Exhibit 10(b)(iv)
New England Power
A ▇▇▇▇ company
May 21, 1996
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
Granite State Energy, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CONFIRMATION LETTER
This letter shall confirm the agreement reached on May 21,
1996, between New England Power Company ("NEP") and Granite State
Energy, Inc. ("Buyer") regarding the sale/purchase of energy
under the following terms and conditions:
Buyer to purchase and receive; NEP to sell and deliver:
CONTRACT Exclusive, all-requirements service, as
QUANTITY: needed to support contracts between Buyer
and its retail customers.
DELIVERY (1) For service to retail customers served
POINT(S): by Granite State Electric Company, a point
or points on the NEP transmission system;
or
(2) For service to retail customers served
by Public Service Company of New Hampshire
("PSNH"), a point or points on the NEP
transmission system border with PSNH; or
(3) For service to retail customers served
by UNITIL/Concord, a point or points on the
NEP transmission system border with PSNH;
or
(4) For service to retail customers served
by UNITIL/Exeter&Hampton, a point or points
on the NEP transmission system border with
PSNH; or
(5) For service to retail customers served
by the New Hampshire Electric Cooperative,
Inc. ("NHEC") which are served off of the
PSNH transmission system, a point or points
on the PSNH transmission system border with
NHEC; or
(6) For service to retail customers served
by NHEC which are served off of the Central
Vermont Public Service Company ("CVPS")
transmission system, a point or points on
the CVPS transmission system border with
NHEC; or
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Granite State Energy, Inc.
Confirmation Letter
page 2
(7) For service to retail customers served
by NHEC which are served off of the NEP
transmission system, a point or points on
the NEP transmission system; or
(8) For service to retail customers served
by Connecticut Valley Electric Company
("CVEC"), a point or points on the CVPS
transmission system border with CVEC; or
(9) Such other points as otherwise agreed
between NEP and Buyer.
In the event that NHEC obtains transmission
service for its retail customers across the
PSNH transmission system then the Delivery
Point for point 5 above shall be a point or
points on the NEP transmission system
border with PSNH.
CONTRACT The Energy Charge Rate for energy delivered
PRICE: during On-Peak hours (as defined below)
shall be as follows:
June '96 - Oct '96: $26.00 per MWh
Nov '96 - May '97: $26.80 per MWh
June '97 - Oct '97: $24.55 per MWh
Nov '97 - May '98: $25.25 per MWh
The Energy Charge Rate for energy delivered
during Off-Peak hours (as defined below)
shall be as follows:
June '96 - Oct '96: $19.90 per MWh
Nov '96 - May '97: $21.00 per MWh
June '97 - Oct '97: $19.90 per MWh
Nov '97 - May '98: $19.55 per MWh
A Reservation Charge Rate of $2.50 per MWh
shall apply to each MWh delivered during
On-Peak and Off-Peak hours; provided,
however, that the Reservation Charge Rate
will be $1.25 per MWh, during periods when
NEP is the sole supplier of energy to
Buyer, should Buyer add language in a form
acceptable to NEP on Buyer's promotional
and/or billing materials indicating that
Granite State Energy, Inc.
Confirmation Letter
page 3
NEP is ▇▇▇▇▇'s supplier of energy for the
New Hampshire Pilot Program.
On-Peak hours shall be from 7:01 AM to
10:00 PM, Monday through Friday, excluding
holidays. All other hours shall be
considered Off-Peak hours.
The above Energy Charge Rates and
Reservation Charge Rates are applicable
only to (i) contracts between Buyer and its
retail customers which are executed on or
before July 15, 1996 and (ii) a maximum of
50 MW of hourly energy for such contracts.
Contracts between Buyer and its retail
customers which are executed after July 15,
1996 or which exceed the 50 MW limit will
be served under a separate agreement
between NEP and Buyer.
PERIOD OF For all sales from Buyer to its retail
DELIVERY: customers, commencing with the start of
service under the New Hampshire Retail
Pilot Program and ending upon the
termination of service under the New
Hampshire Retail Pilot Program.
Buyer may terminate service under this
Confirmation prior to June 1, 1997;
provided, however (i) Buyer provides NEP
with thirty days written notice prior to
such termination; (ii) following
termination, Buyer utilizes its own
own-load dispatch at NEPOOL to account for
its load and resources; (iii) NEP provides
100% of the energy and capacity needed to
meet Buyer's own-load requirements from
termination through May 31, 1997 ("Period
A"); and (iv) NEP provides a minimum of 50%
of the energy and capacity needed to meet
▇▇▇▇▇'s own-load requirements from June 1,
1997 through May 31, 1998 ("Period B"). The
rates and terms under which NEP will
provide such energy and capacity will be
established under separate agreement, such
agreement to be negotiated in good faith
between NEP and Buyer; provided, however
(i) the energy and reservation rates
Granite State Energy, Inc.
Confirmation Letter
page 4
rates during Period A shall not exceed the
rates contained in this Confirmation plus
any incremental costs incurred by NEP, if
any, to provide such service; (ii) the
reservation rates during Period B shall not
exceed the rate contained in this
Confirmation; and (iii) the average annual
energy rate during Period B shall not
exceed the following:
Energy Price = (A x Oil Price) + (B x Gas
Price) + C
where:
A, B are constants, expressed in million
Btu per MWh. "A" shall equal 4.74
during On-Peak hours and 1.76
during Off-Peak hours. "B" shall
equal 4.74 during On-Peak hours
and 1.76 during Off-Peak hours;
C is a constant, expressed in $ per
MWh, and shall equal 2.61 during
On-Peak hours and 10.22 during
Off-Peak hours;
Oil
Price is the average of the daily low
quotations for cargo delivery of
1.0% sulphur #6 residual fuel oil
into New York Harbor, as reported
during the billing period by
▇▇▇▇▇'▇ Market Scan, expressed in $
per million Btu; and
Gas
Price is the arithmetic average of the
daily settlement prices for the
last three days that the NYMEX
Contract for the month of delivery
trades, as reported in the Wall
Street Journal, expressed in $ per
million Btu. NYMEX Contract shall
mean the New York Mercantile
Exchange Natural Gas Futures
Contract as approved by the
Commodity Futures Trading
Commission for the purchase and
sale of natural gas at ▇▇▇▇▇ Hub.
Granite State Energy, Inc.
Confirmation Letter
page 5
OTHER: The following condition(s) precedent must
be satisfied prior to the effectiveness of
this Confirmation (i) Buyer and NEP have
obtained all necessary regulatory approvals
including, but not limited to, approvals
from the Securities and Exchange Commission
under the Public Utility Holding Company
Act and the Federal Energy Regulatory
Commission, and (ii) the start of service
from Buyer to its retail customers prior to
September 1, 1996.
For purposes of calculating the Energy and
Reservation Charges, the number of MWh's
delivered during On-Peak hours shall be
determined by summing all of the hourly
loads assigned to Buyer by the various
distribution companies during On-Peak hours
plus Buyer's allocation of transmission
losses, if any, which were provided by NEP.
For purposes of calculating the Energy and
Reservation Charges, the number of MWh's
delivered during Off-Peak hours shall be
determined by summing all of the hourly
loads assigned to Buyer by the various
distribution companies during Off-Peak
hours plus Buyer's allocation of
transmission losses, if any, which were
provided by NEP.
Buyer shall provide NEP with copies of all
of the load reports it receives from each
distribution company which indicate the
hourly loads assigned by each distribution
company to Buyer.
The Contract Price shown above does not
include any costs for transmission from
NEP's generation sources to the Delivery
Points. NEP will be responsible for making
any necessary transmission arrangements and
for supplying any losses from its
generation source(s) to the Delivery
Point(s). In addition to the above Energy
and Reservation Charges, Buyer shall
reimburse NEP for the costs incurred for
such transmission service.
Granite State Energy, Inc.
Confirmation Letter
page 6
Notwithstanding anything to the contrary herein, to the
extent that the costs incurred in delivering energy under this
Agreement later change due to the use of formula rates,
governmental order, or as a result of actions otherwise beyond
the reasonable control of NEP, NEP shall bill and Buyer shall pay
any such incremental costs incurred by NEP.
This Confirmation Letter is being provided pursuant to and in
accordance with the New England Power Company FERC Electric
Tariff Original Volume No. 5 Waiver and Service Agreement to
Implement Retail Sales Under New Hampshire Pilot Program filed
with the Federal Energy Regulatory Commission on April 16, 1996
in Docket No. ER96-1585-000, ("Agreement") between NEP and Buyer,
and constitutes part of and is subject to all of the terms and
provisions of such Agreement. Terms used but not defined herein
shall have the meanings ascribed to them in the Agreement.
Please confirm that the terms stated herein accurately
reflect the agreement reached NEP and Buyer by returning an
executed copy of this letter to ▇▇▇▇▇. Your response should
reflect the appropriate Party in your organization who has the
authority to enter into this Transaction.
GRANITE STATE ENERGY, INC.
s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
NEW ENGLAND POWER COMPANY
s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President