1. (I) THE EXISTING FACILITIES INSTALLED GENERATING
CAPACITY AS OF JANUARY 1, 1999; OR

2. (II) THE GENERATING CAPACITY OF AN EXISTING
FACILITY TO BE INSTALLED UNDER A LEGALLY BINDING CONTRACT:

A. 1. EXECUTED ON OR BEFORE JANUARY 1, 1999; OR

B. 2. EXECUTED ON OR BEFORE SEPTEMBER 29, 1999, IF
THE COMMISSION, ON A CASE BY CASE REVIEW OF THE EVIDENCE, DETERMINES
THAT NEGOTIATIONS IN GOOD FAITH CONCERNING THE CONTRACT WERE ONGOING
AS OF JANUARY 1, 1999. 1999; OR

(II) ONLY THE FIRST 40 MEGAWATTS, ON A STATEWIDE BASIS, OF
THE AGGREGATE GENERATING CAPACITY OF ON SITE GENERATING FACILITIES MAY
QUALIFY UNDER SUBPARAGRAPH (1)2 B OF THIS PARAGRAPH.

3. (III) THE FIRST 500 KILOWATT HOURS PER MONTH OF
ANY ON-SITE GENERATED ELECTRICITY FACILITY:

A. 1. TO THE EXTENT OF THE FIRST 80 MEGAWATTS, ON A
STATEWIDE BASIS, OF THE AGGREGATE GENERATING CAPACITY OF ON-SITE
GENERATING FACILITIES; OR

B. 2. INSTALLED AFTER JANUARY 1, 2000 FROM FUEL
CELLS, PHOTOVOLTAICS, WIND MACHINES, OR MICROTURBINES WHICH HAVE
ENERGY CONVERSION EFFICIENCIES GREATER THAN 50%.

(B) THE COMMISSION SHALL DETERMINE THE TRANSITION COSTS AND THE
AMOUNTS OF THE TRANSITION COSTS THAT AN ELECTRIC COMPANY SHALL BE
PROVIDED AN OPPORTUNITY TO RECOVER UNDER ITS RESTRUCTURING PLAN
THROUGH THE COMPETITIVE TRANSITION CHARGE OR OTHER APPROPRIATE
MECHANISM.

(C) (1) AFTER JULY 1, 1999, AN ELECTRIC COMPANY MAY APPLY TO THE
COMMISSION FOR A QUALIFIED RATE ORDER FOR SOME OR ALL OF ITS TRANSITION
COSTS.

(2) IF THE COMMISSION ISSUES A QUALIFIED RATE ORDER AND THE
TRANSITION BONDS APPROVED BY THAT ORDER ARE SUCCESSFULLY ISSUED.

(I) THE ELECTRIC COMPANY SHALL IMPOSE AND COLLECT,
THROUGH ITS CUSTOMER BILLS, THE INTANGIBLE TRANSITION CHARGES APPROVED
BY THE QUALIFIED RATE ORDER; AND

(II) AT THE SAME TIME, THE ELECTRIC COMPANYS COMPETITIVE
TRANSITION CHARGE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THAT PORTION
OF THE COMPETITIVE TRANSITION CHARGE RELATED TO THE TRANSITION COSTS
FOR WHICH TRANSITION BONDS HAVE BEEN SUCCESSFULLY ISSUED, TOGETHER
WITH ANY COSTS OF CAPITAL RELATED TO THE TRANSITION COSTS FOR WHICH
RECOVERY WAS PROVIDED IN THE COMPETITIVE TRANSITION. CHARGE, AS
PROVIDED IN THE QUALIFIED RATE ORDER.