The Federal Energy Regulatory Commission set a hearing for a proposal by New England Power Co. to divest its generating assets and add a termination charge reflecting generation costs that will be stranded due to early service termination.
This move, made on Jan. 29, marks the first time the FERC will consider a case-specific proposal for dealing with stranded costs in the context of corporate restructuring proposals, as allowed by Order 888 (Docket No. ER96-2367).
NEP had filed a proposed amendment to its service agreement with its Massachusetts retail affiliates, Massachusetts Electric Co. and Nantucket Electric Co., which would eliminate the 7-year notice requirement for service termination, allowing for timely implementation of retail competition in Massachusetts. NEP's contract-termination charge would recover any generation-related costs not offset by sale of generation units and termination of contracts, under which NEP now buys power. NEP filed a similar amendment for its Rhode Island retail affiliate Narragansett Electric Co.