Quickly responding to a complaint filed by Connecticut Attorney General Richard Blumenthal and the Connecticut Department of Public Utility Control (DPUC), FERC ordered NRG Power Marketing Inc. to continue providing service to Connecticut Light & Power Co. (CL&P) after NRG proposed canceling a power contract it had entered into with CL&P.

NRG Power Marketing on May 14 told CL&P that it wants to terminate a contract, effective May 19, under which NRG Power Marketing is obligated to supply 45% of CL&P’s standard offer service load requirement through the end of 2003 at an average cost of approximately 4.5 cents/kWh. CL&P is a subsidiary of Northeast Utilities.

NRG Power Marketing’s move came on the same day that its parent, NRG Energy, disclosed that the company and certain of its U.S. affiliates, including NRG Power Marketing, filed voluntary petitions for reorganization under the Bankruptcy Code in the Southern District of New York (see NGI, May 19).

Blumenthal and the DPUC subsequently asked FERC to prohibit NRG Power Marketing from terminating the contract until FERC can evaluate the public interest impacts of such a termination, as well as NRG Power Marketing’s claimed right to terminate.

FERC said that NRG Power Marketing’s proposal to terminate the contract on May 19 “leaves the Commission with insufficient time to evaluate its proposed action.” The Commission therefore directed NRG Power Marketing to continue providing service to CL&P pursuant to the rates, terms and conditions of the contract, until further notice.

FERC said that NRG Power Marketing has 10 days from the date of the order to respond to the complaint filed by Blumenthal and the DPUC.

Meanwhile, Fitch Ratings last Monday said that it has revised Northeast Utilities’ rating outlook to “Negative” from “Stable.” Northeast Utilities’ current senior unsecured rating is BBB.

Fitch said that the negative rating outlook reflects uncertainty as to who will bear the added costs of locational marginal pricing (LMP) in Connecticut and the potential default by NRG Power Marketing on the supply contract with CL&P. “While it is possible that some or all of these costs will ultimately be borne by Connecticut consumers, it is also possible that CL&P and its affiliate Select Energy will incur additional expenses from now through year-end 2003,” Fitch said.

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