(Revised, February 13, 1998)

1. Purpose.

2. Definitions.

1. Affiliate has the same meaning as given in Part 161 of Section 161.2(a) of Part 161 of Title 18, Code of Federal Regulations.
2. Commission means the Federal Energy Regulatory Commission or any successor agency.
3. Employee means any employee of VELCO or any employee of any Affiliate who engages, while an employee of the Affiliate, in the Wholesale Merchant Function.
4. OASIS means an open access same-time information system operated in conformance with applicable rules and regulations of the Commission.
5. Transmission Customer means any eligible customer (or its designated agent) that can or does execute a transmission service agreement with VELCO or can or does receive transmission service from VELCO.
6. VELCO and the Company mean Vermont Electric Power Company, Inc.
7. Wholesale Merchant Function means the sale for resale of electric energy in interstate commerce.
8. Tariff means the open access tariff of VELCO, which VELCO filed pursuant to the Commission's Order No. 888 and which became effective on October 11, 1996.

3. Standards of conduct. VELCO will conduct its business to conform with the following standards:

1. General Rules.
2. 1. Except as provided in paragraph (a)(2) of this section, VELCO employees shall function independently of the employees of any of its Affiliates who engage in Wholesale Merchant Functions.
   2. Notwithstanding any other provisions in this section, in emergency circumstances affecting system reliability, VELCO may take whatever steps are necessary to keep the system in operation. The Company will report to the Commission and on the OASIS each emergency that resulted in any deviation from the standards of conduct, within twenty-four hours of such deviation.
3. Rules governing employee conduct.
4. 1. Prohibitions. No employees of any Affiliate, engaged in Wholesale Merchant Functions, shall conduct transmission system operations or reliability functions for or on behalf of VELCO, nor shall any such employee have access to the VELCO system control center or similar facilities used for transmission operations or reliability functions that differs in any way from the access available to other open access Transmission Customers.
   2. Transfers. Employees engaged in either Wholesale Merchant Functions or transmission system operations or reliability functions shall not be precluded from transferring between such functions as long as such transfer is not used as a means to circumvent these standards of conduct. Notices of any Employee transfer to or from transmission system operations or reliability functions will be posted on the OASIS as provided in Section 37.6(g)(3) of Part 37 of Title 18, Code of Federal Regulations. The information shall include the name of the transferring Employee, the respective titles held while performing each function, and the effective date of the transfer. The information posted under this section shall remain on the OASIS for ninety days.
   3. Information Access. Employees of any of the Company's Affiliates who are engaged in Wholesale Merchant Functions shall have access to only that information available to the Company's open access Transmission Customers (i.e., the information posted on the OASIS). Such Employees shall not have preferential access to any information about the VELCO's transmission system that is not available to all users of the OASIS, and they shall not be provided with information about VELCO's transmission system (including information about available transmission capability, price, curtailments, ancillary services, and the like) through access to information not posted on the OASIS that is not otherwise also available to the general public without restriction, or through information through the OASIS that is not also publicly available to all OASIS users.
   4. Disclosure.
   5. 1. No VELCO employee, and no employee of an Affiliate, engaged in transmission system operations or reliability functions, may disclose to employees of any of the Company's Affiliates who are engaged in Wholesale Merchant Functions, any information concerning VELCO's transmission system or the transmission system of another (including information received from non-Affiliates or information about available transmission capability, price, curtailments, ancillary services, etc.) through non-public communications conducted off the OASIS, through access to information not posted on the OASIS that is not at the same time available to the general public without restriction, or through information on the OASIS that is not at the same time publicly available to all OASIS users (such as E-mail).
      2. If any VELCO employee, engaged in transmission system operations or reliability functions, discloses information not posted on the OASIS, and in a manner contrary to the requirements of these standards of conduct, the Company shall immediately post such information on the OASIS.
      3. The Company shall not share any market information, acquired from nonaffiliated Transmission Customers or potential nonaffiliated Transmission Customers, or developed in the course of responding to requests for transmission or ancillary service on the OASIS, with employees of an Affiliate engaged in Wholesale Merchant Functions, except to the extent information is required to be posted on the OASIS in response to a request for transmission service or ancillary services.
      4. VELCO's facilities are maintained, and its transmission system/reliability function employees work, in buildings that are physically separate from those of its affiliates. Wholesale merchant function employees of its affiliates shall, with respect to access to transmission function areas and data, be subject to the same restrictions as members of the general public. When in the transmission function areas or where transmission data is kept, they shall be escorted by VELCO personnel and shall have no access to files to which they are not entitled. They shall not be given keys or combinations to the locks to buildings that contain transmission function areas, or to any of the rooms or storage facilities in which transmission data is kept.
      5. VELCO shall not provide transmission system information to any affiliate unless that affiliate has adopted standards of conduct that forbid access to transmission system information by the affiliate's employees engaged in the wholesale merchant function and unless the affiliate has adopted security measures that reasonably assure that such standards will not be intentionally or inadvertently breached.
   6. Implementing Tariffs.
   7. 1. Employees of the Company will strictly enforce all Tariff provisions relating to the sale or purchase of open access transmission service, if these provisions do not provide for the use of discretion.
      2. The Company will apply all Tariff provisions relating to the sale or purchase of open access transmission service in a fair and impartial manner that treats all customers (including any Affiliate) in a non-discriminatory manner, if these provisions involve discretion.
      3. The Company will keep a log, available for Commission audit, detailing the circumstances and manner in which it exercised its discretion under any terms of the Tariff.
      4. The Company will not, through its tariffs or otherwise, give preference to sales for resale by any Affiliate, over the interests of any other wholesale customer in matters relating to the sale or purchase of transmission service (including issues of price, curtailments, scheduling, priority, ancillary services, etc.).
      5. The Company will keep a log, available for Commission audit, detailing the circumstances and manner in which it exercised its discretion under any terms of the Tariff. The information contained in this log shall be posted on the OASIS as provided in Section 37.(g)(4) of Part 37 of Title 18, Code of Federal Regulations.
      6. Any offer of a discount for any transmission service made by the Company shall be announced to all potential customers solely by posting on the OASIS.
   8. Books and Records. The Company will maintain its books of account and records (as prescribed under Parts 101 and 125 of Title 18, Code of Federal Regulations) separately from those of its Affiliates, and such books of accounts and records will be available for Commission inspection.
   9. Maintenance of written procedures. The Company will file these Standards of Conduct with the Commission, will post the same on the NEPOOL JTSIN OASIS, and will maintain copies thereof at its offices at Pinnacle Ridge Avenue, Rutland, Vermont, which copies shall be available to the public for inspection or distribution during the Company's regular business hours.

4. Implementation.

1. Each employee of the Company engaged in transmission operations or reliability functions shall be provided with a copy of these Standards of Conduct, shall be instructed to become familiar with and to act in accordance with their provisions, and shall at all times have available the opportunity to consult with the employee's supervisor and with the Company's counsel regarding their meaning and application.
2. The Company shall distribute and explain these Standards of Conduct to the wholesale merchant function employees of each of its Affiliates.