is authorized to disconnect retail
electric service to such customer in accordance with RSA 369-B:4, IV and
applicable regulations.

     44.   PSNH, as initial Servicer, or any successor Servicer, shall be
entitled to an annual Servicing Fee.  The Commission approves the Servicing
Fee as follows:  As initial Servicer, PSNH will be paid a Servicing Fee equal
to 0.25% of the outstanding principal balance of the RRBs, which fee will be
included in the calculation of the RRB Charge.  A successor Servicer will be
paid a Servicing Fee equal to no more than 1.5% of the outstanding principal
balance of the RRBs, if such successor Servicer is not billing the RRB Charge
in conjunction with other charges.  If the successor Servicer is billing the
RRB Charge in conjunction with other electric service charges, then the
Servicing Fee payable to such successor Servicer will be 0.25% of the
outstanding principal balance (equal to the fee payable to PSNH as initial
Servicer).

     45.   PSNH, as initial Servicer, may not voluntarily resign its duties
as Servicer without prior written approval of the Commission.  In any event,
PSNH shall not resign as Servicer if such resignation would result in the
reduction or withdrawal of the credit rating for the RRBs.

     46.   The establishment and procedures for maintenance of the Collection
Account, the General Subaccount, the Capital Subaccount, and the Reserve
Subaccount in accordance with the Transaction Description are reasonable,
consistent with the public good and are hereby approved.

     47.   Any amounts accounted for in the Reserve Subaccount, which
represent collections in excess of the fully funded credit enhancement
reserves, at the time that PSNH calculates a periodic RRB Charge adjustment,
will be incorporated in such adjustment, in accordance with RSA 369-B:4, III.
PSNH, as initial Servicer (or any successor Servicer), shall account for, and
ultimately credit to retail customers, any amounts remaining in the
Collection Account after the RRBs are paid in full, such as any
overcollateralization amounts, including interest earnings thereon, or RRB
Charge collections that remain after the Total RRB Payment Requirements have
been discharged.  Such amounts will be released to the SPE, upon retirement
of the RRBs and discharge of the Total RRB Payment Requirements.  These
amounts will be credited to retail customers through a subsequent ratemaking
proceeding or such other manner as the Commission may direct at that time.

Approval Regarding Municipalization

     48.   Pursuant to RSA 369-B:4, VIII, in the event of the
municipalization of a portion of PSNH's service territory, the Commission
shall, in matters over which the Federal Energy Regulatory Commission does
not have jurisdiction, or has jurisdiction but chooses to grant jurisdiction
to the State, determine, to a just and reasonable extent, the consequential
damages such as stranded investment in generation, storage, or supply
arrangements resulting from the purchase of plant and property from PSNH and
RRB Costs, and shall establish an appropriate recovery mechanism for such
damages.  Any such damages shall be established, and shall be allocated
between the RRB Charge and PSNH's other rates and charges, in a just and
reasonable manner.

Approval Regarding Administration Agreement

     49.   The Administration Agreement, to the extent it is substantially
consistent in material respects with the description of such agreement in the
Transaction Description and the draft submitted as part of Exhibit F-17,
under which PSNH shall perform administrative services and provide facilities
for the SPE to ensure that it is able to perform such day-to-day operations
under the RRB Transaction documents, including the amount of the
Administration Fee (which shall be an annual amount not to exceed 0.01% of
the original principal balance of the RRBs and which will be included in the
calculation of the RRB Charge), is reasonable and consistent with the public
good, and is hereby approved.

Approval Regarding Financial Accounting Treatment

     50.   The financial accounting treatment proposed by PSNH for the RRBs
and the RRB Transaction, as described in the Transaction Description, is
reasonable, consistent with the public good, and is hereby approved.

Approvals Regarding Reports

     51.   At least three business days in advance of the RRB issuance, PSNH
shall file with the Commission, for informational purposes, an Issuance
Advice Letter setting forth the final structural details of the RRBs,
including the repayment terms (in accordance with the expected amortization
schedule), the initial RRB Charge, the amount necessary for credit
enhancement, the identification of the SPE, and the transaction costs of
issuance. Such filing shall not be a condition to the effectiveness of this
Finance Order or the issuance of the RRBs.

     52.   Within 90 days following the RRB issuance, and within 60 days of
the end of each fiscal quarter thereafter until the proceeds have been
applied in full, PSNH shall file with the Commission a report showing the use
of RRB proceeds in compliance with this Finance Order.  Such filing shall not
be a condition to the effectiveness of this Finance Order or the issuance of
RRBs.

Approval Regarding Conditions Required Under RSA 369-B:3, IV(b)

     53.   In accordance with RSA 369-B:3, IV(b), this Finance Order is
subject to the following conditions:

     (1)   (A)   From Competition Day until initial transition service end
day (as defined in RSA 369-B:2, VII), PSNH shall supply transition service
and default service in its retail electric service territory.  After initial
transition service end day, any provider or providers of transition service
shall have been chosen through a competitive bid process, administered by the
Commission, to provide such service.  The Commission may, if it finds it to
be in the public interest, divide the competitive bid process into multiple
categories or multiple competitive bids;

     (B)   (i)   Transition service for residential customers, street
lighting customers, and general delivery service rate G customers shall be
available until 24 months after initial transition service end day.  From
Competition Day until initial transition service end day, the price of
transition service for these customers shall be $0.044 per kilowatt-hour.
From initial transition service end day to 12 months after initial transition
service end day, the price of transition service for these customers shall be
$0.044 per kilowatt-hour, or the competitively bid price for transition
service, whichever is less.  From 12 months after initial transition service
end day to 24 months after initial transition service end day, the price of
transition service for these customers shall be $0.046 per kilowatt-hour, or
the competitively bid price for transition service for these customers,
whichever is less.  If the competitively bid price exceeds these fixed
prices, the differences shall be reconciled for these customers in the manner
prescribed in the OPS;

     (ii)   At the end of the transition service period, up to 25 percent of
the residential customers, street lighting customers, and general delivery
service rate G customers who have not chosen a competitive supplier may be
assigned randomly to registered competitive suppliers other than the
transition service supplier or suppliers, if the Commission finds such random
assignment to be in the public interest.  The Commission shall develop
procedures and regulations for this assignment process.  Any random
assignment must be affirmatively approved by an individual customer;

     (C)   Transition service for all other customers shall be available
until 12 months after initial transition service end day. From Competition
Day to initial transition service end day, the price of transition service
for these customers shall be $0.044 per kilowatt-hour.  From initial
transition service end day to 12 months after initial transition service end
day, the price of transition service for these customers shall be the
competitively bid price for transition service;

     (D)   Any difference between the price of transition service from
Competition Day to initial transition service end day and PSNH's actual,
prudent and reasonable costs of providing such power shall first be separated
between the 2 groups of customers described in RSA 369-B:3, IV(b)(1)(B) and
(b)(1)(C), used first to offset any differences described in RSA 369-B:3,
IV(b)(1)(B), and the net then reconciled for each group of customers either
by changing the Recovery End Date, or by decreasing the SCRC, as the
Commission finds to be in the public interest;

     (E)  The Commission shall retain the authority to reject any or all bids
for transition service at its sole discretion if it finds such action to be
in the public interest.  Except as specifically provided in this section, the
Commission shall not accept any bid or implement any pricing strategy for
transition service that creates any deferrals;

     (F)   The selection of a provider or providers of default service prior
to 24 months after initial transition service end day may be combined with
the selection of a provider or providers of transition service to the extent
that the Commission finds it to be in the public interest;

     (2)  No amount shall be securitized which was not listed as part of the
$688,000,000 proposed for securitization in the April 19 Order, as reduced by
any subsequent amortization;

     (3)  Customer savings shall be not less than the total amount of
$450,000,000, excluding savings from rate reduction financing and merger
savings, including the $367,000,000 contained in the OPS and the $6,200,000
resulting from the settlement of issues pertaining to New Hampshire Electric
Cooperative, Inc.  A commitment by PSNH to all of the following actions shall
be deemed to satisfy this condition:

     (A)   PSNH shall credit customers with the higher return associated with
accumulated deferred income taxes (ADITs) as proposed in PSNH's May 1, 2000
filing;

     (B)   PSNH shall credit customers with the value derived from using its
own assets to provide transition service for a period of 9 months;

     (C)   PSNH shall extend from 30 months to 33 months the period during
which the delivery service charge, exclusive of Hydro Quebec transmission
support payments, is fixed at 2.8 cents per kilowatt-hour;

     (D)  PSNH shall absorb the first $7,000,000 of difference of costs that
results in the event that transition service costs during the 12 months
following the initial transition service end day exceed the transition
service price for that 12 months, as provided in RSA 369-B:3, IV(b)(1)(B)(i);

     (E)   PSNH shall reduce the maximum amount of necessary and prudent
costs associated with the issuance of and closing on the securitization
financing and any premiums associated with the retirement of debt and
preferred stock from these proceeds that may be recovered from $17,000,000 to
$15,000,000.  PSNH shall include in its costs the first $700,000 of the costs
of the office of the State Treasurer related to reviewing and issuing the
RRBs;

     (F)   PSNH agrees to move the Recovery End Date to one month earlier
than it would otherwise be; and

     (G)   PSNH agrees that if Competition Day has not occurred by October 1,
2000, then effective October 1, 2000 PSNH shall temporarily reduce its
current effective total rates (base rates plus FPPAC rates) by 5 percent
across the board until either Competition Day or April 1, 2001, whichever
occurs earlier.

     (4)   In the event that PSNH or its parent company is acquired or
otherwise sold or merged:

     (A)   Such merger, acquisition, or sale shall be subject to the
jurisdiction of the Commission under RSA Chapter 369, RSA Chapter 374, RSA
Chapter 378 or other relevant provisions of law, and the merger, acquisition,
or sale shall be approved only if it is shown to be in the public interest;

     (B)   In recognition of the extraordinary benefits provided to PSNH from
rate reduction financing, should PSNH or its parent company be acquired or
otherwise sold or merged, such merger, acquisition or sale shall be subject
to the jurisdiction of the Commission under the standard set forth in the
OPS.  The Commission may approve such a merger if such approval results in
the receipt by PSNH customers of a just and reasonable amount of the cost
savings that result from such merger, acquisition or sale.

      (C)   No acquisition premium paid by an acquiring company for the
assets or securities of any acquired company, resulting from any such merger,
acquisition or sale, may in any way increase rates at any time from what they
would have been without the acquisition premium;

     (5)   The delivery service charge, exclusive of the Hydro Quebec
transmission support payments, shall be fixed for a period of 33 months from
Competition Day at $0.028 per kilowatt-hour;

     (6)   The total system benefits charge shall be fixed at $0.002 per
kilowatt-hour for 33 months from Competition Day divided between low-income
assistance and energy efficiency/conservation programs.  In the event that
the Commission finds that a significant amount of unencumbered dollars have
accumulated in either program, and are not needed for program purposes, the
Commission shall refund such unencumbered dollars to ratepayers in a timely
manner;

     (7)   All currently existing opportunities shall be continued for retail
customers to generate or acquire electricity for their own use, other than
through retail electric service, without an exit fee;

     (8)   To the maximum extent allowed by federal law, non-discriminatory,
open access to PSNH's transmission system shall be available to customers,
electricity suppliers, marketers, aggregators, and municipal electric
utilities, with charges based only on rates set by federal regulations, plus
the actual cost of service for any services not subject to federal price
regulation plus, for retail customers, applicable SCRCs, RRB Charges, systems
benefits charges, and taxes;

     (9)   The SCRC, averaged over all customers, shall not exceed $0.0340
per kilowatt-hour.  Any changes in the delivery service charge, SCRC,
transition service charge, systems benefits charge, or any other charge
between the estimated amounts in the First Settlement Order and 24 months
after Competition Day shall be applied as an equal change in the cost per
kilowatt-hour for all rate classes to which they apply;

     (10)   The Commission shall not order changes in the total rates of
customers taking service under special contracts approved pursuant to RSA
378:18 for the duration of those special contracts in effect as of May 1,
2000.  Special contract customers selecting option 2 of the Original
Settlement Agreement shall have the energy charges under the contract reduced
by the initial transition service price;

     (11)   During any sale of electricity generation assets required by this
settlement, neither PSNH, nor any affiliate of PSNH, nor any company that
would become an affiliate of PSNH if an announced merger, acquisition or sale
were to be consummated, may bid for those assets;

     (12)   During any competitive bid process to determine a provider or
providers of transition service, or of default service to any customer
belonging to a rate class that at the time of service is eligible to receive
transition service, neither PSNH, nor any affiliate of PSNH, nor any company
that would become an affiliate of PSNH if an announced merger, acquisition or
sale were to be consummated, may bid to provide such service;

     (13)   The Commission shall administer the liquidation of any
electricity generation assets required to be sold by the settlement.  Any
sale of assets located in the state of New Hampshire that are administered by
the Commission pursuant to this paragraph shall be conducted in this state.
The Commission shall select the independent, qualified asset sale specialist
who will conduct the asset sale process.  PSNH shall be allowed to comment
prior to the selection of any such specialist;

     (14)   The Commission shall administer any competitive bid process for
transition service or default service required by the settlement;

     (15)   Subject to the approval of the Federal Energy Regulatory
Commission, in the event that the Commission either rejects a proposed sale
of Seabrook, or fails to act on such application within 180 days after NAEC's
proposed sale application is filed with the Commission, and the failure of
the sale is through no fault of NU or PSNH, NAEC's return on equity shall be
increased from 7 percent to 150 basis points more than the average 10-year
Treasury bond yield for the preceding 6 months, but not less than 7 percent
nor more than 11 percent, and then readjusted accordingly at the end of every
6 month period; and

     (16)   This Finance Order shall not be final or effective until PSNH and
NU have agreed to dismiss with prejudice on Competition Day PSNH's and NU's
claims and causes of action in all pending litigation associated with the
implementation of RSA Chapter 374-F, including civil action No. 97-97-JD (New
Hampshire) / 97-121 L (Rhode Island).

Approval Regarding Investment in NU Money Pool

     54.   PSNH is authorized to invest in the NU Money Pool once the
write-offs associated with the Conformed Settlement Agreement have been
taken, and, accordingly, the restriction on such investment that was extended
by the Commission in PSNH's most recent financing case, Docket No. DE 00-016,
in Order No. 23,416, issued March 1, 2000, shall terminate upon the taking of
such write-offs.  This approval is subject to the provisions of RSA 365:28.

Approval Regarding Application of Restructuring Payments by NAEC

     55.   Pursuant to Section VIII.K of the Conformed Settlement Agreement,
NAEC is authorized to repay up to $135 million in First Mortgage Bonds and up
to $200 million in Term Notes to most efficiently reduce its costs, and to
issue a dividend to NU or repurchase NAEC common stock from NU.


                               V.     ORDER

Based on the foregoing, it is hereby

     ORDERED, that PSNH's Petition for Issuance of a Finance Order is
APPROVED, as modified by and subject to the terms of the Transaction
Description contained herein, and consistent with the Findings and Approvals
and Authorizations granted.

     By order of the Public Utilities Commission of New Hampshire this eighth
day of September, 2000.


Douglas L. Patch              Susan S. Geiger      Nancy Brockway
Chairman                       Commissioner        Commissioner

Attested by:


Debra Howland
Acting Executive Director


                              EXHIBIT 1 ALL-IN COST<FMN 11>

All-in Cost computation:

The all-in cost will be the internal rate of return of the series of
cashflows beginning with the initial principal balance, followed by the
Periodic RRB Payment Requirement to be paid at each payment date.  All
computations will be based on a 30/360 day-count convention and semi-annual
compounding.

For all-in cost, solve for r.

r = all-in cost
p = scheduled principal payment
i = scheduled interest payment
f = overcollateralization (net of interest earnings) and fees and expenses
    (excluding servicing fees)
P = initial issuance amount
t = payment period (which, in the case of the first or last payment period,
    may be more or less than a full period)
T = total number of payment periods
n = number of payment periods in a year (e.g. for semiannual payments, n=2)


Illustrative Example:<FN 12>

Assumptions
Issuance amount:                  $100mm
Issuance date:                    1/1/2000
Final maturity:                   1/1/2004
Payment dates:                    January 1st every year
Coupon:                           7.5% per annum
Overcollateralization             $0.04 mm
(net of interest earnings) and
fees and expenses per annum
(excluding servicing fees)


Principal Payment Schedule:

                       Payment Date   Principal Payment   Principal Ending
                                             ($mm)            Balance ($mm)
                         Issuance date      -                  100
                         1/1/2001           10                  90
                         1/1/2002           20                  70
                         1/1/2003           30                  40
                         1/1/2004           40                   -
                         Total            $100                   -

Calculation

Payment  (t) Payment (p) Principal     (i) Interest           (f)(p)+(i)(f)
Date         Period      Payment ($mm)     Payment  Overco-       ($mm)
                                           ($mm)    collateral
                                                    -ization
                                                     Fees, and
                                                    Expenses ($mm)

1/1/2001        1          10.00             7.50      0.04         17.54
1/1/2002        2          20.00             6.75      0.04         26.79
1/1/2003        3          30.00             5.25      0.04         35.29
1/1/2004        4          40.00             3.00      0.04         43.04
Total                     100.00

Payments are annual so n = 1.

 17.54  +  26.79  +  35.29  +  43.04 y  100 =  0

(1+r)1    (1+r)2    (1+r)3     (1+r)4

Solve for r.

All-in cost = r = 7.55%


EXHIBIT 2
PRE-TAX REVENUE WACC

As used in this Finance Order, "Pre-Tax Revenue WACC" shall mean, as of any
date, PSNH's "ROR" (rate of return) set forth in its most recent filing with
the Commission pursuant to Docket No. IR 90-218, multiplied by the applicable
"GRCF" (gross revenue conversion factor) filed with the Commission pursuant
to Docket No. DR 97-059, calculated in accordance with the following
example:13

Calculation of ROR

Capital Structure  3/31/99Begin  3/31/00End of   Average  %   Embedded   ROR
Average           ning of Period  Period(000s)   (000s)        Cost
                    (000s)

Long Term Debt       $516,485    $516,485    $516,485   39.40%  8.24%  3.25%
Preferred Stock        75,000     50,000      62,500    4.77%   9.54%  0.46%
Issued
Common Equity         701,652     761,821    731,737   55.83%   9.62%  5.37%
Total              $1,293,137  $1,328,306  $1,310,722  100.00%         9.07%
Capitalization


Calculation of Embedded Cost

Total Cost of Long Term Debt         $42,539/   $516,485    =    8.24%
Preferred Dividends Declared          $5,963/   $ 62,500    =    9.54%
ROE Calculation                      $70,396/   $731,737    =    9.62%
                               (Earnings for  (Average Common
                                      Common)   Equity)         (Net Income
                                                               ROE),<FN 14>


Calculation of Pre-Tax Revenue WACC

                               ROR         GRCF          Pre-Tax Revenue
                                                             WACC

Long Term Debt                3.25%      1.0000               3.25%
Preferred Stock Issued        0.46%      1.5489               0.70%
Common Equity                 5.37%      1.5489               8.32%

Total                                                        12.27%


Pre-Tax Revenue WACC = 12.27%


                          EXHIBIT 3  WEIGHTED AVERAGE LIFE

Weighted Average Life (WAL) computation:

To calculate the WAL of the RRBs, sum the product of each principal payment
with the number of days between the corresponding principal payment date and
the RRB issuance date (based on a 360-day year and 30-day months).  Then,
divide this sum by the product of the total principal amount of the RRBs and
360 to calculate the WAL in years.


p  = scheduled principal payment
d  = payment date
I  = issuance date
t = payment period (which, in the case of the first or last payment period,
may be more or less than a full period)
P = initial issuance amount
T = total number of payment periods
Note: (dt-I) represents days from and excluding issuance date (I) to and
including payment date (dt), based on a 360-day year of twelve 30-day months.

Illustrative Example: <FN 15>

Assumptions
Issuance amount:  $100mm
Issuance date:    1/1/2000
Final maturity:   1/1/2010

Payment dates:    January 1st every year

Principal Payment Schedule:

                          Payment Date  Principal Payment  Principal Ending
                                                  ($mm)     Balance ($mm)
                           Issuance date       -                 100
                           1/1/2001            5                  95
                           1/1/2002            5                  90
                           1/1/2003            5                  85
                           1/1/2004            5                  80
                           1/1/2005            5                  75
                           1/1/2006            10                 65
                           1/1/2007            10                 55
                           1/1/2008            15                 40
                           1/1/2009            20                 20
                           1/1/2010            20                  -
                             Total            $100

Calculation

Payment Date  (t) Payment  (pt) Principal (dt-I) Days Between  pt(dt-I)
                  Period    Payment ($mm)  Issuance Date and
                                           Payment Date

1/1/2001             1           5              360             1,800
1/1/2002             2           5              720             3,600
1/1/2003             3           5            1,080             5,400
1/1/2004             4           5            1,440             7,200
1/1/2005             5           5            1,800             9,000
1/1/2006             6          10            2,160            21,600
1/1/2007             7          10            2,520            25,200
1/1/2008             8          15            2,880            43,200
1/1/2009             9          20            3,240            64,800
1/1/2010            10          20            3,600            72,000
   Total                       100                            253,800


= 7.05 years




Footnotes

FN1  See OPS at 61:1755 and at Appendix C thereto.  The first two assets
listed above  Seabrook Over-Market Generating Assets (NAEC) and Millstone 3
Over-Market Generating Assets  are amortizing assets.  The amount shown for
each such asset is its estimated balance as of January 1, 2000, as set forth
in the OPS.  The amount shown for the fifth asset listed above  Financing
Costs  is the parties' agreed-upon maximum amount of financing costs to be
securitized pursuant to the OPS.  OPS at 19:520.  In accordance with the OPS,
the amounts of the third and fourth assets listed above  Acquisition Premium
and Acquisition Premium - FAS 109  are measured as the difference between
$725 million and the amount of the other three assets listed.  OPS at 19:523.
Thus, in accordance with the OPS, these amounts would increase as the amount
of each of the first two amortizing assets decreases, and would also increase
if the actual amount of financing costs is less than $17 million, so that the
total amount to be securitized would remain equal to $725 million.

FN2  Competition Day is defined in RSA 369-B:2, III, which in turn
references the definition provided in the OPS ("Competition Day").

FN3 Out of 39 conditions contained in the April 19 Order, PSNH requested
rehearing with respect to one that it did not unconditionally accept, and
sought clarification and modification of several others.

FN4  The $670 million securitization limitation is set forth in RSA
369-B:3, IV(b).  RSA 369-B:3, IV(b) also provides that such limitation shall
be reduced by $6 million for each month from October 1, 2000 to Competition
Day.   The $15 million limit on the recovery of financing costs and costs of
premiums associated with retirement of debt and preferred stock is set forth
in RSA 369-B:3, IV(b)(3)(E).  PSNH shall include within this cap on cost
recovery the first $700,000 of the costs of the office of the State
Treasurer.  Thus, to the extent that the State Treasurer incurs costs of
$700,000 or more, PSNH's recovery of its costs will be limited to $14.3
million.

RSA 369-B:3, IV(a) authorizes $130 million in RRBs to finance
renegotiated agreements of existing power purchase obligations requiring PSNH
to purchase power from six wood-to-energy facilities and one trash-to-energy
facility.  This amount is in addition to the $670 million securitization
level authorized in RSA 369-B:3, IV(b).

FN5  The definitions of "retail customers" and "retail electric service" set
forth in RSA 369-B:2, XI and XII are incorporated herein.

FN6  In its Response to Order No. 23,443 dated May 1, 2000 (the "Response
to April 19 Order"), PSNH proposed to securitize stranded costs in an amount
not greater than $575 million, including financing costs of $17 million.  See
Response to Order No. 23,443, Attachment A, p. 11.  This proposal was further
reduced by PSNH to not greater than $573 million to comply with the $15
million limit on securitizable financing and debt retirement premium costs
set forth  in RSA 369-B:3, IV(b)(3)(E).  During the July 7, 2000 hearing, the
GOECS and Settlement Staff provided testimony recommending that the finance
order authorize the issuance of the full amount authorized by the
Legislature, giving the Company the discretion to issue whatever amount it
determined was most appropriate, and having the Commission review the
prudence of the Company's decision at a later time.  The final securitization
amount will be determined immediately prior to RRB issuance and will reflect
asset amortizations, actual financing costs, and the effect of the cost
recovery limitations required by RSA 369-B:3, IV(b)(3)(E).

FN7  The reference to "exit fees" on pages 1 and 3 of Attachment MAE-1 will
be eliminated in the final form of the Issuance Advice Letter.

FN8  RSA 369-B:4, V provides that the finance order shall specify how amounts
collected from a retail customer shall be allocated between the RRB Charge
and other rates and charges.

FN9  The actual use of proceeds amount will be adjusted, as necessary, to
reflect the final securitization amount.  See supra note 6 and accompanying
text.

FN10  See supra notes 1, 4 and 6 and accompanying text.

FN11  The method herein for calculating all-in cost is consistent with the
Conformed Settlement Agreement, in which the term "All-In Cost" is defined as
"The cost of the RRBs, including the coupon rate, any discounts or premiums,
ongoing fees, the overcollateralization account, [SPE] expenses, any letter
of credit costs, but excluding servicing fees."

FN12  All numbers are for illustration purposes only.

FN13  Although taken from PSNH's actual May 1, 2000 filing with the
Commission pursuant to Docket No. IR 90-218, all numbers are for illustration
purposes only.

FN14  The "ROE Calculation" shall equal the lesser of (i) PSNH's actual ROE
(as calculated above) and (ii) the 11.00% ROE allowed by the Commission in
Docket No. DR 97-059.

FN15  All numbers are for illustration purposes only.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>EXHIBIT 3.2.3 - NHPUC ORDER RE CONFORMED SETTLEMEMT AGMNT
<TEXT>



 EXHIBIT 3.2.3




                           Public Utilities Commission


                                   DE 99-099

                                 PSNH  Proposed
                             Restructuring Settlement

             Order Addressing Motions for Clarification and Rehearing,
                Amended Settlement Agreement  and Financing Issues

                                Order No. 23,549

                               September 8, 2000

































                          Douglas L. Patch, Chairman
                          Susan S. Geiger, Commissioner
                          Nancy Brockway, Commissioner



                              TABLE OF CONTENTS




                                 DE 99-099

                   Public Service Company of New Hampshire

                       Proposed Restructuring Settlement

              Order Addressing Motions for Clarification and Rehearing,
                        and Conformed Settlement Agreement

                             O R D E R   N O.  23,549

                               September 8, 2000

     APPEARANCES:  Robert A. Bersak, Esq., Gerald M. Eaton, Esq. and Sulloway
& Hollis by Martin L. Gross, Esq. for Public Service Co. of New Hampshire;
Foley, Hoag & Eliot, L.L.P. by James K. Brown, Esq., Stephen J. Judge, Esq.
and Wynn E. Arnold, Esq. of the New Hampshire Attorney General's Office for
the Governor of New Hampshire, the Governor's Office of Energy and Community
Services and the New Hampshire Attorney General; Mark W. Dean, Esq. of Dean,
Rice & Kane, for New Hampshire Electric Cooperative; Seth Shortlidge, Esq.
and Lisa Shapiro of Gallagher, Callahan & Gartrell, for Wausau Papers; Rep.
Jeb Bradley, member of the Legislature, pro se; Rep. Gary Gilmore, member of
the Legislature, pro se; Connie Rakowsky, Esq. of Orr & Reno P.A. for the
Granite State Hydro Association and individual hydro-electric facilities;
David W. Marshall, Esq. for the Conservation Law Foundation; John Ryan, Esq.
for the Community Action Program; Alan Linder, Esq. of New Hampshire Legal
Assistance, for the Save Our Homes Organization; James Rubens for THINK - New
Hampshire; Pentti Aalto for PJA Energy Systems Designs; Peter H. Grills, Esq.
and Elizabeth I. Goodpaster, Esq. of O'Neill, Grills & O'Neill, for the City
of Manchester; Susan Chamberlin, Esq. of Donahue, Tucker & Ciandella, for the
City of Concord; Carlos A. Gavilondo, Esq. for Granite State Electric/New
England Power Company; Robert A. Olson, Esq. of Brown, Olson, and Wilson
representing six wood-fired power plants; Steven V. Camerino, Esq. of McLane,
Graf, Raulerson & Middleton, for Great Bay Power Corp. and the City of
Claremont; Timothy W. Fortier for the Business & Industry Association of
N.H.; James A. Monahan and Andrew Weissman, Esq. of Morrison & Foerster,
L.L.P. for Cabletron Systems, Inc.; Joshua L. Gordon, Esq. and Robert A.
Backus, Esq. For the Campaign for Ratepayers' Rights; Robert Upton II, Esq.
of Upton, Sanders & Smith for the Towns of Bow, New Hampton, Gorham,
Hillsboro and Franklin; Robert P. Cheney, Jr., Esq. of Sheehan Phinney Bass &
Green P.A., representing JacPac Foods, Ltd.; Mary Metcalf for Seacoast
Anti-Pollution League; James T. Rodier, Esq. for Consumers Utility Service
Cooperative and Freedom Partners, LLC; Michael W. Holmes, Esq. and Kenneth
Traum of the Office of Consumer Advocate representing Residential Ratepayers;
John E. McCaffrey, Esq. of Morrison & Hecker, LLP for PUC Staff Advocates;
Lynmarie Cusack, Esq. of the NH Public Utilities Commission for PUC
Settlement Staff, and Larry Eckhaus, Esq. for the Staff of the New Hampshire
Public Utilities Commission.

     This order decides various motions for clarification and rehearing of
our April 19, 2000 Order, Order No. 23,443 (referred to hereinafter as either
Order No. 23,443 or the April 19 Order), which approved with conditions a
Settlement Agreement in this Docket.  This order also approves the Conformed
Settlement Agreement filed June 23, 2000, with certain modifications.  A
separate Financing Order for the issuance of Rate Reduction Bonds (RRBs) is
issued contemporaneously herewith.

     The original Settlement Agreement, that is the subject of Order No.
23,443, involved a comprehensive proposal designed to resolve the outstanding
issues surrounding the restructuring of the state's largest electric utility,
Public Service Company of New Hampshire (PSNH), pursuant to the Electric
Utility Restructuring Act, RSA 374-F and its mandate for retail competition
in the sale of electricity.  The approval with conditions of the Settlement
Agreement was intended to foster the conclusion of ongoing federal litigation
between PSNH and the Commission over restructuring issues, and to resolve
numerous open dockets that concern related subjects.

     A.   Background

     In Order No. 23,443, the Commission set out a detailed history of the
proceedings that led to the controversies over PSNH's restructuring, and of
the procedural history of this docket through the date of that Order.  That
procedural history is incorporated herein by reference and is updated below.

     B.   Post-Order Filings and Proceedings

     On May 1, 2000, PSNH submitted its response to Order No. 23,443, as
required in that Order.  PSNH accepted the bulk of the conditions set forth
in Order No. 23,443, provided conditional acceptance of other conditions, set
forth a new proposal regarding Transition Service and did not accept the
condition concerning reduction of Part 3 stranded costs by $78.6 million.

     On May 1, 2000, PSNH also submitted a Motion for Rehearing of Order No.
23,443.  On May 1, 2000, the Governor's Office of Energy and Community
Services (GOECS) and Settling Staff submitted their responsive filing as
required by Order No. 23,443.

     On May 3, 2000, the Commission issued an Order of Notice establishing a
procedural schedule culminating in a hearing on PSNH's Motion for Rehearing
and requesting that PSNH respond to certain questions concerning its May 1,
2000 filings.

     On May 4, 2000, the Towns of Bow, Hillsboro and Gorham, the City of
Franklin and the Village Precinct of New Hampton filed a Motion for
Clarification of Order No. 23,443, seeking two modifications or
clarifications concerning the application of employee protections required by
the original proposed Settlement Agreement to hydro-electric plants that
might be purchased by municipalities.

      On May 8, 2000, GOECS filed a letter commenting preliminarily on PSNH's
May 1, 2000 Motion for Rehearing, PSNH's May 1, 2000 compliance filing, and
the Commission's May 3, 2000 Order of Notice regarding the PSNH filings.

     On May 8, 2000, Great Bay Power Corporation filed its Objection to
PSNH's Motion for Rehearing and Response to PUC Order.  On May 12, 2000,
Great Bay Power Corporation filed Comments Regarding PSNH's Motion for
Rehearing and Response to Order No. 23,433.

     On May 15, 2000, the Governor's Office of Energy and Community Services
and Settlement Staff of the Public Utilities Commission filed more extensive
comments Regarding PSNH's Motion for Rehearing and Response to
Order No. 23,443.

     On May 17, 2000, the Commission held a hearing on the issues presented
in PSNH's Motion for Rehearing and its Response to Order No. 23,443, insofar
as the Response did not expressly accept the conditions set forth in Order
No. 23,443.

     On May 19, 2000, Motions for Rehearing or Reconsideration were filed by
(1) CRR, Granite State Taxpayers, Inc. THINK-NH, and NH Public Interest
Research Group, Inc., (2) Freedom Partners, LLC (Freedom), (3) the OCA,
EnerDev, Inc., and Granite State Taxpayers, Inc., (4) Wausau Papers of NH,
Inc., (5) Cabletron Systems, Inc. (Cabletron), (6) Great Bay Power
Corporation (Great Bay), and (7) the Business and Industry Association (BIA).

     On May 24, 2000, the Director of the New Hampshire Division of Air
Resources filed a letter informing the Commission of minor technical
inaccuracies concerning environmental issues found in Order No. 23,443.

     On May 26, 2000, PSNH filed its Objection to the Motions for Rehearing
from Great Bay, OCA, EnerDev, Inc, Granite State Taxpayers, Inc., CRR,
Granite State Taxpayers, Inc., Think-NH, NHPIRG, Inc., Cabletron Systems,
Inc., and Freedom Energy Partners L.L.C.  On May 26, 2000, Settlement Staff
and GOECS filed their Objection to Intervenors' Motions for Rehearing and
Motions for Reconsideration.

     By letter dated June 8, 2000, Freedom advised the Commission that,
because of the likely passage of Senate Bill 472 (SB 472), which addressed
conditions for approval of PSNH restructuring financing, Freedom would
withdraw Paragraphs 1 through 7 of its Motion for Reconsideration pertaining
to Transition Service.  Paragraphs 8 through 12 were not withdrawn, according
to Freedom, because those paragraphs pertain to the Commission's statutory
and constitutional authority and responsibilities in conducting a utility
rate case in accordance with Appeal of Richards 134 N.H. 148 (1991).

     On June 12, 2000, SB 472 was enacted as Chapter 249 of the Laws of 2000.
Among other things, Chapter 249 set out a comprehensive scheme for the
issuance of rate reduction bonds (RRBs) to "securitize" stranded cost
obligations of consumers under a PSNH restructuring.  The legislation
includes fifteen findings of fact, some of which contain declarations as to
the consistency of various components of the Settlement Agreement and our
April 19 Order with legislative determinations of the public interest, as set
out in earlier restructuring statutes, and as further determined in the
balance of the legislation.  To some extent, such findings of public interest
gave more specific content to earlier legislative directives to the
Commission regarding standards for approval of PSNH's restructuring plan.
The legislation also conditioned the Commission's authority to approve rate
reduction bonds, such that approval of securitization for PSNH would require
certain alterations to the Settlement Agreement and the April 19 Order.

     On June 12, 2000, the Commission through its General Counsel advised the
parties that, in light of the enactment into law of SB 472, and assuming it
is the intent of PSNH to continue to seek approval of the Settlement
Agreement at issue in this docket, the Commission had determined that it was
necessary for PSNH, GOECS and Settlement Staff to provide the Commission with
several filings, no later than June 23, 2000.  PSNH was directed to inform
the Commission whether the new statutory provisions would alter in any way
the Company's pending Motion for Rehearing, and, if so, to file an update of
its response to Order No. 23,443, to include the Company's response to
legislated conditions to rate reduction bond financing.  PSNH, the State
Parties and the Attorney General were directed to file a revised Settlement
Agreement reflecting compliance with the various changes accepted by the
signatories during the course of the hearings, with Order No. 23,443
conditions, and with requirements set forth in SB 472.  PSNH was required to
file a request, within this docket, for a finance order pursuant to which
RRBs would be issued, including a proposed form of financing order.  Parties
other than PSNH that had filed motions for clarification or rehearing were
directed to file a statement as to the effect, if any, of the revised
Settlement Agreement or the new statutory provisions, by July 5, 2000.

     On June 23, 2000, PSNH filed the Conformed Agreement to Settle PSNH
Restructuring (hereinafter referred to as Conformed Agreement, CSA) in
compliance with the requirements set forth in the June 12 Notice.  That
filing also contained a Motion for Findings of Fact and for Issuance of
Finance Order, a description of the proposed rate reduction bond transaction
to be included in a finance order, (attachment A), proposed findings to be
included in a finance order (attachment B) and proposed orders and approvals
to be included in the finance order (attachment C).

     On June 23, 2000, Cabletron filed its Motion to Withdraw its May 19,
2000 Motion for Rehearing and its May 24, 2000 Motion of Concurrence with
Great Bay Power Corporation, the Office of the Consumer Advocate, and the
Campaign for Ratepayer's Right's Motion for Rehearing.  Similarly, Wausau
Papers withdrew its Motion for Rehearing on July 5, 2000.

     On June 29, 2000, Great Bay filed its Objection to PSNH's Motion for
Findings of Fact and for Issuance of Finance Order.  On July 5, 2000,  Great
Bay advised the Commission that it continues to seek a ruling on its Motion
for Rehearing as submitted.

     On June 30, 2000, Campaign for Ratepayers Rights, Granite State
Taxpayers, Inc. THINK-NH and NH Public Interest Research Group, Inc. (CRR et
al ), filed an Amended Motion For Rehearing, requesting that they be allowed
to amend their previously-filed Motion for Rehearing to contain the issues
raised in Cabletron's May 19, 2000 Motion for Rehearing.  On July 5, 2000,
PSNH objected to this Amended Motion for Rehearing.

     On July 5, 2000, the OCA filed a letter in response to the Commission
letter of June 12, 2000, declining to withdraw its Motion for Rehearing, or
alternatively, in the event the Commission has concluded the Rate Agreement
is a contract, requesting that the Commission specify the facts in its order
that comply with the Supreme Court's decision in In Re New Hampshire Public
Utilities Commission Statewide Restructuring, 143 N.H. 233 (1998).

     On July 6 and 7, 2000, the Commission held hearings on the revised
Settlement Agreement and proposed financing order.

     On July 24, 2000, PSNH, OCA, GOECS and Settling Staff, Representative
Bradley, Great Bay, and Wausau Papers filed post-hearing briefs on PSNH's
proposed compliance filing and/or financing order.  On July 28, 2000, CRR
filed a request to be permitted to comment late on the issue of the level of
securitization, and included its comments on this topic.

     On August 11, 2000, counsel for the State of New Hampshire Treasurer
filed a letter disagreeing with PSNH's assertion in record responses that the
Treasurer would oversee the use of RRB proceeds by PSNH.

     On August 23, 2000, Cabletron and other parties wrote to urge the
Commission to issue outstanding Orders on Rehearing and Securitization
Financing in DE 99-099 by September 1, 2000.  On August 28, 2000, the
Commission received a similar letter from Senator Beverly Hollingworth.

     On August 28, 2000, the Commission's General Counsel notified the
parties by letter that it was necessary to convene a technical session to
address certain questions and to obtain clarification on certain portions of
the proposed finance order.  That technical session was held on August 31,
2000 at which time PSNH requested that it be allowed to file written comments
on the proposed finance order.  Those comments were filed on September 1,
2000.

     In three of the motions for rehearing or reconsideration, the objection
is posed that the April 19 Order determined stranded cost recovery or
transmission and distribution rates, or both, without sufficient factual
basis or analysis, in contravention of the restructuring statutes and
contrary to applicable ratemaking standards.  The particular claims vary from
party to party, but all share a fundamental concern about the legal standard
that determined the Commission's findings and analysis in the April 19 Order.

     Specifically, Great Bay, Freedom, and the OCA, joined by EnerDev, Inc.
and Granite State Taxpayers, argue variously that the Commission was obliged
to conduct a "used and useful" analysis to determine what plant costs
included in stranded cost recovery would have been recoverable under
traditional ratemaking, was obliged to examine whether the rates proposed
under the April 19 Order were lower than those that would have been obtained
in a traditional rate case, was obliged to determine whether the Rate
Agreement was a contract, and otherwise to have included in the benchmarking
comparison of the Settlement Agreement a detailed determination of each of
the dockets subsumed under the Settlement Agreement as well as numerous
specific theories for alternative ratemaking.

     Great Bay specifically objected that the April 19 Order failed to review
capital additions made after the effective date of RSA 374-F and thus did not
preclude the unlawful inclusion of such costs in stranded cost recovery
(SCR), and that it failed to ensure that construction work in progress (CWIP)
is excluded from transmission and distribution (T&D) rates notwithstanding
the use of projections on which to set rates.  Great Bay further complained
that the Commission did not apply any standard to approve the delivery rate
proposed in the Settlement Agreement, failed to set a reasonable rate of
return for T&D costs, failed to apply PSNH's actual capital structure in
setting delivery rates, and failed to use actual cost data to set the
delivery rate.  Great Bay objects to the stranded cost recovery charge (SCRC)
on the grounds that it employs a fixed cost of capital out into the future,
and cannot be reconciled with the requirement that rates of return reflect
actual capital costs as they change from time to time.

     Finally, Great Bay and OCA argue that the Commission's benchmarking
analysis was flawed because it failed to contain a determination of the
outcome of each of the specific cases subsumed under the Settlement
Agreement.

     Neither Great Bay's objection to the level of analysis in the April 19
Order, nor those of the other parties noted, were withdrawn after the passage
of SB 472.

     GOECS and Settling Staff filed an objection to the various motions for
rehearing on May 26, 2000.  In its Objection, GOECS and Settling Staff first
set out the standard of review for considering a motion for rehearing.  They
state that in New Hampshire, rehearing may only be granted for "good cause,"
and the Court has defined "good cause" to mean new evidence that could not
have been provided at the original hearing, citing Appeal of Gas Service,
Inc., 121 N.H. 797 (1981).  They further state that our Supreme Court has
held that the purpose of rehearing is "to direct attention to matters said to
have been overlooked or mistakenly conceived in the original decision, and
thus invites reconsideration upon the record upon which that decision
rested," citing Dumais v. State Personnel Commission, 118 N.H. 309, 312
(1975)[citations omitted].  GOECS and Settling Staff assert that the moving
parties have failed to assert good cause to set aside or vacate Order No
23,433.  According to GOECS and Settling Staff, the moving parties have
failed to demonstrate that the Order is contrary to law, or that a clear
preponderance of the evidence demonstrates that it is unjust or unreasonable,
citing Appeal of Ashland Electric Department, 141 N.H. 336 (1996).

     According to GOECS and Settling Staff, the assertion of CRR et al that
the stranded cost recovery is greater in the April 19 Order than allowed by
RSA 374-F:3, XII lacks merit.  For example, the assertion that Section XII(d)
requires that stranded costs be "reconciled ... from time to time," ignores
the fact that the language of the restructuring principles is expressly
framed as guidelines, and that the various policy goals contained in Section
XII require a reasonable balancing by the Commission.

     With regard to the arguments of OCA et al that the "clear intent of the
legislation" was to insure that the settlement offers ratepayers at least as
many benefits as full litigation of all the dockets would provide, GOECS and
Settling Staff point out that, if that were the case, the Legislature would
simply have forbidden settlements, which by definition are an alternative to
full litigation.  GOECS and Settling Staff note that the ultimate test of
such a settlement is whether the result is "just and reasonable and serves
the public interest," citing N.H. Admin. Rule Puc 203.09(a).  GOECS and
Settling Staff further cite the Commission's findings in the April 19 Order
that "the rate decrease benefits achieved under the Settlement Agreement are
greater than those that are likely to be achieved under the business-as-usual
scenarios," citing Order No. 23,443 at 182.

     With regard to OCA's criticism that the Commission did not determine
whether the Rate Agreement is a contract, GOECS and Settling Staff argue that
this question is the subject of federal litigation, and could not be
meaningfully addressed by the Commission in this proceeding without revealing
its litigation strategy.  They further argue that the OCA failed to state how
the Commission's benchmarking analysis would have been changed had the
Commission determined whether the Rate Agreement is a contract.  Even if the
Rate Agreement were found not to be a contract, recoverability of stranded
costs would remain an issue, according to GOECS and Settling Staff.

     Addressing Great Bay's arguments, GOECS and Settling Staff first assert
that Great Bay did not support its claim that capital additions made after
the date of the restructuring statute were unnecessary, in the face of PSNH's
prima facie case justifying their inclusion in stranded costs.  They further
argue that the complaint of Freedom and Great Bay that the Commission failed
to apply the "used and useful" standard ignores the fact that whether an
asset is used and useful can change with circumstances over time, and
therefore is not permanent, and should not be used as a standard in this
proceeding.  GOECS and Settling Staff call Mr. McCluskey's "used and useful"
method "untested in New Hampshire," and assert that even if the Commission
had accepted this approach, there was no showing that the "excess capacity"
status would continue over time.  GOECS and Settling Staff argue that the
Commission rejected Mr. McCluskey's approach, in light of the permanent
resolution of restructuring that the settlement offers.

     With regard to Great Bay's argument that each area of controversy be
fully litigated before any settlement is approved, GOECS and Settling Staff
assert that this view is counter to the very nature of settlements.  They
further argue that the moving parties had an opportunity to show that various
elements of stranded costs should not be recovered, and they have failed to
do so.

     GOECS and Settling Staff also counter Great Bay's argument that the
Commission failed to apply a statutory or constitutional standard in
approving the delivery rate.  They state that the Commission went to great
lengths to analyze the reasonableness of the delivery rate proposed in the
Settlement Agreement.  They state that the entire benchmarking analysis
conducted by the Commission was based on traditional ratemaking principles.
They further assert that there is nothing in the record to support Great
Bay's specific claim that the rates approved in the April 19 Order include
CWIP.  Likewise, they state, Great Bay failed to support its assertion that
the Commission did not make a finding as to the adequacy of the capital
structure of PSNH under the Settlement Agreement.

     With regard to Freedom's allegation that the rates approved in the
Settlement Agreement are exploitative, GOECS and Settling Staff argue that
the benchmarking analysis supported the Commission's finding that the overall
settlement supports a result that is in the public interest, and an overall
rate that is just and reasonable, citing 1999 N.H. Laws 289:4 and RSA 378:28;
Federal Power Commission v. Hope Nat. Gas Co., 320 U.S. 591 (1944).

     In their Brief filed July 24, 2000, GOECS and Settling Staff addressed the
statutory framework in which our review of the Conformed Settlement Agreement
must take place.  GOECS and Settling Staff argue that the August 2, 1999
Settlement Agreement has been modified twice, first by the Commission and then
by the Legislature.  According to GOECS and Settling Staff, the
Legislature amended some of the Commission's amendments, while still
capturing value comparable to that which the Commission added to the original
Agreement.  With certain minor changes, GOECS and Settling Staff argue that
the proposed Finance Order and the Conformed Settlement Agreement are in the
public interest, and that the changes incorporated therein as a result of SB
472 achieve the balancing required by the Commission in Order No. 23,443.
They urge the Commission to so find, particularly as there was no evidence
submitted in the July hearings to the contrary.

     GOECS and Settling Staff argue that, even if the PSNH Motion for Rehearing
is granted with respect to certain identified tax issues, the Conformed
Settlement Agreement is in the public interest.  They note that PSNH has
submitted an exhibit quantifying the value of the Company's undertakings
required by SB 472 as a condition of securitization, and that the midpoint of
the range of value is $474,000,000 (Exh. F-23), which, they state, is fully
consistent with the outcome the Commission required in its April 19 Order.

     GOECS and Settling Staff note that the Commission has previously held that
"in determining whether the result is in the public interest, there is no
formulaic principle," citing Order No. 23,443 at 182.  GOECS and Staff urge
that, in the rebalancing that the Commission undertakes as it considers the
Conformed Settlement Agreement, the Commission take into account the fact
that the Settlement Agreement achieves all the objectives of the Commission
and the Legislature.

     PSNH objected to the various motions for rehearing of the stranded cost
recovery charge and delivery service charges, stating that none of the
motions present good reason for rehearing Order No. 23,443, and that granting
any of the motions would unnecessarily create further delays in this
proceeding, and harm the state's economy, and cause a continued burden on the
state's citizens, commerce and industry.

     These various objections to the sufficiency of the Commission's analysis
and findings in support of the April 19 Order are not persuasive, for the
following reasons.  First, we are not required by statute to conduct a
traditional rate case to determine this case.  We are specifically authorized
to resolve this docket through adjudicated settlement, rather than through
full litigation of each specific claim.  The Court has also determined that
we are not bound to use any given ratemaking methodology to set rates, as
long as the resulting rates are just and reasonable.  With respect to the
restructuring legislation which governed our determination in this case, RSA
374-F does not contain a mathematical formula for balancing its twelve
interdependent principles in the fashion proposed by the moving parties, and
permits us to award stranded costs that are "substantially consistent" with
the statutory guidelines.  Finally, to the extent prior law could be
interpreted as requiring such an approach, SB 472 has superceded that law,
and explicitly mandates the result we reach today.

     The overarching standards of the restructuring legislation, and the
statutory standards for sufficiency of Commission ratemaking decisions, do
not require that the Commission determine the outcome using any specific
methodology, so long as the stranded cost recovery result is "equitable,
appropriate and balanced," the settlement is "in the public interest," and
the rates are "just and reasonable."  Support for the authority that the
Commission need not resolve these outstanding matters using traditional
cost-of-service analysis is found in the New Hampshire Supreme Court's
decision in Appeal of Richards 134 N.H. 148 (1991).  In that case, the Court
determined that a traditional ratemaking approach was not required, by
statute or the federal Constitution, to analyze the rate plan before the
Commission.  Most significantly, the Court noted the well-established
principle set out in Federal Power Commission v. Hope Natural Gas Co., 320
U.S. 591 (1944) that "the methodology used to set rates is irrelevant. . . .
Instead, it is the result reached that is important: '[i]f the total effect
of the rate order cannot be said to be unjust or unreasonable, judicial
inquiry is at an end.'" 134 N.H. at 164, quoting Hope, 320 U.S. at 602.

     The adjudicated settlement proceeding here, and the benchmarking analysis
conducted by the Commission at the Legislature's direction, constitute such a
constitutionally permissible means.

     The April 19 Order was issued in the context of a settlement, albeit one
objected to by a number of parties, and the Legislature has specifically
authorized and directed the Commission to consider a negotiated settlement of
the pending litigation and restructuring issues.  See, e.g., RSA 374-F:4, V
(stranded cost charges may be established through an adjudicated settlement
proceeding), RSA 369-A:1, IV (structured financing may be considered in the
context of settlement agreements), and 1999 N.H. 289:3, I (Commission may
hold hearings to review any settlement proposal that includes
securitization).  All of these statutes were enacted subsequent to the more
general provisions of RSA 374-F, the "used and useful" statute (RSA 378:28),
and the special contract statute (RSA 378:18-a) that some parties have
alleged were violated by the Commission's order, and as subsequent acts of
the Legislature that deal with a subject in a more specific way, the later
legislative acts must control.  Board of Selectmen v. Planning Board, 118
N.H. 150, 152;  Petition of Public Service Co. of New Hampshire, 130 N.H.
265, 283 (1988).  The New Hampshire Administrative Procedure Act, which
governs the procedures the Commission must adhere to in carrying out its
responsibilities, provides that "informal settlement of matters by
nonadjudicative processes is encouraged."  RSA 541-A:38.  The authority of
the Commission to discharge its responsibilities through the consideration
and review of negotiated settlements extends to its duties to implement
retail choice in the electric utility industry.

     With respect to the Rate Agreement in particular, the New Hampshire
Supreme Court's decision with respect to certain transferred questions of law
in In re New Hampshire Public Utilities Commission Statewide Electric Utility
Restructuring Plan, 722 A.2d 483, 143 N.H. 233 (No. 98-114, issued December
23, 1998) found that "the PUC must consider State obligations under RSA
chapter 362-C and the rate agreement, if any, when determining whether, and
to what extent, PSNH receives an award of stranded costs."  722 A.2d at 488,
143 N.H. at 238.  The Supreme Court also found that while it must consider
the State's obligations in its analysis, the PUC can award only those
stranded costs that comport with the standards mandated by the Legislature in
RSA 374-F:4, V and VI.  Id.

     We do not believe that the requirement to "consider" the State's
obligations requires us to rule definitively as to the legal nature of those
obligations prior to awarding recovery of stranded costs.  Rather, the
overriding consideration is that we achieve a result that is in the public
interest by only allowing a charge for the recovery of costs that is
"equitable, appropriate and balanced," and that the end result, the ultimate
rate charged, is just and reasonable.  The various claims as to the nature of
the State's obligations are certainly part of the calculus we must apply in
balancing the interests of the customer and the utility as required by RSA
363:17-a, and, as we discussed in our April 19 Order, we have done so.

     Subsequent to the Supreme Court's decision in In re NHPUC, RSA 374-F:4, V
was amended by the insertion of "or adjudicated settlement" following "rate
case" in the first sentence.  See Laws of 1999, Chapter 289:6, effective July
16, 1999.  This change provided the Commission the express authority to
establish a stranded cost charge in the context of its review of a
settlement.  To the extent that any question remained after the Supreme
Court's decision in In re NHPUC, the Legislature has removed it by virtue of
its passage of SB 472, which contains explicit findings approving the overall
structure of the Settlement Agreement and many specific details in the
Settlement Agreement, including those complained of in the motions for
rehearing.  We find that this statute and the earlier amendment to RSA 374-F
contained in the Laws of 1999, Chapter 289:6, allow the Commission as part of
its review of a settlement to resolve the questions concerning the nature of
the State's obligations to PSNH under the Rate Agreement.

     It would be contradictory and illogical to find that a settlement of
claims as to the contractual nature of the Rate Agreement, which is necessary
and fundamental to the settlement of the question of the appropriate stranded
cost recovery charge (which we have the authority to approve), must be
rejected, and can only be resolved by an explicit Commission ruling on the
nature of those claims.  If the Legislature had intended our authority to be
so circumscribed, it could have made this an express requirement, and
provided that a settlement of claims for stranded cost recovery may only be
accepted by the Commission after it has completed its ruling on the claims
with regard to the Rate Agreement.  In fact, the Legislature did the
opposite:  its requirement that the Commission pursue appropriate litigation
as to whether the 1989 Rate Agreement is a contract and as to whether PSNH
and NU may have breached any such contract applies only if PSNH does not
accept the conditions contained in RSA 369-B:3, IV(b).  See, 2000 N.H. Laws,
Chapter 249:6, III.

     It is also necessary to point out, contrary to the arguments of some
parties, that the conclusion as to what stranded assets are to be recovered
from ratepayers or will remain the responsibility of the Company and its
investors does not flow automatically from a determination as to whether the
Rate Agreement is or is not a contract.  RSA 374-F:3, XII(c)(4) provides that
a utility's obligation to mitigate its stranded costs requires "[a]
reasonable amount of retirement, sale or write-off of uneconomic or surplus
assets, including regulatory assets not directly related to the provision of
service." (Emphasis supplied.)  There is no legislative mandate that all
regulatory assets or surplus capacity (i.e., capacity not "used and useful")
be excluded from stranded cost recovery.<FN 1>  Thus, even assuming the Rate
Agreement is not a contract, the argument that the Acquisition Premium is not
"used and useful" and, therefore, should be completely eliminated from rates
suffers from an incomplete analysis.  The reasonableness of such a result
would have to be reviewed.  In addition, the Legislature's recent
securitization statute explicitly includes acquisition premiums among the
utility costs that can be the subject of securitized stranded cost recovery.
RSA 369-B:2, XIV(a).  We therefore find that we are not required by either
RSA 374-F:3, RSA 374-F:4 or the Supreme Court's determination in In re NHPUC
to first decide whether the Rate Agreement is or is not a contract before we
authorize PSNH to collect a stranded cost recovery charge.

     The objecting parties have also argued that the standards set forth in RSA
374-F:3 and RSA 374-F:4 impose a strict definition of and limitation upon
stranded cost recovery.  The Commission does not interpret the provisions of
RSA 374-F:3, XII and RSA 374-F:4, V as being as prescriptive as the objecting
parties assert.  The requirement that the SCRC be "substantially consistent",
RSA 374-F:4, III, with the interdependent principles of the Restructuring Act
gives the Commission discretion to act within certain limits, as long as the
end result is consistent with the public interest.  See RSA 374-F:4, VIII
(a).

     Finally, to determine whether the rates resulting from the Settlement
Agreement were just and reasonable, and in the public interest, the
Commission employed the benchmarking analysis required by the restructuring
statute.  1999 N.H. Laws 289:4.  As we noted in the April 19 Order, the
Legislature did not specify the time period over which the analysis was to be
conducted, other than limiting the length of Transition Service and demanding
"near term" rate relief.  In the absence of a legislatively-determined
horizon for benchmarking purposes, we found it appropriate in our detailed
revenue requirements modeling to "look out over a period that is long enough
to capture events that are certain, but short enough to avoid the difficulty
associated with predicting the long-term future." Order No. 23,443 at 178.
We chose a period ending in 2007, around the Recovery End Date.  Id.

     In forecasting revenue requirements for more than seven years, and doing
so under a number of scenarios, a sound analysis can only achieve a certain
level of precision.  As we noted, by definition the benchmarking exercise
involves uncertainty.  Id., at 169.

     None of the objections posed by the various moving parties, claiming the
Commission failed to track traditional ratemaking methods precisely, takes
into account the limits to analytical precision imposed by the fact that the
benchmarking analysis, unlike that of traditional ratemaking, looks several
years out into the future.  Traditional ratemaking tools, based on the
analysis of a historic test year, are tied closely to the historic books of
account, and forecasts are employed only so long into the future as necessary
to get a feel for the likely cost of capital requirements over the (short)
period rates may be in effect.  By contrast, the benchmarking analysis must
make a number of assumptions about the likely path of future events, and
project their impact on the likely costs of doing business over the period of
analysis.  The test year accounting results of the Company are some evidence,
but by no means the only evidence, of these likely future costs.  They are
merely a starting point, and cannot control the outcome in a deterministic
fashion.

     Also, since benchmarking deals with the future, it necessarily considers
future plant additions, and some assumption as to whether they will in fact
be reflected in rates under "business as usual," that is, assuming no CWIP
and a reflection of their costs in rates when and if the plant additions are
made.  The Legislature intended us to approve a settlement if the two paths
(Settlement Agreement and benchmark), over time, were sufficiently close that
the Settlement Agreement was reasonable.  This we have done.  Such a
forward-looking analysis is different from approving CWIP.

     The Legislature does not require that we determine that the Settlement
Agreement meets every component of every restructuring principle guiding us
in approving a restructuring package.  The movants, to the degree they attack
individual components of the Settlement Agreement (as conformed pursuant to
the directives of the April 19 Order and today's order) misapprehend what has
been accomplished by our order.  The restructuring legislation required a
balancing of concerns, as did the consideration and evaluation of this
comprehensive Settlement Agreement, and no one of those concerns can be
isolated and held up as essential to the justness and reasonableness of the
outcome, as the motions for rehearing seek to do. And where one restructuring
principle must be balanced against another, the statutory scheme contains an
implicit requirement for the exercise of Commission discretion in weighing
the application of the principles to the Settlement Agreement's terms.  See,
e.g., RSA 374-F:1, III, RSA 374-F:4, VIII (a).  Our benchmarking analysis
provided a sound basis for determination of the underlying merits of the rate
plan contained in the Settlement Agreement.  We note also the broad scope of
authority of the Commission, through its acceptance or modification of the
Settlement cited elsewhere in this Order, to completely and finally resolve,
with respect to PSNH, Docket DR 96-150, the federal litigation and the other
dockets listed in Section XV of the Agreement.

     The Motions for Rehearing and Reconsideration fail to adequately consider
the effect of SB 472 in specifying the extent to which the April 19 Order is
consistent with the legislative determination of the public interest and
complies with its restructuring directives in RSA Chapter 374-F and RSA
Chapter 369-A.  Chapter 249 of the Laws of 2000 creates a comprehensive and
extremely detailed scheme for authorizing PSNH to refinance its debt through
securitization as part of a larger restructuring plan to create retail
competition for its customers.  The Commission's April 19 Order is an
intricate and essential part of that scheme;  the April 19 Order is referred
to no less than ten times throughout the statute and in many instances the
Commission's findings and conclusions are incorporated within the statute's
express provisions.

     The portion of Chapter 249 codified at RSA 369-B:3, IV that authorizes the
Commission to issue finance orders for PSNH, directs that such finance orders
must be consistent with 16 specific conditions, several of which contain
numerous subparts.  These conditions relate to the details in the Settlement
Agreement and April 19 Order concerning PSNH's rates (including the level and
term of the delivery service charge and total system benefits charge),
customer savings, calculation of the Recovery End Date (RED), transition
service, merger issues, and divestiture, to name a few.  Thus, for the
Commission to implement the provisions of our April 19 Order, which requires
approval of a financing order approving securitization and the issuance of
Rate Reduction Bonds, we are required by RSA 369-B:3, IV to include conditions
that either reaffirm or substantively modify several aspects of our April 19
Order.  In so requiring, the Legislature effectively revised our April 19 Order
and, subject to those revisions, expressly found that Order (and the details
therein) to be consistent with the principles contained in RSA 374-F:3, RSA
369-A:1, X and RSA 369-A:1, XI.

     For example, pursuant to RSA 369-B:3, IV(b)(5), the delivery service
charge is to be fixed, on average, at $0.028 per kWh for a period of 33
months.  In order to issue a finance order for PSNH, the Commission first
must find that this condition is met.  If this, and all the other conditions
of the April 19 Order and RSA Chapter 369-B are met, then the Legislature has
determined that the finance order which is subsequently issued approving and
implementing the securitization proposal in the Settlement Agreement "will
result in benefits to customers that are substantially consistent with the
principles contained in RSA 374-F:3 and RSA-A:1, X and with RSA 369-A:1, XI."
RSA 369-B:1, VII.

     This means, quite literally, that the PSNH delivery service charge fixed,
on average, at $0.028 per kWh for 33 months, as approved in the April 19 Order
and reaffirmed and revised in today's order, is expressly found to be
consistent with all the restructuring policy principles of RSA 374-F, such as
Customer Choice, Regulation and Unbundling of Services and Rates, Open Access
to Transmission and Distribution Facilities, Benefits to All Customers, Full
and Fair Competition, Near Term Rate Relief and Administrative Process.  Any
attack now on the Commission's approval of the delivery service charge,
whether it be allegations that the process was an improper departure from
traditional rate-making standards, an alleged failure to determine whether
the rate base which formed the basis for the delivery rate contained CWIP,
or a supposed failure to conduct any analysis as to what constitutes a
reasonable rate of return on T&D plant and to calculate the delivery rate
using actual cost data, all of which we disagree with, is of no consequence,
as the resulting rate is now mandated by statute and found to be "beneficial
to customers," and "in the public interest."

     The same rationale applies as well to each of the following issues either
addressed in the April 19 Order, or revised by RSA Chapter 369-B: PSNH's
supplying of transition and default service during the initial transition
service period; the rate of transition service during the initial and
subsequent periods; the reconciliation of excess of bid price over fixed
price for transition service, including PSNH's absorption of the first $7
million of that difference; the assignment of residential customers to
registered competitive suppliers; the term of transition service; the amount
of stranded costs that may be securitized; the minimal level of customer
savings; the rate associated with the credit to customers of the ADITs; the
maximum of issuance and debt premium costs PSNH may recover; the calculation
of RED; the five percent temporary rate reduction effective October 1, 2000;
the terms of the jurisdiction and authority of the Commission over a merger,
acquisition or sale involving PSNH or its parent; the prohibition of recovery
of an acquisition premium from a merger, acquisition or sale in a way that
increases rates; the level of the system benefits charge; prohibition against
an exit fee; open access to PSNH's transmission system; the cap on the SCRC;
the total rates of customers taking service under special contracts; the
Commission's administration of the liquidation of PSNH's generation assets
and bid process for transition service; and the timing of PSNH's agreement to
dismiss the federal litigation involving the Commission.

     Accordingly, to the extent that parties' motions for rehearing implicitly
or explicitly contest any of these provisions by relying on statutory
provisions that have been superceded by Chapter 249's specific conditions and
instructions to the Commission, and ignore that Chapter's affirmation and
revision of the April 19 Order, those motions must be denied.  See, e.g.,
Colby v. Broderick, 96 N.H. 316, 317 (1950) (["w]hen the legislature makes
a revision of the subject matter of a statute and by the new statute designs
a complete scheme, so much of the former statutes as are not mentioned,
although not expressly repealed, are deemed to be superceded.")

     Thus, we reaffirm our determination, made at the outset of this case and
again in the April 19 Order, that we were not required by RSA 374-F to
proceed with the ISC rehearing or base rate proceeding at the same time we
considered this Settlement Agreement.  See Order No. 23,299 issued September
16, 1999 at 37.  We also find that we have the authority to resolve all of
the pending matters at issue in this docket in the context of an adjudicated
settlement.  We reject the assertion that we must determine that the Rate
Agreement is or is not a contract, in order to determine the proper stranded
cost recovery for the Company.  We clarify that we have not determined
whether the Rate Agreement constitutes a contract.  We affirm the
benchmarking analysis performed in the April 19 Order, and reject the
assertion that we were required to conduct the particular analyses at the
level of detail and as constrained by historic cost data, as demanded by the
objecting parties as a precondition to our determination of the just and
reasonable level of rates.  In light of the legislative directives contained
in the Laws of 2000, Chapter 249, we affirm that the conformed Settlement
Agreement complies with the statutory conditions and the Stranded Cost
Recovery therein is therefore "equitable, appropriate and balanced," and that
the conformed Settlement Agreement is "in the public interest."

     In addition to the statutory arguments Great Bay makes, it also argues
that the Commission's fixing of the Stranded Cost Recovery rate of return for
the entire period of the SCRC, failure to apply the actual capital structure
to PSNH, and failure to provide an analysis that demonstrates that the
delivery rate yields not more than a reasonable rate of return, all run afoul
of the constitutional test for what constitutes just and reasonable rates.
Great Bay Motion for Reconsideration at 4, 6.

     Aside from whether this Commission may or must consider the
constitutionality of statutes governing our jurisdiction, Public Service Co.
of N.H.,  71 NHPUC 581, 582 (1986), Great Bay's Motion and objection fail,
because Great Bay does not accurately state the constitutional test.  As we
discussed above, the New Hampshire and United States constitutions do not
require a particular ratemaking methodology.  They require that the resulting
rates be just and reasonable.  Our benchmarking analysis, the results of
which were confirmed by the Legislature in Chapter 249 of the Laws of 2000,
establishes that the rates resulting from the Settlement Agreement, as
amended to conform with this Commission's Orders and the legislation, are
just and reasonable and do not constitute exploitative rates.  Petition of
Public Service Company of New Hampshire, 130 N.H. 265, 274 (1988).

     CRR, Granite State Taxpayers, THINK-NH and NHPIRG seek rehearing on the
grounds that stranded cost recovery is an unconstitutional taking of
consumers' private property without just compensation, and that any SCRC for
an acquisition premium is an unconstitutional fictitious capitalization.  CRR
et al  Motion for Rehearing at 2, 16.

     With respect to the takings argument, CRR et al essentially argue that
stranded cost recovery is a payment to the utility in return for which there
is no commensurate obligation of the utility to serve the public.  They argue
that the assessment of stranded costs serves no utility purpose, that there
is no rational nexus between costs and benefits.  CRR et al further argue
that if funds are to be taken from the public to settle the federal lawsuit,
encourage PSNH to withdraw its objections to restructuring, and compensate
PSNH for historic costs stranded by state law, they must come from tax
revenues, not rates, else the Settlement Agreement will violate the state
constitution's requirement of equal taxation.  According to CRR et al, the
Legislature is powerless to overcome these constitutional requirements by
statute.

     In a related but distinct argument, CRR et al point to the New Hampshire
constitutional prohibition on fictitious capitalization of corporations, N.H.
Const.  Pt. II, Art 83.  They claim that securities backed by stranded cost
recovery rights, rather than real assets, are the "watered securities" to
which the constitution refers.  Thus, they conclude, Article 83 prohibits the
issuance of rate reduction bonds to pay for stranded cost recovery.

     PSNH filed a short pleading objecting to this and all other motions for
rehearing.  GOECS and Settlement Staff object to these arguments of CRR et al
with respect to the constitutionality of stranded cost recovery.  In their
Objection, GOECS and Settling Staff analyze and distinguish the cases cited
by CRR et al for the proposition that the Commission and the Legislature lack
authority to award stranded cost recovery or securitize cost recovery.

     Putting aside the Commission's historic view that it lacks the authority
to determine the constitutionality of state statutes, Public Service Co. of
N.H., 71 NHPUC 581, 582 (1986), we deny the Motion of CRR et al for
reconsideration of the SCRC on the cited grounds.  The award of stranded cost
recovery is an exercise of ratemaking, under legislative guidelines, not a
taking;  it fulfills the public purpose of restructuring the electric
industry and the provision of service to PSNH customers, and the investments
recovered via stranded cost recovery and securitization represent historic
costs of service, or lawfully-awarded acquisition premium costs.

     As GOECS and Settling Staff state in their Objection to Motions for
Rehearing, by definition "stranded costs" were incurred in the public service
or they would not be deemed recoverable under the existing regulatory
structure.  See RSA 378:27 and 28.  The cases cited by CRR et al are not
applicable to PSNH's proposed restructuring plan, because they deal with
expenditures that enabled a utility to serve only private individuals or
industry.  The Settlement Agreement provides for recovery of costs that,
arguably, could have been recovered by PSNH in the ordinary course of
ratemaking.  The balancing of the equities, as performed initially by the
Commission in our April 19 Order and as rebalanced by the Legislature in
Chapter 249 of the 2000 Laws of New Hampshire, effectively removed from the
overall allowance for stranded cost recovery those costs that the Legislature
considered inappropriate for utility cost recovery. Whether or not CRR et al
agree with the legislative policy, 374-F and associated statutes make clear
that an "equitable, appropriate and balanced" amount of stranded costs are
legitimate utility costs recoverable in rates.

     For the reasons stated in the Settling Staff and GOECS Objection, the
remaining arguments by CRR et al as to the constitutionality of the Order
under a takings theory or a "fictitious capitalization" theory are without
merit.

     CRR et al moved on June 30, 2000 to be permitted to amend their May 19,
2000 Motion for Rehearing, to add the issues raised in Cabletron's May 19,
2000 Motion for Rehearing.  Cabletron withdrew its Motion for Rehearing on
June 22, 2000.  CRR claims now that it was aware of the issues Cabletron was
going to file in its May 19 Motion, and did not raise the same issues, but
instead relied on Cabletron's pleading.  Now that Cabletron has withdrawn its
Motion, CRR submits that it is in the position of not having issues it would
have otherwise raised now not properly before the Commission for
consideration.  Consistent with their prior expectation that the Cabletron
issues would be considered by the Commission, CRR wishes to have the
Commission address the Cabletron issues.  They further state that the
Commission had presumably been "working on Cabletron's motion for rehearing
for over a month before Cabletron withdraw [sic] them," and therefore
reinstatement of the issues by CRR would not prejudice the Commission, or any
other party.

     PSNH objects to the Motion of CRR et al to amend its Motion for Rehearing,
stating that "CRR's failure to timely raise the issues contained in Cabletron's
Motion for Rehearing...cannot be cured by the filing of an
Amended Motion for Rehearing seventy five days after the issuance of Order
No. 23,443."  Objection at 2.  PSNH further argues that the Supreme Court has
repeatedly held that there is no jurisdiction to consider issues for which
rehearing is not properly sought according to the statutory prerequisites.

     We agree with the Company that CRR's Motion was not timely filed.  CRR et
al could have filed even a brief statement on May 19, 2000, asserting that
they joined in Cabletron' s Motion.  This they did not do.  Compare the
action of one of the movants, Granite State Taxpayers, in joining the Motion
for Rehearing filed by the OCA and EnerDev.  The Motion of CRR et al to amend
their Motion for Rehearing to assert the arguments put forth by Cabletron on
May 19, 2000 and withdrawn by Cabletron on June 22, 2000, is denied.

     The Towns ask that we clarify the provisions of Order No. 23,443 with
regard to employee protections at hydro facilities that they may wish to
purchase.  They first ask that we clarify the provision on p. 231 to the
effect that municipalities should be subject to the same provisions on
employee protections as other bidders.  They argue that PSNH does not assign
its employees to any specific hydro facility.  They argue that if a town
purchases less than the full complement of facilities and is required to
provide the same employment protections and benefits as PSNH is proposing to
establish for its other employees, it will be necessary to assign specific
employees to specific facilities.  They ask that PSNH be ordered to assign
its hydro plant employees by facility, stating which employees by name are
assigned to each station, and further that the Commission state whether Order
No. 23,443 would be satisfied by the employment of any such PSNH employees,
assigned to a particular hydro facility by any entity with whom a
municipality may contract for maintenance and operations, provided such
entity grants the same employment protections and benefits PSNH proposes to
establish in the fossil/hydro auction.

     Whether the Town's first request is treated as a motion for clarification,
or more accurately as a motion for rehearing, it is denied.  There was
substantial evidence at the hearings in this docket to the effect that PSNH's
practice of not assigning specific plant employees to specific hydro
facilities, but rather creating a hydro team with responsibility for all the
hydro facilities, is the most efficient method of assigning personnel to these
facilities.  The Towns did not offer evidence that rebuts this fact,
and do not attempt to do so at this point.  The Commission has no basis to
require the break-up of the team and the reassignment of its members to
individual plants.

     As to the Town's request that we clarify the means by which the Towns,
as prospective purchasers of the hydro plants, may meet their obligations
with respect to employee protections, we grant the motion for clarification.
The employee protection obligations spelled out in Order No. 23,443 can be met
by a Town contracting with an entity for operations and maintenance of a
facility it may purchase, if such entity grants the same employee protections
and benefits as are contained in PSNH's commitment, approved in Order No.
23,443.


     Great Bay requests that we rehear the April 19 Order to require PSNH to
unbundle its transmission and distribution.  Motion for Rehearing at 5.
Great Bay also argues that PSNH's Amended Settlement Agreement cannot be
accepted because PSNH has failed to comply with the statutory requirement of
RSA 374-F, made more urgent and strengthened by RSA 369-B:3, IV (b) (8), to
unbundle its system, so as to provide open access to its transmission system.
Post-Order Brief at 6.

     PSNH filed an objection to the Motion on May 26, 2000, arguing that Great
Bay does not state a good reason to rehear the April 19 Order, that granting
any of the motions would cause delay, harm the state's economy, and cause a
continued burden on the state.  GOECS and Settlement Staff argue that Great
Bay's concern regarding the unbundling of transmission rates was amply
addressed in the testimony of the Settling Staff, and the Commission's Order
is otherwise supported in the record.

     Great Bay has not persuaded us that we must reconsider the April 19 Order,
or reject the Amended Settlement Agreement, on account of their provision for
unbundling T&D rates in the next rate case, or earlier at the Commission's
determination.  As we noted in the April 19 Order, PSNH does not have the
data readily available to unbundle the T&D portion of its rates.  April 19
Order at 255.  The statutory requirement for open access to PSNH's
transmission system, RSA 369-B:3, IV(b)(8), can be met before unbundling is
completed.  The statutory requirement that unbundling be accomplished as soon
as is "practical", RSA 374-F:4, I, will be met, before the next rate case, by
continued Commission oversight of unbundling possibilities, and at the
latest, in the next rate case.  We continue to view accomplishing the overall
purpose of the statute, getting to Competition Date, as more pressing than
perfecting this one aspect of the overall package of restructuring reforms at
this time.  Accordingly, Great Bay's Motion for reconsideration with respect
to T&D unbundling is denied without prejudice.

     Throughout the hearings on the revised Settlement Agreement and the
subsequent filings, PSNH has argued that it should have discretion to
determine the level of securitization necessary and appropriate to maximize
the benefits to shareholders and customers, within the $670 million
securitization cap contained in RSA 369-B:3, IV (b).  In support of its
argument, PSNH cites the fact that the date of the offering is still unknown
and since the stranded costs are being amortized, the Company cannot
establish the amount of the RRBs to be issued until it  knows when this will
occur.  PSNH also cites its desire to restructure its capital structure by
returning to more normal levels of debt and equity; however, until the cash
on hand is known, PSNH cannot determine what range of securitization is
optimal.  It also indicated that the level of securitization will affect the
Company's financial ratios and its ability to achieve an investment grade
rating.  In its brief (at p. 8), the Company concludes that the Commission
should do what it has done historically and grant the Company the discretion
to determine the most reasonable and prudent amount of securitization,
subject to a review under the prudence standard set forth in the Settlement
Agreement.  (The Settlement Agreement at p. 8 defines "prudence" as follows:
The standard of care which qualified utility management would be
expected to exercise under the circumstances that existed at the time
the decision in question had to be made.  In determining whether a
decision was prudently made, only those facts known or knowable at the
time of the decision can be considered.)

     CRR, in its post-hearing submission, supported the position of PSNH,
though for different reasons, and said that securitization should be
minimized.  Great Bay argued that PSNH was proposing to ask the Commission to
divest itself of all jurisdiction over the issuance of RRBs once the finance
order is issued, including the ability to make an after the fact prudence
review.  As noted above, this does not appear to be PSNH's position.

     Representative Bradley indicated that PSNH's request to securitize $573
million is a reasonable request since fewer dollars would be guaranteed by
customers.  He said that the Commission is authorized to determine an amount
lower than $670 million based upon what the Commission finds to be in public
interest.

     GOECS and the Settling Staff argued that PSNH's proposed level of
securitization may not maximize customer benefits.  Although they agreed that
the effect of delay has been to lower the appropriate level of securitization
and that an appropriate goal of restructuring should be to keep PSNH
financially healthy, they argued that PSNH had not persuaded them that the
$573 million ceiling on securitization was appropriate.  They argued that the
proposed cap does not sufficiently take customers' interests into account.
They, therefore, asserted that the Finance Order should authorize the
issuance of the full $670 million authorized by the Legislature, giving the
Company discretion to issue whatever it believed to be an appropriate level,
but that the Company's decision should be subject to a prudence review at a
later time.

     The OCA, in its post-hearing brief, said that while it agreed with GOECS
that the basic obligation of PSNH should be to minimize customer costs
consistent with maintaining an investment grade rating, the Commission may
not want to direct PSNH to finance more of its stranded costs than it is
willing to.  The OCA argued that the burden of proof should remain on the
issuer to prove that the amount is proper and said this should be
demonstrated in PSNH's next rate case.

     Although considerable time was spent on this issue during the hearings,
as we read and understand the positions of the parties reflected in the
post-hearing briefs, we do not believe that the parties are in significant
disagreement on this issue.  Most parties seem to agree that PSNH ought to
have discretion on the amount that should be securitized, subject to a later
prudence review by the Commission.  The only difference between PSNH and
GOECS and the Settling Staff seems to be on the securitization cap.  GOECS
and the Settling Staff would have us authorize the full $670 million, while
PSNH seemed to argue throughout the proceeding that the amount should be
capped at $573 million.  In its post-hearing brief, however,  PSNH did not
argue specifically for a cap of $573 million.  In fact, PSNH's argument for
discretion in determining the appropriate amount does not seem at odds with
the argument in GOECS and Settling Staff's brief that the Commission should
authorize PSNH to issue up to $670 million in RRBs and order the Company, in
determining the actual amount, to use its discretion, subject to a later
prudence review by this Commission.

     After considering all of the arguments on this issue, we have decided that
it would be best to give PSNH considerable latitude within the bounds of the
law, subject to a later prudence review to determine whether the amount PSNH
chose was reasonable at the time that it was required to make its decision.
This means, as specifically provided for in RSA 369-B:3, IV (b), that it will
be authorized to issue an aggregate principal amount of not more than
$670,000,000, minus $6,000,000 for each month from October 1, 2000 to
Competition Day (C-Day).  In doing so, we expect the Company to manage its
affairs in the most reasonable and prudent manner, in the traditional sense
of those words, and subject to a traditional prudence standard.  We believe
that the definition of "prudence" contained in the Settlement Agreement is
consistent with the prudence standard that this Commission and the courts
have traditionally applied.  Five hundred and seventy-three million dollars,
or something less by the time C-Day arrives, may very well be the optimum
amount when all of the factors that must be weighed in arriving at the
appropriate amount are considered.  We cannot know that optimum amount now;
that is a determination to be made when the time arrives.  We note that, as
argued by CRR and Representative Bradley, there is a trade-off between
lowering rates through securitization and shifting cost recovery risk from
the company on to the customer.  Giving the Company discretion, within the
bounds authorized by the Legislature and the requirements of prudence, seems
to us to allow the appropriate level of flexibility, considering the
possibility of changing circumstances between the time of our hearings on
these issues, when the record was established, and the time when the bonds
are issued.

     One related issue concerns renegotiation of existing power purchase
arrangements with the small power producers (SPPs) made in accordance with
state or federal mandates and the issuance of RRBs to finance renegotiated
agreements.  In the purpose and findings section of the recently enacted
legislation, Chapter 249 of the Laws of 2000, the Legislature said that
renegotiation of the power purchase obligations with the six wood-to-energy
facilities and the one trash-to-energy facility "is in the public interest in
order to reduce the cost to ratepayers..." and that "the sharing of the
benefits among ratepayers and all of the parties involved in the
renegotiations is in the public interest." RSA 369-B:1, XI. The Legislature
also authorized the issuance of RRBs up to $130,000,000 to finance
renegotiated agreements. RSA 369-B:3, IV(a).  One other provision of the new
legislation states that an electric utility that renegotiates a commission
order providing for qualifying facility power sales or power purchase
agreement under RSA 363-A:4-c (which as written appears to apply only to five
of the wood-fired facilities, not all six wood-to-energy facilities and not
the one trash-to-energy facility that are specifically mentioned in RSA
369-B:3, IV(a)) shall be entitled to retain up to 20 percent of the savings
resulting from the renegotiation subject to order of the Commission.  RSA
362-A:4-d.

     In Order No. 23,443, the Commission noted that the Settlement Agreement
allowed for the recovery of the power purchases made in accordance with state
or federal mandates and we approved that provision of the Settlement
Agreement.  In Order No. 23,443, the Commission also said, however, that PSNH
and the SPPs should try to reach new agreements as soon as possible, that we
would allow PSNH to use an appropriate level of securitization to effectuate
either the buydowns or buyouts, and that the potential savings of
renegotiated agreements would decrease with the passage of time.  The
Commission allowed PSNH to retain 20 percent of the savings due to agreements
reached between PSNH and the SPPs before the end of one year from the date of
that order (April 19, 2000) that were approved by the Commission, and said
that thereafter PSNH's share would fall to 10 percent for one additional
year.

     We have not been asked to reconsider or clarify this portion of the Order,
but we do want to note that the addition of RSA 362-A:4-d noted above and the
time limits for the issuance of rate reduction bonds contained in RSA
369-B:5, I (December 31, 2002) may have an impact on how the incentive
mechanism which we enunciated in our April 19 Order will ultimately work.  In
addition, the legislation has increased the amount available for
securitization related to the renegotiations from what would have been
available under our April 19 Order.  For now, however, we want to take this
opportunity to once again strongly encourage PSNH to attempt to renegotiate
these purchase power arrangements as soon as possible for the benefit of
ratepayers and, with the incentive noted above, shareholders.

     In its initial filing, PSNH argued that its Hydro-Quebec (HQ) transmission
support payments were a stranded cost.  However, in Order No. 23,443, the
Commission found that the power purchase agreements associated with PSNH's
entitlements on the Hydro-Quebec inter-tie were ending, and therefore,
concluded that the transmission support payments should be categorized as
transmission-related rather than generation-related.  The Commission denied,
without prejudice, PSNH's request to recover the HQ support payments as
stranded costs.

     In Order No. 23,443, we required PSNH to provide a schedule of the actual
costs of its transmission support payments over the last three years and
file a proposal to recover its Hydro-Quebec transmission support costs,
including a means to account for any revenue offsets.

     On May 1, 2000, the Company filed a proposal that used HQ-related
revenues as an offset to Part 3 stranded costs.  During the July 7, 2000
hearing, the Company's witness, Mr.  Hall, further clarified the Company's
proposal.  Under the proposal, the Company will credit any revenue received
from the Hydro-Quebec line during the 33 month Initial Delivery Charge Period
against Part 3 stranded costs.  The treatment of any HQ-related revenue
received following the 33 month IDCP would be determined by the Commission
as part of the post-IDCP rate case.

     We have reviewed the Company's proposal and find it an appropriate
methodology for the duration of the IDCP.  Consistent with our decision in
Order No. 23,443, we will make a future determination as to the proper
treatment of the HQ-related revenue at the time of the rate case following
the IDCP.

     PSNH proposed to add $0.0013 per kWh to the average delivery service
charge to recover the transmission support payments.  In addition, the
Company proposed to credit Part 3 stranded costs for any revenues it might
receive from usage of the line.

     After reviewing the calculation of the $0.0013 per kWh average charge for
recovery of the transmission support payments, we will approve it for the
IDCP subject to reflection of over- or under-recoveries in Part 3 stranded
costs.  During the rate case to follow the IDCP, as indicated in our April 19
Order, we will entertain a proposal from PSNH for treatment of the HQ
facility and expenses and revenues going forward from that time.

     In the Conformed Settlement Agreement, PSNH proposed to allocate these
HQ-related costs based on the delivery service charge and to recover them on
a per kWh basis.  In addition, the Company proposed to roll the HQ-related
costs into the delivery charge, rather than bill them as a stand-alone
surcharge.

     The OCA opposed PSNH's cost allocation proposal, arguing that it would
unfairly burden residential customers.  In its brief, the OCA commented that,
although the Commission previously denied stranded cost recovery of a buyout,
the Commission did not indicate that it was unreasonable for rate design
purposes to consider on-going HQ costs as an above-market or stranded type
cost.  Making an analogy to the Commission's treatment of on-going QF
commitments, the OCA  proposed that on-going HQ costs and revenues should be
recovered in a way similar to the way other stranded costs are allocated and
recovered by class, not the way distribution costs are allocated and
recovered per class.  OCA Brief at 2.

     We have examined the proposals of PSNH and OCA, and note that RSA 369-B:3,
IV (b) (9), requires that any changes in the delivery service charge,
stranded cost recovery charge, transition service charge, systems benefit
charge, or any other charge between the estimated amounts in our April 19
Order and 24 months after C-Day shall be applied as an equal cents per kWh
for all rate classes to which they apply.  We find that this provision
controls our decision.  We therefore reject the cost allocation proposals of
both PSNH and OCA and find, instead, that these HQ-related costs must be
allocated on an equal $0.0013 per kWh basis to all customers.  We direct the
Company to reflect our findings and modify its proposed tariff accordingly.
We find merit in minimizing the complexity of customer bills, and therefore,
will allow PSNH to combine the HQ-related cost component with the delivery
charge.

     In its May 1, 2000 Response to Order No. 23,443, PSNH said that it
accepted the nuclear decommissioning condition which the Commission imposed
on the Settlement Agreement, subject to one clarification: PSNH wanted the
Commission to say that if it approves the sale of NAEC's share of Seabrook in
a manner that requires PSNH to prepay the present value of NAEC's share of
decommissioning funds based on the nuclear decommissioning charge then in
effect, then the part of the condition requiring an appropriate mechanism to
adjust decommissioning costs downward prior to the facility shutdown would
not be required.  As further clarified in Mr. Long's testimony at the May 17,
2000 hearing and through Mr. Bersak's response to questions from the
Commission's General Counsel at the July 7, 2000 hearing,  PSNH is asking
that the Commission remain flexible and open to the possibility of a
prefunding of the NAEC share of decommissioning expenses as part of the
divestiture of Seabrook. See Rehearing Tr. May 17 at p. 32 et seq, and 71,
and Finance Order Tr. July 7 at p. 184 et seq.

     Great Bay, in its Motion for Rehearing of May 19, 2000, argued that the
Commission's treatment of decommissioning gives a competitive advantage to
the purchaser of NAEC's Seabrook interest relative to Great Bay by almost
completely relieving that purchaser of any obligation to pay its pro rata
share of decommissioning costs, while still requiring Great Bay to pay the
decommissioning cost.  According to Great Bay, this would violate the New
Hampshire Constitution's entitlements to equal protection of the law and free
and fair competition. Great Bay also argued that a resolution of the
decommissioning issues with regard to Great Bay would result in a
significantly higher sale price for NAEC's Seabrook interest and thus the
Commission's order was not consistent with the statutory requirement that
PSNH take all steps to mitigate stranded costs.  Great Bay further stated
that it did not agree with the Commission's determination that it lacked the
authority under RSA 162-F to adopt the proposal put forth by Great Bay and
said the Commission should reconsider that determination.

     In Comments of GOECS and Settling Staff in Response to the PSNH Filings
dated May 15, 2000,  the State Team argued that the Commission's requirement
that any excess decommissioning funding be returned to ratepayers may cause a
depression in the value customers could receive as a result of the
divestiture, by removing the incentive a buyer of Seabrook may have to save
on costs.  They also pointed out that the one-way rachet contained in the
Commission's order whereby customers can pay less, but not more, for
decommissioning than those estimates currently approved by the NDFC could
cost a buyer an unknown amount in decommissioning expenses, thus creating a
substantial risk for the potential buyer that would result in a lower offer
price for Seabrook.  The State Team recommended allowing for the Settlement
Agreement's treatment of Seabrook decommissioning to apply "to the extent
that it is consistent with New Hampshire law as of the time of divestiture."

     Having considered the issues raised in the motions cited above, we have
decided to clarify Order No. 23,443 as requested by the State Team.  We agree
with PSNH that there should be flexibility in how the divestiture of Seabrook
is structured so that the maximum value can be obtained for the NAEC share of
Seabrook, thereby reducing stranded costs as much as possible.  This
flexibility, however, must necessarily be limited by the laws relating to
nuclear decommissioning funds then in effect.  We have suggested in the past,
and continue to suggest, that it would be appropriate for the Legislature to
review and update the laws relating to nuclear decommissioning to meet the
changes resulting from the deregulation of the industry and divestiture of
generating facilities.  We note that, at its most recent meeting, the Nuclear
Decommissioning Finance Committee stated that it intended to participate in a
discussion with the Legislature about changes to these statutes.  We support
this effort.  In the meantime, it is important to be open to a number of
possible resolutions of this issue, though we recognize that until the law is
changed the flexibility of  PSNH and ultimately our flexibility will be
dictated by the then current law.  Without a specific divestiture proposal
before us, we are reluctant to opine any further on what would or would not
be consistent with the current law and we remain hopeful that the current law
can be amended, as noted above.

     In light of this clarification, we do not see Great Bay's claims of a
violation of equal protection and free and fair trade under the New Hampshire
Constitution as being ripe since we do not know what final form any
prefunding or other proposal that may be part of the divestiture will take,
nor are we certain what the state of the law will be at that point in time.
We stand by our analysis of the Great Bay proposal included in Order No.
23,443; we are not persuaded by any of its arguments that we should
reconsider our analysis of its proposal or our lack of authority to grant the
relief it has requested.

     The legislation creating the Energy Consumption Tax provides that the tax
shall replace the existing Franchise Tax and shall take effect "30 days after
the public utilities commission shall certify to the commissioner of revenue
administration that it has begun implementing such [industry restructuring
plan] order."  1997 N.H. Laws 367:6, I.  We note that our Staff has met with
the Department of Revenue Administration (DRA) and PSNH as to the
implementation of the Consumption Tax, and the possibility that our
notification to DRA of the commencement of industry restructuring and
Competition Day may not coincide.  It is our understanding that this
possibility may lead to an over- or under-collection of taxes by PSNH since
the Company's computerized unbundling of bills at Competition Day will
automatically begin billing the Consumption Tax when it may be too soon to
begin doing so under the procedure established by state law.  In order that
such a transition from the Franchise Tax to the Consumption Tax be handled
properly as to collections from customers, we hereby direct PSNH to file a
proposal for accounting for the potential difference that may result in the
billing change-over, so that it may be deferred for later credit to
customers.

     a.   PSNH's Motion

     In its May 1, 2000 Motion for Rehearing, PSNH requests that the Commission
reconsider one condition contained in Order No. 23,443.  The Motion indicates
that PSNH's position with respect to the rest of the conditions set forth in
Order 23,443 is contained in a separate document filed contemporaneously with
the Motion for Rehearing, but that PSNH's commitment to that position is
contingent in part upon the Commission's decision on the instant Motion
for Rehearing.  More specifically, PSNH's Motion requests that the Commission
reconsider and amend Section VII(F)(3) of Order No. 23,443, which discusses
regulatory liabilities and orders Part 3 stranded costs to be reduced by
$78.6 million.  The order states that a $65.6 million generation-related
regulatory liability accrued under FAS 109 and a $13 million deferred
receivable from North Atlantic Energy Corporation (NAEC) are not stranded
costs and would be credited to customers under traditional ratemaking.
Accordingly,  the Order reduced Part 3 stranded costs by $78.6 million to
reflect a credit of those amounts.  See DE 99-099, Order No. 23, 443, p. 191
(April 19, 2000).

     In support of its Motion, PSNH argues that:  the Commission has
mischaracterized the $65.6 million amount as generation-related because $13.6
million of that amount is related to transmission and distribution and should
therefore continue to be accounted for in a traditional manner (i.e. returned
to customers over the live of the T & D assets); the remaining $52 million of
generation-related regulatory liability, if credited to customers
immediately, would place the company in violation of Internal Revenue Code
tax normalization requirements; and that the $13 million characterized in the
order as a deferred receivable is not a regulatory liability, but is merely
one of two off-setting bookkeeping entries reflecting future tax obligations
of PSNH and is not an amount that PSNH customers would ever receive.

     In support of its first two arguments, PSNH submitted the affidavit of
John P. Stack, Executive Director-Corporate Accounting and Taxes for both
Northeast Utilities and Public Service Company of New Hampshire.  PSNH also
submitted a private letter ruling issued by the Internal Revenue Service to
another taxpayer.  Mr. Stack's affidavit states that if the Commission were
to order an immediate return of the excess deferred income taxes (EDIT) and
investment tax credits (ITC) which comprise the $65.6 million in question,
PSNH would be in violation of Internal Revenue Tax Code provisions which
require that such credits be made to customers over the life of the asset
from which the tax benefits were derived.  Mr. Stack's affidavit also
indicates that the penalty for such a violation would "create a tax problem
of great enormity, resulting in significant harm to both PSNH and its
customers."  Motion of Public Service Company of New Hampshire for Rehearing
of Order 23,443, Attachment A, p. II. (May 1, 2000).  The affidavit described
this tax problem as "PSNH's inability to continue to use accelerated tax
depreciation for its utility assets," the elimination of the opportunity to
use such ITC that remains unutilized by PSNH, and the repayment of ITC which
has been used since 1994 to the present.  In his oral testimony at the May
17, 2000 hearing on PSNH's Motion, Mr. Stack essentially provided the same
information contained in his written affidavit.  He also provided additional
details concerning the above-referenced adverse tax consequences to
ratepayers.  In addition, the oral testimony of PSNH Witness Michael Mahoney
at the May 17 hearing supported the portion of PSNH's Motion that concerned
the treatment of the $13.6 million EDIT and ITC associated with T & D assets.
See Rehearing Transcript, May 17, 2000, pp. 135-137.

     No party objected to the ruling sought in PSNH's Motion.  However,
comments filed on May 15, 2000 by GOECS and Settling Staff indicate that they
believed the original Settlement Agreement contained value over time
attributable to EDIT and ITC and that resolution of an IRS issue that arose
after the Settlement Agreement was negotiated should not diminish the
negotiated value of that settlement.

     b.   Analysis and Findings

     The Commission is somewhat troubled by PSNH's failure to raise its
arguments concerning the alleged mischaracterization of the $78.6 million of
regulatory liabilities and the possible consequences of an immediate return
of these amounts to consumers prior to the issuance of the April 19 Order.

     The proposed treatment of these amounts was raised in the pre-filed direct
testimony of Staff Advocate witness Mr. McCluskey, and Mr. McCluskey
testified during the hearings in this docket in January 2000.  Yet PSNH did
not cross-examine Mr. McCluskey on this issue, did not rebut his
recommendations through its own rebuttal witnesses, and did not address this
matter at all in its brief.

     Where an issue in a proceeding has a potentially significant impact upon
rates, such as the possible complete loss of the use of accelerated
depreciation for utility assets, we believe that it is incumbent upon the
utility to respond to the matter during the hearing in a manner that affords
the Commission and all intervenors the opportunity to fully explore and
question the respective positions.  Certainly, the Commission's ability to
achieve a balanced and equitable result in the complex matters before it is
somewhat dependent upon the parties' cooperation in developing a complete
factual record.  A utility's failure in this regard, where it has adequate
notice and opportunity to respond, may result in the Commission determining
that the utility has waived its right to raise the issue on rehearing.

     Nonetheless, in the present case, we will grant the relief requested in
the Motion for Rehearing.  In the rehearing of this issue, PSNH argued, and
no party rebutted, that the consequences of immediate return of these amounts
is severe:  loss of the use of accelerated tax depreciation.  While it may be
possible that such a result may not ultimately occur, the risk exists.  Most
compelling though, is the intervening event of the Legislature's passage of
SB 472, which contains an explicit determination of the level of customer
savings that the PSNH settlement must realize in order to satisfy the overall
principles and goals of electric restructuring, and a specific set of actions
that will be deemed to satisfy that condition.  PSNH has committed to satisfy
each and every one of those conditions, and we therefore find that it is no
longer necessary to require the reduction of the Part 3 stranded costs by
$78.6 million in order to achieve the appropriate balance to stranded cost
recovery.  This balance is achieved, as the Legislature has determined, by
the satisfaction of the numerous conditions in RSA 369-B:3, IV(b).

      The Commission has received a number of rate design/cost-of-service
related motions or requests for clarification or reconsideration since
issuance of our April 19 Order.  The BIA questioned the change to the
Stranded Cost Recovery Charge (SCRC) contained in Order No. 23,443 for lack
of an evidentiary basis and proposed that the Commission revisit the
allocation of the SCRC in a future rate proceeding to ensure that the SCRC is
consistent with applicable law and regulatory practice.  The BIA sought
rehearing to ascertain whether Order No. 23,443 binds future rate design
outcomes due to the methodology described in the order, especially as it
relates to SCRC.  Others, such as CRR, Granite State Taxpayers, THINK-NH, and
NHPIRG, in their Motion for Rehearing, assert that the SCRC is neither fair
nor non-discriminatory because it is a different rate charged various classes
of customers and was improperly based on distribution-related costs that
should not affect the allocation of generation-related stranded costs.

     By its July 24, 2000 Post Hearing Brief, Wausau Papers of New Hampshire
objects to PSNH's Motion for Findings of Fact and For Issuance of Finance
Order, including the Proposed Finance Order, because Wausau believes that
PSNH's Proposed Finance Order  violates RSA 369-B and therefore the proposed
finance order by PSNH cannot be adopted.  Wausau is joined by Great Bay in
this view. Wausau and Great Bay argue that the Proposed Finance Order
provides PSNH with too much discretion as to what it may modify regarding the
structure of the RRB transactions as PSNH negotiates with rating agencies and
tax authorities. For its support, Wausau cites RSA 369-B as unambiguously
specifying under what terms and conditions the RRB charge may be assessed and
collected.  Specifically, Wausau asserts that the RRB charge can only be
collected based on the actual retail usage of a customer and that the RRB
charge must be assessed on a per kWh basis.  Wausau also discusses the PUC's
authority to allow PSNH to collect back-up, maintenance and emergency service
subject to the limitation in RSA 369-B:4,VI, which prohibits any charge that
is designed to "create a charge similar to or has the same effect as an exit
fee."  In Wausau's opinion, allocations between the RRB and other charges is
permissible, but any allocation must be based on the actual per kWh usage of
the retail customer.

     We begin our consideration of the above mentioned requests and motions
with the observation that our April 19 Order devoted a considerable amount of
attention and analysis to these important issues, and did so based on the
extensive record that had been created in the proceeding.  Therefore, the
argument by BIA that the record for our change to the SCRC lacked an
evidentiary basis is without merit.  In as much as BIA's request would appear
more like a request for clarification than a rehearing request, such
clarification is hereby given. We see no need to grant rehearing for that
request, however. BIA seeks to know whether our April 19 Order binds future
rate design proceedings.  As we have stated previously in this order, it does
not.

     The claim by CRR et al, that the SCRC is discriminatory and unfair,
ignores the Commission's analysis of the testimony presented by PSNH and that
of OCA's witness, Dr. Stutz, who examined each component of the stranded
costs.  Based on the extensive record on this issue, the Commission found
that melding PSNH's mechanism with that of an equal-cents-per-kWh approach
better approximated the expected results of a cost-of-service study.  April
19 Order at 209.  Moreover, as we stated in our April 19 Order, we have the
authority to resolve all pending matters in this proceeding in the context of
an adjudicated settlement proceeding, including the allocation of SCRC by
class.  Finally, we point out to CRR et al, that the Legislature in its
passage of RSA 369-B has confirmed the SCRC approved in our April 19 Order.

     We believe the concerns Wausau alludes to in its Motion for Findings of
Fact and For Issuance of Finance Order are addressed adequately in the
Finance Order which accompanies this order.  As Great Bay has raised similar
concerns in its Brief Regarding Financing Phase of Proceeding, they also are
addressed in the Finance Order.

      In its May 1, 2000 compliance letter, PSNH accepted the Commission's
adjustment to the SCRC class rate methodology proposed by PSNH.  In our April
19 Order, the Commission found that for the initial delivery charge period,
the SCRC would be based on adjusting the SCRC halfway between the methodology
proposed by PSNH and OCA's equal cents per kWh approach.  PSNH sought a
clarification from the Commission that PSNH would still have the flexibility
to address certain inter-class transition rate problems that were part of its
initial rate design proposals.  Specifically, PSNH seeks clarification that
the Commission's April 19 Order should be "interpreted to mean that the
residential class should receive the approximate percent decrease shown in
Section P (10) of the order, but that there is rate design flexibility with
respect to the percent decrease applied to all other classes as long as the
overall average decrease is at the level determined by the Order."  Ex. R-1
at 6.  We agree that a certain level of flexibility is warranted to ease
transitions as commercial and industrial customers move from one rate class
to another.  We expect PSNH to elaborate on how it will accomplish those rate
transitions in its compliance tariff filing.

     The Office of Consumer Advocate (OCA) requests that the Commission require
that C-Day occur immediately following securitization.  OCA argues that
"(a)ny delay will provide significant benefits to PSNH beyond those
envisioned in Commission orders and legislation at the expense of
ratepayers."  OCA Brief at 2.  In support of this request, the OCA notes that
according to the relevant provisions of the  revised Settlement Agreement,
several conditions must be met before C-Day can occur.  One of those
conditions is securitization.  The OCA argues that because the revised
Settlement Agreement does not indicate that C-Day will occur immediately
following securitization, there is a possibility that securitization could
occur but that competition could be delayed indefinitely because of delays in
achieving other conditions listed in Section XVI of the revised Settlement
Agreement such as obtaining necessary regulatory approvals.  Id.,  p. 1.   In
effect, the OCA argues that a delayed C-Day under this scenario would result
in PSNH receiving the benefit of securitization while its customers wait for
the benefit of competition.  The OCA also states that, during the hearing on
the revised Settlement Agreement, PSNH was reluctant to formally eliminate
from the Settlement Agreement those conditions that might possibly delay
C-Day beyond the time that securitization occurs.  Id., p.2.

     The revised Settlement Agreement defines Competition Day as "(t)he date
upon which all PSNH retail customers will be able to choose a Competition
Supplier of energy.  More specifically, Competition Day is the first day of
the month following the month in which the conditions contained in Section
XVI are satisfied."  Agreement to Settle PSNH Restructuring, Conformed as of
June 23, 2000, p. 5.  Notwithstanding the fact that the revised Settlement
Agreement (at pages 4 to 5) purports that it is conformed to reflect the
requirements of Chapter 249 of the Session Laws of 2000, the definition of
Competition Day set forth above does not include the wording of Laws of 2000,
Chapter 249, Section 7, I which states that "(c)ompetition day for PSNH as
defined in RSA 369-B:2, III shall be not later than October 1, 2000, unless
the commission finds due to circumstances beyond its control that further
delay is in the public interest."

     Section XVI of the revised Settlement Agreement sets forth six conditions
which must be met to the satisfaction of all parties as a conditions precedent
to implementing the revised Settlement Agreement.  Id., pp. 75-76.  One of
those conditions is that PSNH must close on the issuance of the Rate
Reduction Bonds, and another is that all necessary final approvals, without
condition or modification, of other jurisdictional matters must be obtained,
as required, from the Federal Energy Regulatory Commission, the Securities
and Exchange Commission, the Nuclear Regulatory Commission, and the Connecticut
Department of Public Utility Control.  Id., p. 76.  While the OCA asserts that
"experience indicates it is clearly possible that there will be conditions or
modifications by other jurisdictions that could hold up 'C' day", OCA Brief
at 2, PSNH's President and CEO, Gary Long testified that it is not PSNH's
"intent to issue rate reduction bonds without C-day happening soon
thereafter." Transcript, July 7, 2000, Day II, p. 128.  In light of Mr. Long's
testimony concerning PSNH' s intent regarding the timing of C-Day, we will
order PSNH to implement the provisions of the revised Settlement Agreement
consistent with that stated intent.  In addition, the definition of
Competition Day found at page 5 of the revised Settlement Agreement shall be
amended to reflect the provisions of Laws of 2000, Chapter 249:7,  I.

     On May 19, 2000, the New Hampshire Department of Environmental Services
(DES) filed a letter alerting the Commission to certain minor technical
inaccuracies concerning environmental issues, found in Order No. 23,443 on
pages 267 and 268.  These errors and inaccuracies relate to the date on which
certain controls were stated to have been installed, the timing of certain
reductions in pollutants, and the extent to which PSNH was first in the world
in implementing certain controls.  DES did not send this letter to all the
parties.  The record does not support all the corrections that DES proposes
to make, and the correction of the inaccuracies cited would not affect the
Commission's disposition of this matter.  In any event, rather than reopening
the record to clear up any remaining discrepancies, we will leave the April
19 Order as is, acknowledging the possibility that there are some inadvertent
and non-substantive errors in our factual description of the history and
status of pollution control at PSNH plants.

     The May 15, 2000 Comments of the Governor's Office of Energy and Community
Services and the Settling Staff raises a concern about the use of monitoring
funds during the Initial Delivery Charge period.  The original Settlement
Agreement provides for monitoring funds up to $350,000 per year.  GOECS and
Settling Staff state that the $350,000 was never intended to be used for
auction administration and oversight, but rather for determining such things
as whether customer and line service standards were being met, stranded costs
were trued-up and allocated correctly, and whether the costs of generation
before divestiture were properly identified and allocated.  GOECS and Settling
Staff point out that auction-related costs could easily exceed the $350,000
amount; it was their intention that auction oversight costs would be funded
separately and the costs would be netted against the auction proceeds.

     We agree with GOECS and Settling Staff's position on the importance of
monitoring various operations and cost allocations during the Initial
Delivery Charge period;  however, we will not specify now whether the
$350,000 per year as proposed in the original Settlement Agreement should be
used solely for monitoring.  The Commission will evaluate its needs in regard
to the use of those funds periodically and make determinations appropriate to
those needs based on that assessment.  We point out that the original
Settlement Agreement and the Conformed Settlement Agreement are silent as to
what happens to the funds if they are not fully expended in a particular
period.  To preserve the benefits of this negotiated fund, we expect that any
monitoring funds not expended in a given year will be carried forward.

     Order No. 23,443 issued on the original Settlement Agreement in this
docket contained several conditions that the Commission found necessary to
meet the various statutory prerequisites for a  resolution of PSNH
restructuring issues.  In that Order, we determined that "to provide a more
appropriate balance to this agreement, and fully satisfy these requirements,
certain parts of the Settlement Agreement must be amended..." Order
No. 23,443 at p. 189.  In its May 1, 2000 filings, PSNH responded to the
conditions set forth in Order No. 23,433 by accepting the bulk of them,
suggesting an alternative approach to transition service and moving for
reconsideration only of the condition regarding the reduction of Part 3
stranded costs as that reduction relates to EDIT and ITC.  One of the
conditions for implementing the original Settlement Agreement contained in
that document, and which the Commission left unchanged in its April 19 Order
is that legislation must be enacted allowing the securitization of assets and
the issuance of rate reduction bonds in a manner that is fully consistent
with the Settlement Agreement.  Chapter 249 of the Laws of 2000, enacted June
12, 2000, constitutes that legislation, and the Conformed Settlement
Agreement dated June 23, 2000,  recognizes this at page 71.  The Conformed
Settlement Agreement also purports "to reflect changes and corrections made
during hearings before the New Hampshire Public Utilities Commission in
docket DE 99-099, the requirements of Chapter 249 of the Session Laws of 2000
and Order No. 23,443 of the New Hampshire Public Utilities Commission."
Agreement to Settle PSNH Restructuring, Conformed as of June 23, 2000, p. 1.

     Certain sections of Laws of 2000, Chapter 249, have been codified as RSA
369-B.  In RSA 369-B:1, VII, the Legislature made an express finding that
implementation of PSNH's securitization proposal that was the subject of the
Commission's April 19 Order, subject to the conditions listed in that Order
and as further modified by Chapter 249 of the Laws of 2000, will result in
benefits to customers that are substantially consistent with the principles
contained in RSA 374-F:3 and RSAs 369-A:1,X and XI.  Under the portion of
Chapter 249 that has been codified as RSA 369-B:1, IX, the Legislature found
that it is in the public interest if the Commission issues a finance order
that is subject to the conditions and requirements of Chapter 249 and is
otherwise substantially consistent with RSAs 374-F:3 and 369-A:1.  Thus, the
Legislature has found that a finance order that is subject to all of the
conditions and requirements of Chapter 249, RSA 374-F:3 and RSA 369-A:1 is in
the public interest.  Since the Legislature has also found (at RSA 369-B:1,
VII) that PSNH's securitization proposal as approved in the Commission's
April 19 Order and as modified by applying all of the conditions in Chapter
249 will be substantially consistent with RSA 374-F:3 and RSA 369-A:1, X and
XI, the public interest burden set forth in RSA 369-B:1, IX will be met if
the Commission issues an order that conforms to the requirements of Chapter
249.

     The Legislature has effectively required that the Commission modify
several provisions of its April 19 Order by conditioning the Commission's
ability to issue a finance order upon the Commission's inclusion in such
order of several specific provisions that relate not merely to financing or
securitization but also to:  rate design, price and provisioning of
transition service, assignment to customers post-transition period, amount of
customer savings, merger issues, system benefits charge, special contract
issues and commission responsibilities for divestiture and transition
service, to name a few.  Thus, while the Legislature did not explicitly state
that it was compelling the Commission to amend its April 19 Order, Chapter
249 effectively produces that result.  The Legislature was undoubtedly aware
that a finance order is an essential prerequisite to implementing
restructuring for PSNH under the Settlement Agreement and under our April 19
Order, and therefore it is reasonable to infer that it is in the public
interest to approve a Settlement Agreement that conforms to all of the
provisions of Chapter 249 that purport to be requirements for a finance
order, but which also addresses and alters substantive provisions of the
April 19 Order that relate to matters other than financing.  We may also
presume that the Legislature made these determinations in light of the
alternatives, particularly the risk that without legislation confirming the
Settlement Agreement, albeit with modifications, no restructuring settlement
would be possible, and continued litigation before the Commission and the
Courts would be inevitable.

     At the hearing on the Conformed Settlement Agreement, PSNH submitted an
"errata sheet" dated July 5, 2000 and entitled "Additional Changes to
"Agreement to Settle PSNH Restructuring" as conformed to June 23, 2000."
This document, Exhibit F-7, contains changes to the Conformed Settlement
Agreement (Exhibit F-2),  made by the Settling Parties as the result of
technical sessions held on June 29 and 30, 2000.  Based upon the record of
this proceeding, and in light of the passage of Chapter 249 of the Laws of
2000, we find it in the public interest to approve the Conformed Settlement
Agreement as further modified by the so-called "errata sheet" subject to the
following:

    1.  Because the definition of Competition Day found in Section II of the
Conformed Settlement Agreement does not reflect the language contained in the
Laws of 2000, Chapter 249:7, I, it shall be modified to read as follows:
The date upon which all PSNH retail customers will be able to choose a
Competition Supplier of energy.  More specifically, Competition Day is
the first day of the month following the month in which the conditions
contained in Section XVI are satisfied and shall not be later than
October 1, 2000, unless the commission finds due to circumstances beyond
its control that further delay is in the public interest.

    2.  Lines 2103 to 2105 of the Conformed Settlement Agreement shall be
modified to read as follows:

The PUC's approval of this Agreement shall endure so long as necessary
to fulfill the express objectives of this Agreement to the extent
indicated in Chapter 249 of the Laws of 2000.

We have opined previously on this subject in Orders No. 23,346 at pages 8-11
(November 16, 1999) and No. 23,443 at pages 276-278  (April 19, 2000).  Apart
from our consideration of Chapter 249 of the Laws of 2000, we see no reason
to depart from our previous position on this matter.  Accordingly, we will
interpret this language in a manner that is consistent with the authority of
the Commission and it shall not create any greater binding or precedential
effect than that which is normally accorded a final order of the Commission
except insofar as Chapter 249 of the Laws of 2000 indicates otherwise.

     Finally, as part of its compliance filing, we will require PSNH to file a
final Settlement Agreement that reflects the changes required by this Order.

     At the July 7, 2000 hearing, counsel for GOECS and for SOHO raised
questions concerning elements of the tariff filed along with the Conformed
Settlement Agreement.  Between them, they questioned (a) the insertion of the
qualifier "willful" as a limitation on the Company's liability in the case of
its negligence, (b) the inclusion of a $5 fee for changing to transition or
to default service, or between suppliers, in contrast to Granite State
Electric Company's provision for charging competitive suppliers, (c) the
unavailability of Transition Service to low-income customers not receiving
LIHEAP who have previously left Transition Service and wish to return, and
(d) the Company's offering of collection services to competitive suppliers.
Additional issues were clarified at the hearing through introduction of two
errata sheets by the Company.

     The low-income Transition Service availability term noted by GOECS and
SOHO was amended during the hearings by language negotiated between GOECS and
PSNH, which was entered into the record as Exhibit F-20.  Under this revised
language, the Company agrees that a customer who has been certified to be
eligible for the Statewide Electric Assistance Program, as approved by the
Commission in Docket 96-150, or eligible for other appropriate means-tested
programs, may return to Transition Service, even if they are not currently
recipients of aid under such programs.  We accept this amendment to the
proposed tariff.

     At the hearing, the Company objected to examination on the remaining
topics, as no party had raised them in their motions for rehearing.  The
Commission ruled that it was out of order to pursue these topics at this
time.  We will permit the parties to raise these questions once the Company
has filed its Compliance Tariff in this docket, and will determine at that
time whether, how and when to consider the changes requested by GOECS and
SOHO.

     The Compliance Tariff referred to above must take into account and reflect
the provisions of  this Order, the Finance Order, the Provisions of the April
19 Order that have not been modified by either of these orders, and Chapter 249
of the Laws of 2000.

     In conclusion, we wish to once again thank all of the parties and members
of our Staff involved in this phase of the proceeding.  Although there are
still many issues to address as we move forward with restructuring, we
consider the completion of this phase to be a critical step toward the
implementation of electric restructuring for PSNH.

     Based upon the foregoing, it is hereby

     ORDERED, that all motions for rehearing and/or reconsideration and
clarification are Denied except as otherwise noted; and it is

     FURTHER ORDERED, that Public Service Company of New Hampshire revise its
Conformed Settlement Agreement to comply with our findings as discussed above
and file both clean and red-lined copies with the Commission by September 22,
2000; and it is

     FURTHER ORDERED, that Public Service Company of New Hampshire, after
consulting with Staff, file a tariff, on or before September 29, 2000, that
complies with this Order, the Finance Order, the Provisions of the April 19
Order that have not been modified by either of these orders, and Chapter 249
of the Laws of 2000.


     By order of the Public Utilities Commission of New Hampshire this
eighth day of September, 2000.


Douglas L. Patch          Susan S. Geiger          Nancy Brockway
Chairman                  Commissioner             Commissioner


Attested by:



Claire D. DiCicco
Assistant Secretary





<FN 1>  To the extent that the requirement of RSA 374-F:3, XII(c)(4) that only
a reasonable amount of surplus assets be written off may be in conflict with
the prohibition in RSA 378:28 against including in permanent rates a return
on plant not found to be "used and useful," we believe that Chapter 374-F
prevails.  As the Supreme Court discussed in In re NHPUC, "when conflict
exists between two statutes, [the] later statute prevails."  722 A.2d at
488, 143 at 238, quoting from Petition of Public Service Company of New
Hampshire, 130 N.H. 265, at 283 (1988).



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>EXHIBIT D 3.3.1 - PSNH APPLICATION TO MAINE PUC
<TEXT>


EXHIBIT D 3.3.1







                                        September 22, 2000


Hand Delivered

Dennis L. Keschl, Administrative Director
Maine Public Utilities Commission
242 State Street
State House Station 18
Augusta, ME 04333-0018

Dear Mr. Keschl:

     I write on behalf of Public Service Company of New Hampshire
("PSNH") to request approval, pursuant to 35-A M.R.S.A. Section 708,
of a reorganization that will occur upon the creation by PSNH of a
wholly-owned subsidiary limited liability company (referred to
hereinafter as "SPE").  The creation of SPE is an integral part of the
restructuring of the electric utility industry in New Hampshire, and
is required in connection with the securitization of stranded costs
and the issuance of rate reduction bonds.

     The proposed industry restructuring is the product of legislation
and a Settlement Agreement designed to reduce PSNH's rates, negotiated
by PSNH and its parent, Northeast Utilities, the Governor of New
Hampshire, the Governor's Office of Energy and Community Services, New
Hampshire's Office of Attorney General, and the Staff of the New
Hampshire Public Utilities Commission.  Implementation of the
Settlement Agreement will provide sizable near-term rate reductions
for PSNH customers.  The rate decrease results from an agreed-upon
write-off by PSNH of approximately $367 million, a sharing of the risk
of recovery of stranded costs by PSNH, the sale at auction of PSNH's
generating assets, and the issuance of rate reduction bonds in an
amount not exceeding $670 million.  PSNH's customers will have the
opportunity to lower their electric energy costs even further, by
choosing a competitive energy supplier.

     The New Hampshire Public Utilities Commission approved the
issuance of the rate reduction bonds and related transactions by
"Order Addressing Financing Issues dated September 8, 2000" ("Finance
Order") (copy printed from the internet is attached).  A simplified
description of the proposed securitization follows:

     Upon creation of SPE, PSNH will transfer into SPE "Rate Reduction
Bond Property," an irrevocable vested property right created by the
Commission in the Finance Order, which includes the right to all
revenues, collections, claims, payments, money or proceeds arising
from the Rate Reduction Bond Charge authorized by the Finance Order.
SPE will then issue not more than $670 million of rate reduction bonds
("RRBs") secured by Rate Reduction Bond Property.  The RRBs will be
repaid through the collection of an RRB charge from all retail
customers of PSNH.  PSNH will use the proceeds from the transfer of
the Rate Reduction Property to SPE to retire existing debt, and the
Company will be recapitalized.  PSNH ratepayers will benefit from the
retirement of existing, higher cost, debt.  Accordingly, PSNH rates
will be significantly lower than they would be if the transaction did
not occur.

     This Commission has historically granted exemptions or approvals
to PSNH for various reorganizations and the issuance of securities.
Recent examples include Docket No. 90-093, the proceeding involving
PSNH's bankruptcy Plan of Reorganization, and Docket No. 98-182,
wherein the Commission by Order dated March 31, 1998 exempted PSNH
from the approval requirements of Sections 708, 901 and 1101 for any
"issuance of securities, including the granting of any mortgage on or
security interest in PSNH's properties in Maine or elsewhere...so long
as PSNH is incorporated under the laws of a state other than the State
of Maine and the issuance is approved by the agency regulating public
utilities in that state."  Most recently, in Docket No. 2000-46, the
Commission granted Section 708 approval to the merger of Northeast
Utilities and Consolidated Edison, Inc.  In its March 17, 2000 Order,
the Commission noted that:

     PSNH's contacts with the state of Maine are extremely
limited.  While it owns and operates certain transmission and
distribution plant in Maine, it does not provide retail service
to any customers in Maine nor does it receive any compensation in
Maine as a result of the properties it owns in Maine.  Our
primary interest is in assuring that PSNH maintains its T&D plant
in Maine in a safe and reasonable manner.

     Because PSNH's contacts are so limited, we believe we can
adequately discharge our responsibilities under Section 708 by
approving the merger upon the condition that the merger be
approved by the New Hampshire Public Utilities Commission and the
Federal Energy Regulatory Commission.

     PSNH's contacts with the state of Maine have not changed since
the Commission's Order in 2000-46.  The principles supporting the
Commission's decision in that case apply with equal force here.
Indeed, since the purpose of the transaction is to benefit New
Hampshire ratepayers, this Commission can adequately discharge its
responsibilities under Section 708 by approving the reorganization
caused by the creation of wholly-owned SPE in light of the New
Hampshire Commission's Finance Order of approval.

     For the reasons set forth above, PSNH requests that the
Commission issue an order, as soon as possible, approving the
transaction under Section 708.

     I appreciate the Commission's attention to this request.  If you
need further information, please do not hesitate to contact me.

                                      Sincerely,


                                      Jerrol A. Crouter

cc:  Joanne B. Steneck, Esq.
     Public Advocate
     Catherine E. Shively, Esq.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>EXHIBIT D 3.3.2 - MAINE ORDER
<TEXT>




EXHIBIT D 3.3.2



STATE OF MAINE                                           Docket No. 2000-803
PUBLIC UTILITIES COMMISSION
                                                         October 3, 2000

PUBLIC SERVICE COMPANY OF                                ORDER
NEW HAMPSHIRE, Request For Approval
Of Reorganization


               WELCH, Chairman; NUGENT and DIAMOND, Commissioners

I. SUMMARY

   Pursuant to 35-A M.R.S.A. Section 708, we approve a reorganization that
will occur when Public Service Company of New Hampshire (PSNH) creates a
wholly-owned, limited liability company (referred to herein as SPE). Creation
of SPE is required in connection with the securitization of PSNH's stranded
costs and the issuance of rate reduction bonds, which are integral parts of
the restructuring of the electric industry in New Hampshire.

II. DISCUSSION AND DECISION

   On September 22, 2000, PSNH requested our approval of a reorganization in
which it will create a wholly-owned limited liability company, SPE. This
Commission has previously determined that PSNH is a "public utility" in Maine
subject to the jurisdiction of the Maine Public Utilities Commission because
PSNH owns property in Maine, which is defined as "transmission and
distribution plant" under 35-A M.R.S.A. Section 102(20-A). This primarily
consists of transmission lines. See Public Service Co. of New Hampshire,
Request for Exemption of 35-A M.R.S.A. Section 708(2)(A), Docket No. 2000-46
(Mar. 17, 2000) (listing PSNH's T & D properties in Maine). Under 35-A
M.R.S.A. Section 708, the Commission must approve utility reorganizations. No
reorganization may be approved unless the Commission finds that "the
reorganization is consistent with the interests of the utility's ratepayers
and investor." Also in approving any reorganization, the Commission must
assure that "the ability of the utility to provide safe, reasonable and
adequate service is not impaired." 35-A M.R.S.A. Section 708(2)(A)(4).

   Creation of the SPE subsidiary is an integral part of the electric
industry restructuring that resulted from legislation and a settlement
agreement negotiated by PSNH, the Governor of New Hampshire, various New
Hampshire agencies and the staff of the New Hampshire Public Utilities
Commission. The New Hampshire Public Utilities Commission approved the
settlement and recently issued an order that will allow the reorganization to
take place. Public Service Company of New Hampshire, DE 99-099, Order No.
23,550, Proposed Restructuring Settlement, Order Addressing Financing Issues
(Sept. 8, 2000).

   As noted above, PSNH's contacts with the State of Maine are extremely
limited.  While it owns and operates certain transmission and distribution
plant in Maine, it does not provide retail service to any customers in Maine
nor does it receive any compensation in Maine as a result of the properties
it owns in Maine. Our primary interest is in assuring that PSNH maintains its
T&D plant in Maine in a safe and reasonable manner.

   Because PSNH's contacts are so limited, we believe we can adequately
discharge our responsibilities under section 708 by approving the
reorganization based on the New Hampshire Public Utilities Commission's
approval. We expect that the reorganization will not affect PSNH's ability to
maintain its T&D plan in Maine in a safe and reasonable manner and in
accordance with the National Electric Safety Code, as required by 35-A
M.R.S.A. Section 2305-A(2).

   Accordingly, we approve the reorganization as described in PSNH's request
dated September 22, 2000.


               Dated at Augusta, Maine, this 3rd day of October, 2000.

                                BY ORDER OF THE COMMISSION

                                    Dennis L. Keschl
                                  Administrative Director


COMMISSIONERS VOTING FOR:   Welch
                            Diamond

COMMISSIONER ABSENT:        Nugent



                        NOTICE OF RIGHTS TO REVIEW OR APPEAL

   5 M.R.S.A. Section 9061 requires the Public Utilities Commission to give
each party to an adjudicatory proceeding written notice of the party's rights
to review or appeal of its decision made at the conclusion of the
adjudicatory proceeding. The methods of review or appeal of PUC decisions at
the conclusion of an adjudicatory proceeding are as follows:

1.  Reconsideration of the Commission's Order may be requested under Section
1004 of the Commission's Rules of Practice and Procedure (65-407 C.M.R.110)
within 20 days of the date of the Order by filing a petition with the
Commission stating the grounds upon which reconsideration is sought.

2.  Appeal of a final decision of the Commission may be taken to the Law
Court by filing, within 30 days of the date of the Order, a Notice of Appeal
with the Administrative Director of the Commission, pursuant to 35-A M.R.S.A.
Section 1320(1)-(4) and the Maine Rules of Civil Procedure, Rule 73, et seq.

3.  Additional court review of constitutional issues or issues involving the
justness or reasonableness of rates may be had by the filing of an appeal
with the Law Court, pursuant to 35-A M.R.S.A. Section 1320(5).

Note: The attachment of this Notice to a document does not indicate the
Commission's view that the particular document may be subject to review or
appeal. Similarly, the failure of the Commission to attach a copy of this
Notice to a document does not indicate the Commission's view that the
document is not subject to review or appeal.


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