<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>nuu1aexhd4062904.txt
<DESCRIPTION>EXHIBIT D.4 NH DECISION
<TEXT>
Exhibit D.4

DE 04-039
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE

Petition for Financing Authority

Order Following Hearing

O R D E R   N O. 24328

May 21, 2004

APPEARANCES: Catherine E. Shively, Esq. for Public Service
Company of New Hampshire; Office of Consumer Advocate by F.
Anne Ross, Esq. on behalf of residential ratepayers; and
Donald M. Kreis, Esq. of the Staff of the New Hampshire
Public Utilities Commission.

I.                     PROCEDURAL HISTORY

On March 15, 2004, Public Service Company of New Hampshire
(PSNH) filed a petition with the New Hampshire Public
Utilities Commission (Commission) seeking authority to (1)
incur approximately $200 million in secured or unsecured
long-term debt through 2006, (2) use "rate swaps" or other
derivative financial instruments in connection with these
securities so as to manage interest rate risk, (3) mortgage
its property in connection with the issuance of long term
debt and first mortgage bonds, and (4) increase the
Company's short-term debt limit from $100 million to $150
million. RSA 369 treats debt instruments payable within 12
months or more after issuance as long-term debt and all
other debt as short-term.

The Commission issued an Order of Notice on March 31, 2004.
The Order of Notice scheduled a pre-hearing conference for
April 14, 2004 (waiving, in part, the fourteen day
notification requirement of N.H. Admin. Rules Puc 203.01(a))
and established April 12, 2004 as the deadline for
intervention petitions. The Office of Consumer Advocate
(OCA) entered an appearance on behalf of residential
ratepayers pursuant to RSA 363:28, II on April 7, 2004.

The pre-hearing conference took place as scheduled on April
14, 2004. The parties and Staff conducted a technical
session immediately thereafter and requested the Commission
to set a hearing date of May 4, 2004. The Commission did so
by secretarial letter issued on April 27, 2004.

On May 3, 2004, PSNH filed a settlement agreement entered
into by PSNH, OCA and Staff proposing a resolution of all
outstanding issues in the docket. The Commission conducted
its scheduled hearing on April 4, 2004 and heard testimony
from Randy A. Shoop, Assistant Treasurer of PSNH.

II.           SUMMARY OF THE SETTLEMENT AGREEMENT

The Settlement Agreement entered into by the parties and
Staff scales back PSNH's request significantly.
Specifically, the Agreement authorizes PSNH to (1) issue an
additional $50 million in long-term debt over a 12-month
period, with the use of the proceeds limited to repayment of
short-term debt and funding working capital needs, (2)
mortgage its property in connection with the issuance of
secured long-term debt, (3) use derivative financial
instruments, but only in connection with the newly
authorized $50 million in long-term debt, and (4) maintain
the Company's current short-term debt limit of $100 million.

According to the Settlement Agreement, there is a
"fundamental difference of both legal interpretation and
philosophy" between PSNH on the one hand and OCA and the
Commission Staff on the other with respect to so-called
"shelf registration" authority. This refers to PSNH's
original request for authority to issue $200 million in
additional long-term debt on terms of the Company's choosing
between now and 2006. With respect to the more modest plan
to allow PSNH to issue up to $50 million in long-term debt,
the Settlement Agreement calls for allowing PSNH "the
flexibility to determine the precise amount and timing of
the debt financing, the market in and the method by which
the debt is issued, the principal amounts, the terms and
provisions, price and [the] interest rate of the borrowing
based on market conditions at the time of issuance."
Pursuant to the Settlement Agreement, such authority would
be based on (1) PSNH's representation that its financing
plan contemplates issuance of long-term debt whenever its
short-term debt consistently exceeds the $50 million to $75
million range, (2) the new long-term debt being subject to a
maturity range of 2 to 30 years, (3) the coupon being
consistent with market rates for an instrument of similar
maturity and risk but with the credit spread above the rate
associated with 10-year U.S. Treasury bonds not exceeding
250 basis points, (4) the ratio of PSNH's debt to the
Company's total capitalization remaining targeted at 55
percent, and (5) PSNH's agreement to use the proceeds only
to repay short-term debt or for funding working capital
needs.

According to the Settlement Agreement, PSNH is seeking
authority to enter into interest rate swaps and other
derivative instruments <FN1>) to manage the interest rate
risk associated with its issuance of new long-term debt. The
Company noted that it may not exercise this authority and
that any decision to do so would be dependent on market
conditions at the time of issuance of the underlying debt
instrument as well as the expected conditions through the
life of the instrument.  The Settlement Agreement limits PSNH's
authority to enter into derivative transactions as compared to
the initial proposal. Under the Settlement Agreement, the use of
derivates would be limited to the proposed $50 million long-
term debt issuance (as opposed to all outstanding debt).

PSNH is currently authorized to issue up to $100 million in
short-term debt. As a part of the Settlement Agreement, PSNH
opted not to seek any additional authority to issue such
debt.


III.                  COMMISSION ANALYSIS

RSA 369:4 authorizes the Commission to approve a utility's
request to issue longterm debt "if, in its judgment the
issue of such securities upon the terms proposed is
consistent with the public good." Upon review of PSNH's
proposal, as limited by the Settlement Agreement, it is our
determination that the issuance of additional long-term debt
and the related request for authority to enter into
derivative transactions meet the standard for approval in
RSA 369:4.

Pursuant to N.H. Code Admin. Rules Puc 307.05, no utility
may issue or renew any short-term debt if the company's
total short-term debt exceeds 10 percent of the utility's
net fixed plant without prior Commission approval. Exhibit 4
in this proceeding indicates that, as of March 31, 2004,
PSNH's net utility plant was approximately $948.7 million.
Thus, according to the exhibit, $100 million in short-term
debt would be approximately 10.54 percent of the Company's
net utility plant. PSNH is not currently at or near this
limit. See, e.g., Exh. 1 at 45 (indicating that as of
December 31, 2003 PSNH had approximately $58.9 million in
outstanding short-term debt). The Settlement Agreement
furthers the purposes of Puc 307.05 by not allowing PSNH to
cross the 10 percent threshold without appropriate
regulatory scrutiny.

Overall, what the parties and Staff propose here amounts to
an expansion of PSNH's authority to issue long-term debt
that is reasonable in relation to the Company's foreseeable
needs. It is also our determination that authorizing the use
of derivatives in connection with the new debt issuances is
appropriate in light of the value of risk mitigation in a
changing economy.

Accordingly, and as requested by the parties and Staff,

1.   Pursuant to RSA Chapter 369:1-4, the Commission finds
that the proposed issuance of not more than $50 million of
long term debt for the purposes of repayment of short term
debt and funding working capital needs, payable more than 12
months after the date thereof, subject to the following
terms and conditions, is consistent with the public good.

2.   On or for a period not exceeding twelve months
following the effective date of the Commission's order, PSNH
is authorized to obtain long term debt capital in aggregate
principal amount not to exceed $50 million through the
issuance and sale of its First Mortgage bonds or other
evidences of its indebtedness (including without limitation
unsecured debentures and promissory notes), with maturity
ranging from 2 to 30 years.

3.   The Company is authorized, pursuant to RSA 369:2, to
mortgage its properties and franchises in connection with
the issuance of not more than $50 million of long term debt,
in an amount equal or substantially similar in amount to the
amount of the long term debt issued by the Company, to
evidence and secure certain of the Company's repayment
obligations related to the long term debt and/or any
insurance policy securing the long term debt, with
principal, interest, payment and other related terms the
same as or substantially similar to those of the long term
debt.

4.   The Company is authorized to take all actions necessary
for and in connection with the issuance of such debt.

5.   PSNH is authorized to determine the precise amount and timin
g of the debt financing(s), the market in and the method by
which each is issued, the principal amounts and maturities
(within the range of 2 to 30 years), the terms and
provisions, price and interest rate (which may be fixed or
variable, or set by auction, remarketing or other rate
setting procedure) of the borrowing(s) and any securities
related thereto or issued in connection therewith.

6.   The Company is authorized to enter into interest rate
swaps, caps, collars, floors, treasury locks or other
similar derivative instruments in a notional amount not
exceeding $50 million to manage the interest rate risk
associated with the $50 million long term debt issuance.


Based upon the forgoing, it is hereby

ORDERED, that the petition of Public Service Company of New
Hampshire for additional financing authority, as limited and
conditioned by the Settlement Agreement described herein, is
hereby APPROVED.

By order of the Public Utilities Commission of New Hampshire
this twenty-first day of May, 2004.

____________________     ____________________   ____________________
Thomas  B. Getz          Susan S. Geiger        Graham J. Morrison
Chairman                 Commissioner           Commissioner

Attested by:

__________________________________
Debra A. Howland
Executive Director & Secretary

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<FN>

<FN1>  In general, a "derivative instrument" is a financial
obligation entered into as a hedge against the risks
associated with the interest rate in the underlying
instrument. The risks, in turn, arise out of the inability
to predict at the time of issuance what interest rates will
prevail in the market over the term of the underlying
instrument.

</FN>
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