FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____ to _____
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
----------- ------------------------------------ ------------------
1-5324 NORTHEAST UTILITIES 04-2147929
(a Massachusetts voluntary association)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-0010
Telephone: (413) 785-5871
0-404 THE CONNECTICUT LIGHT AND POWER COMPANY 06-0303850
(a Connecticut corporation)
Selden Street
Berlin, Connecticut 06037-1616
Telephone: (203) 665-5000
1-6392 PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE 02-0181050
(a New Hampshire corporation)
1000 Elm Street
Manchester, New Hampshire 03105
Telephone: (603) 669-4000
0-7624 WESTERN MASSACHUSETTS ELECTRIC COMPANY 04-1961130
(a Massachusetts corporation)
174 Brush Hill Avenue
West Springfield, Massachusetts 01090-0010
Telephone: (413) 785-5871
33-43508 NORTH ATLANTIC ENERGY CORPORATION 06-1339460
(a New Hampshire corporation)
1000 Elm Street
Manchester, New Hampshire 03105
Telephone: (603) 669-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Registrant Title of Each Class On Which Registered
---------- -------------------- ---------------------
NORTHEAST UTILITIES Common Shares, $5.00 par value New York Stock
Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
Registrant Title of Class
---------- --------------
NORTHEAST UTILITIES Common Share Warrants, no par value, exercisable
at $ 24 per share
THE CONNECTICUT LIGHT Preferred Stock, par value $50.00 per share, issuable
AND POWER COMPANY in series, of which the following series are
outstanding:
$1.90 Series of 1947 4.96% Series of 1958
$2.00 Series of 1947 4.50% Series of 1963
$2.04 Series of 1949 5.28% Series of 1967
$2.20 Series of 1949 6.56% Series of 1968
3.90% Series of 1949 $3.24 Series G of 1968
$2.06 Series E of 1954 7.23% Series of 1992
$2.09 Series F of 1955 5.30% Series of 1993
4.50% Series of 1956
Class A Preferred Stock, par value $25.00 per share,
issuable in series, of which the following series are
outstanding:
9.00% Series of 1989
Dutch Auction Rate Transferable Securities,
1989 Series
PUBLIC SERVICE COMPANY Preferred Stock, par value $25.00 per share, issuable
OF NEW HAMPSHIRE in series, of which the following series are
outstanding:
10.60% Series A of 1991
WESTERN MASSACHUSETTS Preferred Stock, par value $100.00 per share,
ELECTRIC COMPANY issuable in series, of which the following series are
outstanding:
7.72% Series B of 1971
Class A Preferred Stock, par value $25.00 per share,
issuable in series, of which the following series are
outstanding:
7.60% Series of 1987
Dutch Auction Rate Transferable Securities,
1988 Series
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d)of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of NORTHEAST UTILITIES' Common Shares, $5.00 Par
Value, held by nonaffiliates, was $ 2,907,287,878, based on a closing sales
price of $ 23.375 per share for the 124,375,952 common shares outstanding on
February 28, 1994. NORTHEAST UTILITIES holds all of the 12,222,930 shares,
1,000 shares, 1,072,471 shares and 1,000 shares of the outstanding common
stock of THE CONNECTICUT LIGHT AND POWER COMPANY, PUBLIC SERVICE COMPANY OF
NEW HAMPSHIRE, WESTERN MASSACHUSETTS ELECTRIC COMPANY and NORTH ATLANTIC
ENERGY CORPORATION, respectively.
Documents Incorporated by Reference:
Part of Form 10-K
Into Which Document
Description is Incorporated
----------- --------------------
Portions of Annual Reports to Shareholders of the following
companies for the year ended December 31, 1993:
Northeast Utilities Part II
The Connecticut Light and Power Company Part II
Public Service Company of New Hampshire Part II
Western Massachusetts Electric Company Part II
North Atlantic Energy Corporation Part II
Portions of the Northeast Utilities Proxy
Statement dated April 1, 1994 Part III
NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTH ATLANTIC ENERGY CORPORATION
1993 Form 10-K Annual Report
Table of Contents
PART I
Page
Item 1. Business. . . . . . . . . . . . . . . . . . . 1
The Northeast Utilities System . . . . . . . . . . 1
Competition and Marketing. . . . . . . . . . . . . 2
Economic Development. . . . . . . . . . . . . 2
Business Retention/Business Recovery. . . . . 3
Competitive Generation. . . . . . . . . . . . 4
Retail Wheeling . . . . . . . . . . . . . . . 4
Fuel Switching/Electrotechnologies. . . . . . 5
Wholesale Marketing . . . . . . . . . . . . . 6
Rates. . . . . . . . . . . . . . . . . . . . . . . 7
Connecticut Retail Rates. . . . . . . . . . . 7
New Hampshire Retail Rates. . . . . . . . . . 12
Massachusetts Retail Rates. . . . . . . . . . 16
Wholesale Rates . . . . . . . . . . . . . . . 19
Resource Plans . . . . . . . . . . . . . . . . . . 21
Construction. . . . . . . . . . . . . . . . . 21
Future Needs. . . . . . . . . . . . . . . . . 22
Financing Program. . . . . . . . . . . . . . . . . 24
1993 Financings . . . . . . . . . . . . . . . 24
Financing Nuclear Fuel. . . . . . . . . . . . 25
1994 Financing Requirements . . . . . . . . . 26
1994 Financing Plans. . . . . . . . . . . . . 27
Financing Limitations . . . . . . . . . . . . 27
Electric Operations. . . . . . . . . . . . . . . . 30
Distribution and Load . . . . . . . . . . . . 30
Generation and Transmission . . . . . . . . . 33
Hydro-Quebec. . . . . . . . . . . . . . . . . 34
Fossil Fuels. . . . . . . . . . . . . . . . . 35
Nuclear Generation. . . . . . . . . . . . . . 37
i
Non-Utility Businesses . . . . . . . . . . . . . . 53
General . . . . . . . . . . . . . . . . . . . 53
Private Power Development . . . . . . . . . . 53
Energy Management Services. . . . . . . . . . 54
Regulatory and Environmental Matters . . . . . . . 55
Public Utility Regulation . . . . . . . . . . 55
NRC Nuclear Plant Licensing . . . . . . . . . 56
Environmental Regulation. . . . . . . . . . . 57
Electric and Magnetic Fields. . . . . . . . . 68
FERC Hydro Project Licensing. . . . . . . . . 69
Employees. . . . . . . . . . . . . . . . . . . . . 70
Item 2. Properties. . . . . . . . . . . . . . . . . . 72
Electric Properties. . . . . . . . . . . . . . . . 73
Franchises . . . . . . . . . . . . . . . . . . . . 78
Item 3. Legal Proceedings . . . . . . . . . . . . . . 80
Item 4. Submission of Matters to a Vote of Security
Holders (Fourth Quarter 1993) . . . . . . . . 85
PART II
Item 5. Market for Registrants' Common Equity and
Related Shareholder Matters . . . . . . . . . 87
Item 6. Selected Financial Data . . . . . . . . . . . 87
Item 7. Discussion and Analysis of Financial
Condition and Results of Operations . . . . . 87
Item 8. Financial Statements and Supplementary Data . 88
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . 89
ii
PART III
Item 10. Directors and Executive Officers of the
Registrants . . . . . . . . . . . . . . . . . 90
Item 11. Executive Compensation. . . . . . . . . . . . 94
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . 98
Item 13. Certain Relationships and Related
Transactions. . . . . . . . . . . . . . . . . 100
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . 101
iii
GLOSSARY OF TERMS
The following is a glossary of frequently used abbreviations
or acronyms that are found throughout this report:
COMPANIES
NU. . . . . . . . . . . . . . Northeast Utilities
CL&P . . . . . . . . . . . . The Connecticut Light and Power Company
Charter Oak . . . . . . . . . Charter Oak Energy, Inc.
WMECO . . . . . . . . . . . . Western Massachusetts Electric Company
HWP . . . . . . . . . . . . . Holyoke Water Power Company
NUSCO or the Service Company. Northeast Utilities Service Company
NNECO . . . . . . . . . . . . Northeast Nuclear Energy Company
NAEC. . . . . . . . . . . . . North Atlantic Energy Corporation
NAESCO or North Atlantic. . . North Atlantic Energy Service
Corporation
PSNH. . . . . . . . . . . . . Public Service Company of New Hampshire
RRR . . . . . . . . . . . . The Rocky River Realty Company
the System. . . . . . . . . . the Northeast Utilities System
CYAPC . . . . . . . . . . . . Connecticut Yankee Atomic Power Company
MYAPC . . . . . . . . . . . . Maine Yankee Atomic Power Company
VYNPC . . . . . . . . . . . . Vermont Yankee Nuclear Power
Corporation
YAEC. . . . . . . . . . . . . Yankee Atomic Electric Company
GENERATING UNITS
Millstone 1 . . . . . . . . . Millstone Unit No. 1, a 659.5-MW
nuclear electric generating unit
completed in 1970
Millstone 2 . . . . . . . . . Millstone Unit No. 2, an 862-MW
nuclear electric generating unit
completed in 1975
Millstone 3 . . . . . . . . . Millstone Unit No. 3, a 1,149-MW
nuclear electric generating unit
completed in 1986
Seabrook or Seabrook 1. . . . Seabrook Unit No. 1, a 1,150-MW
nuclear electric generating unit
completed in 1986. Seabrook 1 went
into service in 1990.
REGULATORS
DOE . . . . . . . . . . . . . U.S. Department of Energy
DPU . . . . . . . . . . . . . Massachusetts Department of Public
Utilities
DPUC. . . . . . . . . . . . . Connecticut Department of Public
Utility Control
iv
GLOSSARY OF TERMS
REGULATORS (Continued)
MDEP. . . . . . . . . . . . . Massachusetts Department of
Environmental Protection
CDEP. . . . . . . . . . . . . Connecticut Department of
Environmental Protection
EPA . . . . . . . . . . . . . U.S. Environmental Protection Agency
FASB. . . . . . . . . . . . . Financial Accounting Standards Board
FERC. . . . . . . . . . . . . Federal Energy Regulatory Commission
NHDES . . . . . . . . . . . . New Hampshire Department of
Environmental Services
NHPUC . . . . . . . . . . . . New Hampshire Public Utilities
Commission
NRC . . . . . . . . . . . . . Nuclear Regulatory Commission
SEC . . . . . . . . . . . . . Securities and Exchange Commission
OTHER
1935 Act. . . . . . . . . . . Public Utility Holding Company Act of
1935
AFUDC . . . . . . . . . . . . Allowance for funds used during
construction
CC. . . . . . . . . . . . . . Conservation charge
C&LM. . . . . . . . . . . . . Conservation and load management
CWIP. . . . . . . . . . . . . Construction work in progress
Energy Policy Act . . . . . . Energy Policy Act of 1992
FAC . . . . . . . . . . . . . Fossil-fuel adjustment clause
FPPAC . . . . . . . . . . . . Fuel and purchased power adjustment
clause (PSNH)
GUAC. . . . . . . . . . . . . Generation utilization adjustment
clause (CL&P)
IRM . . . . . . . . . . . . . Integrated resource management
MW. . . . . . . . . . . . . . Megawatt
NBFT. . . . . . . . . . . . . Niantic Bay Fuel Trust, lessor of
nuclear fuel used by CL&P and WMECO
NEPOOL. . . . . . . . . . . . New England Power Pool
NUG&T . . . . . . . . . . . . Northeast Utilities Generation and
Transmission Agreement
IPPs. . . . . . . . . . . . . Independent power producers
QFs . . . . . . . . . . . . . Qualifying cogeneration and small
power production facilities
ROE . . . . . . . . . . . . . Return on equity
v
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vii
NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
WESTERN MASSACHUSETTS ELECTRIC COMPANY
NORTH ATLANTIC ENERGY CORPORATION
PART I
ITEM 1. BUSINESS
THE NORTHEAST UTILITIES SYSTEM
Northeast Utilities (NU) is the parent company of the Northeast
Utilities system (the System). It is not itself an operating company.
Through four of NU's wholly-owned subsidiaries (The Connecticut Light and
Power Company [CL&P], Public Service Company of New Hampshire [PSNH], Western
Massachusetts Electric Company [WMECO] and Holyoke Water Power Company
[HWP]), the System furnishes electric service in Connecticut, New Hampshire
and western Massachusetts. In addition to their retail electric service,
CL&P, PSNH, WMECO and HWP (including its wholly-owned subsidiary Holyoke
Power and Electric Company) together furnish firm wholesale electric service
to eight municipalities and utilities. The System companies also supply
other wholesale electric services to various municipalities and other
utilities. NU serves about 30 percent of New England's electric needs and is
one of the 20 largest electric utility systems in the country.
NU acquired PSNH, the largest electric utility in New Hampshire, in
June 1992. PSNH was in bankruptcy reorganization proceedings from January
1988 to May 1991, when it emerged from bankruptcy in the first step of an NU-
sponsored two-step plan of reorganization. NU's acquisition of PSNH was the
second step of the reorganization plan. On October 1, 1993, the Bankruptcy
Court in New Hampshire formally terminated the bankruptcy proceeding. See
Item 3, Legal Proceedings. PSNH continues to operate its core electric
utility business, but pursuant to the reorganization plan, PSNH transferred
its 35.6 percent interest in the Seabrook nuclear generating facility
(Seabrook) in Seabrook, New Hampshire to North Atlantic Energy Corporation
(NAEC), a special purpose subsidiary of NU which sells the capacity and
output of that unit to PSNH under two life-of-unit, full cost recovery
contracts. In June 1992, NU's subsidiary North Atlantic Energy Service
Corporation (North Atlantic) assumed operational responsibility for Seabrook.
Before that, Seabrook had been operated by a division of PSNH.
Other wholly-owned subsidiaries of NU provide support services for
the System companies and, in some cases, for other New England utilities.
Northeast Utilities Service Company (NUSCO or the Service Company) provides
centralized accounting, administrative, data processing, engineering,
financial, legal, operational, planning, purchasing and other services to the
System companies. Northeast Nuclear Energy Company (NNECO) acts as agent for
the System companies and other New England utilities in operating nuclear
generating facilities in Connecticut. North Atlantic acts as agent for the
System companies and other New England utilities in operating Seabrook. Two
other subsidiaries construct, acquire or lease some of the property and
facilities used by the System companies.
NU has two other principal subsidiaries, Charter Oak Energy, Inc.
(Charter Oak) and HEC Inc. (HEC), which have non-utility businesses.
Directly and through subsidiaries, Charter Oak develops and invests in
cogeneration, small power production and independent power production
facilities. HEC provides energy management services for commercial,
industrial and institutional electric customers. See "Non-Utility
1
Businesses."
COMPETITION AND MARKETING
Competition within the electric utility industry is increasing. In
response, NU has developed, and is continuing to develop, a number of
initiatives to retain and continue to serve its existing customers and to
expand its retail and wholesale customer base. These initiatives are aimed
at keeping customers from either leaving NU's retail service territory or
replacing NU's electric service with alternative energy sources and at
attracting new customers. Management believes that CL&P, PSNH and WMECO must
continue to be responsive to their business customers, in particular, in
dealing with the price of electricity and to recognize that many business
customers have alternatives such as fuel switching, relocation and self-
generation if the price of electricity is not competitive.
A System-wide emphasis on improved customer service is a central
focus of the reorganization of NU that became effective on January 1, 1994.
The reorganization entails realignment of the System into two new core
business groups. The first core business group, the energy resources group,
is devoted to energy resource acquisition and wholesale marketing and focuses
on nuclear, fossil and hydroelectric generation, wholesale power marketing
and new business development. The second core business group, the retail
business group, oversees all customer service, transmission and distribution
operations and retail marketing in Connecticut, New Hampshire and
Massachusetts. These two core business groups are served by various support
functions known collectively as the corporate center. In connection with
NU's reorganization, the System has begun a corporate reengineering process
which should help it to identify opportunities to become more competitive
while improving customer service and maintaining a high level of operational
performance.
ECONOMIC DEVELOPMENT
The cost of doing business, including the price of electricity, is
higher in the System's service area, and the Northeast generally, than in
most other parts of the country. Relatively high state and local taxes,
labor costs and other costs of doing business in New England also contribute
to competitive disadvantages for many industrial and commercial customers of
CL&P, PSNH and WMECO. These disadvantages have aggravated the pressures on
business customers in the current weakened regional economy. As a result,
state and local governments in the region frequently offer incentives to
attract new business development to, and to expand existing businesses
within, their states. Since 1991, CL&P and WMECO have worked actively with
state and local economic development authorities to package incentives for a
variety of prospective or expanding customers. These economic development
packages typically include both electric rate discounts and incentive
payments for energy efficient construction, as well as technical support and
energy conservation services.
In general, electric rate discounts are phased out over varying
periods generally not in excess of ten years. From September 1991 through
March 1, 1994, economic development rate agreements had been reached with
approximately 45 industrial and commercial customers in the three states
served by the System, including 38 customers in CL&P's service territory, one
customer in PSNH's service territory and six customers in WMECO's service
territory.
2
As an adjunct to their economic development efforts, CL&P and WMECO
have also developed programs which provide incentives to customers planning
to construct or significantly renovate commercial or industrial buildings
within the System's service territory. Approximately 40 percent of all such
construction qualifies for incentive payments for the installation or
retrofitting of energy-efficient equipment designed to result in permanent
savings for the customer in addition to any savings that result from the rate
discounts.
The business expansion-related rate agreements cover small-to-
medium-sized industrial companies and a few medium-sized commercial business
relocations. In all cases where economic development rates are in effect,
the additional load and associated revenues, even though received under
discounted rates, result in a net benefit to the System by making a
contribution towards the System's fixed costs. During 1993, 28 customers
were on economic development rate riders, including 24 CL&P customers and
four WMECO customers. The net benefit to the System during 1993 as a result
of these agreements was approximately $300,000.
BUSINESS RETENTION/BUSINESS RECOVERY
From 1983 through 1989, the System's retail kilowatt-hour sales grew
by an annual average rate of 3.8 percent. Since the end of 1989, retail
sales have been level, except for the addition of PSNH's electric load as a
result of NU's acquisition of PSNH, effective in June 1992. The leveling
effect has resulted in part from the System's conservation and load
management (C&LM) efforts, but is largely due to the region's persistent weak
economy. Management expects a modest improvement in the economy in 1994 and
moderate electric sales growth is anticipated.
To spur economic activity, NU's subsidiaries have worked in concert
with state and local authorities to retain businesses that are considering
relocating outside of the NU service territory. C&LM incentives are used
with temporary rate reductions to produce both short-term and long-term cost
savings for customers. These reductions are generally limited to five years
but may be for as long as ten years. As of the end of 1993, 25 System
customers received such reductions, including 19 CL&P customers, two PSNH
customers and five WMECO customers. These customers in the aggregate
represented less than 0.5 percent of System revenues.
The NU operating subsidiaries also offer rate reductions to business
entities that can demonstrate that they are encountering financial problems
threatening their viability but have reasonable prospects for improvement.
These "business recovery" reductions can be brief in duration, sometimes
lasting only a few months, or may extend for up to five years. From the time
these rates became available in late 1991 through the end of 1993, 23 CL&P
customers, two PSNH customers and eight WMECO customers have been granted
such rate reductions. The CL&P customers provided approximately $10 million
in annual revenues; the PSNH customers provided approximately $10 million in
annual revenues and the WMECO customers provided approximately $1.5 million
in annual revenues.
The bulk of the cost of the presently estimated discounts has been
anticipated in base rates. The cost of the C&LM program is also collected
from ratepayers.
3
COMPETITIVE GENERATION
A growing source of competition in the electric utility industry
comes from companies that are marketing co-generation systems, primarily to
those customers who can use both the electricity and the steam created by
such systems. See "Regulatory and Environmental Matters - Public Utility
Regulation." For instance, the Pratt & Whitney Aircraft Division of United
Technologies Corporation, the System's largest industrial customer, put into
service a 25-megawatt generating system in January 1993, reducing CL&P's
industrial sales by approximately 1.5 percent, or $8 million, during 1993.
While only a few other such systems have been installed in the System's
service territory to date, the extent of growth of further self-generation
cannot be predicted.
To help convince retail customers not to generate their own power,
CL&P, PSNH and WMECO have offered a competitive generation rate or special
rate contracts that typically provide for up to ten years of rate reductions
in return for a commitment not to self-generate. Two of CL&P's largest
customers, together accounting for approximately $12 million of annual
revenues in 1993, are operating under these arrangements. The New Hampshire
Public Utilities Commission (NHPUC) also approved a special PSNH rate
available for operators of sawmills to help prevent those customers from
installing diesel generation. Altogether, approximately 28 System customers
were on some type of competitive generation rate or special contract at the
end of 1993, consisting of two CL&P customers, 20 PSNH customers and six
WMECO customers. The PSNH customers provided approximately $3 million in
annual revenues and the WMECO customers provided approximately $1.5 million
in annual revenues.
Overall, all types of flexible rate riders and special contracts
offered by the System have preserved System revenues of approximately $50
million. As each subsidiary intensifies its efforts to retain existing
customers and gain new customers, the number of customers covered under such
flexible rates, and the number and amount of overall discounts, are expected
to rise moderately over the next few years.
RETAIL WHEELING
In principle, retail wheeling would enable a retail customer to
select an electricity supplier and force the local electric utility to
transmit the power to the customer's site. While wholesale wheeling was
mandated by the Energy Policy Act of 1992 (Energy Policy Act) under certain
circumstances, retail wheeling is generally not required in any of the
System's jurisdictions. See "Regulatory and Environmental Matters - Public
Utility Regulation." In Connecticut, the Department of Public Utility
Control (DPUC) has begun an investigation into the desirability of retail
wheeling; a similar DPUC study undertaken in 1987 concluded that full-scale
ail wheeling was not in the public interest at that time. See
"Rates-Connecticut Retail Rates."
In New Hampshire, there have been no legislative proposals on full-
scale retail wheeling to date.
In Massachusetts, bills being reviewed by legislative committees
could permit limited retail wheeling in economically distressed areas and to
municipal and state-owned facilities.
4
FUEL SWITCHING/ELECTROTECHNOLOGIES
A customer's ability to switch to or from electricity as an energy
source for heating, cooling or industrial processes (fuel switching) will
continue to provide the System with both opportunities and risks over the
coming years.
While it is an important load, residential electric space heating
makes up only five percent of the System's retail sales. In Connecticut and
Massachusetts, the risk of fuel switching among residential customers is
concentrated in the area of electric to natural gas conversions with lesser
risks of oil and propane conversions, while in New Hampshire, conversions to
oil and propane are more common. During 1993, approximately three percent
of WMECO and PSNH space heating customers converted their heating systems
from electric resistance or baseboard heating. Conversion activity in CL&P's
service territory was minimal during 1993 and the net number of electric
space heating customers in CL&P's territory increased during 1993. Since
1992, space heating conversions on the System have not represented more
than a 0.1 percent loss of annual retail sales. Nonetheless, the System
operating companies have implemented a number of programs to mitigate these
losses. In New Hampshire, a new thermal energy storage program is being
reviewed for approval by the NHPUC. In Connecticut and Massachusetts,
programs are in place to encourage the use of ground source and advanced
air-to-air heat pumps in both new and existing construction. In addition, in
1993 WMECO lowered rates for its electric space heating cusomters by
approximately five percent with permission from the Massachusetts Department
of Public Utilities (DPU) to address the competitive threat. Because of
these programs and other initiatives, NU forecasts a continued increase in
the net number of electric space heating customers.
With respect to residential sales, central air conditioning
continues to become more common in the System's service territory. The
System has also begun to test the use of electric vehicles in all three of
its service territories and is working to promote the manufacture of electric
vehicles and their components in the System's service area. The System's
energy conservation programs which target electric heat and hot water
customers can be effective in lowering electric bills substantially. In
1993, the System embarked upon two aggressive field testing programs
involving heat pumps to provide residential heating, cooling and hot water
heating in cost effective ways. These programs, in Massachusetts and at
Heritage Village in Southbury, Connecticut, are intended to demonstrate that
the combination of cost effective conservation and the use of heat pumps will
provide lower cost heating, cooling and water heating than other available
fuels.
The System also faces commercial load loss because of fuel
switching, such as in the area of electrically heated commercial buildings.
Additionally, natural gas distribution companies have been actively marketing
gas-fired chillers to commercial and industrial customers. Electric space
and hot water heating and air conditioning have come under increasing
pressure in recent years from aggressive campaigns by natural gas
distribution companies seeking to add new customers. In Connecticut and
Massachusetts, NU's subsidiaries have initiated market driven heating,
ventilating and air-conditioning (HVAC) incentive programs, which include
some design assistance, to promote efficient, nonchlorofluorocarbon
refrigerant electric chillers.
In response to the threat of load loss due to alternative fuel
sources, the System's marketing and customer service staff works proactively
to compare relative costs of alternative fuels. In most instances, accurate
5
cost comparisons and energy conservation programs allow the System to
preserve most of each customer's load by assisting the customer to achieve a
more efficient use of its electric energy.
WHOLESALE MARKETING
In general and subject to existing contractual restrictions, the
System's wholesale customers, both within and outside the System's retail
service area, are free to select any supplier they choose. NU's subsidiaries
do not have an exclusive franchise right to serve such customers. Thus, the
wholesale segment of the System's business is highly competitive.
As a result of very limited load growth throughout the Northeast in
the past five years and the operation of several new generating plants,
competition has grown, and a seller's market for electricity has turned into
a buyer's market. Of the approximately 2,000 - 3,000 megawatts of surplus
capacity in New England, the System's total is approximately 1,000 megawatts.
The prices the System has been able to receive for new wholesale contracts
have generally been far lower than the prices prevalent in recent years.
Nevertheless, in 1993, the System sold a monthly average of 350
megawatts on a daily and short-term basis and 1,150 megawatts under
preexisting long-term commitments of capacity to over 20 utilities throughout
the Northeast. These sales resulted in approximately $150 million of
capacity revenues. The majority of these revenues have been recognized in
System company base rates.
In addition, System companies entered into approximately 11 long-
term sales contracts in 1993 with both new and existing customers. These
contracts are expected to increase sales by a yearly average of 60 megawatts
from late 1993 through 2005. The new wholesale customers include the
municipal electric systems in Georgetown, Middletown, South Hadley,
Princeton, Danvers, Littleton and Mansfield, all in Massachusetts. Including
these new sales, the System currently has capacity sales commitments with
other New England utilities to sell an aggregate 4,000 megawatt-years of
capacity from 1994 through 2008. The net benefits after costs from these
sales are estimated at approximately $550 million over the remaining life of
the contracts. Most of these benefits will be realized over the next few
years. In addition, a contract for the sale of approximately 450 megawatt-
years to the municipal electric system in Madison, Maine has been signed and
is awaiting certain approvals. For information on competitive pressures
affecting wholesale transmission, see "Electric Operations - Generation and
Transmission."
Over the next five years, intense competition in the Northeast
market is expected to continue as new generating facilities, located for the
most part outside the System's retail service areas and contracted to sell to
others, become operational. See "Regulatory and Environmental Matters -
Public Utility Regulation." This increase in power supply sources could put
further downward pressure on prices, but the potential price decreases may be
somewhat offset by an improvement in the region's economy and the retirement
of a number of the region's existing generating plants. See "Electric
Operations - Generation and Transmission."
6
SUMMARY
To date, the System has not been materially affected by competition,
and it does not foresee substantial adverse effect in the near future unless
the current regulatory structure or practice is substantially altered. The
rate, service, business development and conservation initiatives described
above, portions of which are funded in base rates, plus other cost
containment efforts described below, have been adequate to date in retaining
customers, preventing fuel switching and attracting new customers at a level
sufficient to maintain the System's revenue and profit base and should have
significant positive effects in the next few years. As noted above, however,
the DPUC has begun a retail wheeling investigation in Connecticut, and its
outcome is uncertain at this time. In Massachusetts, retail wheeling
legislation is under consideration. To date, no such initiatives are
underway in New Hampshire. NU's subsidiaries benefit from a diverse retail
base, and the System has no significant dependance on any one customer or
industry. The System's extensive transmission facilities and diversified
generating capacity position it to be a strong factor in the regional
wholesale power market for the foreseeable future. The System's wholesale
power business should further cushion the financial effects of competitive
inroads within its service area. The System believes that the corporate
reengineering process initiated in early 1994 and structural reorganization
effective January 1, 1994 should better position it to compete in the retail
and wholesale electric businesses in the future.
RATES
CONNECTICUT RETAIL RATES
GENERAL
CL&P's retail electric rate schedules are subject to the jurisdiction of
the DPUC. Connecticut law provides that increased rates may not be put into
effect without the prior approval of the DPUC, which has 150 days to act upon
a proposed rate increase, with one 30-day extension possible. If the DPUC
does not act within that period, the proposed rates may be put into effect
subject to refund.
Connecticut law authorizes the DPUC to order a rate reduction before
holding a full-scale rate proceeding if it finds that (i) a utility's
earnings exceed authorized levels by one percentage point or more for six
consecutive months, (ii) tax law changes significantly increase the utility's
profits, or (iii) the utility may be collecting rates that are more than just
and reasonable. The law requires the DPUC to give notice to the utility and
any customers affected by the interim decrease. The utility would be
afforded a hearing. If final rates set after a full rate proceeding or court
appeal are higher, customers would be surcharged to make up the difference.
1992-1993 CL&P RETAIL RATE CASE
In December 1992, CL&P filed an application for rate relief with the
DPUC. The updated request sought to increase CL&P's revenues by $344 million
or 15.4 percent in total over three years. That increase incorporated
requested annual increases of $130 million, $104 million and $110 million
starting in May 1993. As an alternative to the multi-year plan, CL&P also
proposed a one-time increase totaling about $280 million, or 13.9 percent.
7
On June 16, 1993, the DPUC issued a decision (Decision) approving
the multi-year plan and providing for annual rate increases of $46.0 million,
or 2.01 percent, in July 1993, $47.1 million, or 2.04 percent, in July 1994
and $48.2 million, or 2.06 percent, in July 1995. The total increase granted
of $141.3 million, or 6.11 percent, is approximately 42 percent of CL&P's
updated request.
In light of the State of Connecticut's concern over economic
development and industrial and commercial rates, one important aspect of the
Decision was that industrial and manufacturing rates will rise only about 1.1
percent anually over the three-year period.
Other significant aspects of the Decision include the reduction of
CL&P's return on equity (ROE) from 12.9 percent (CL&P had sought to continue
its ROE at that level) to 11.5 percent for the first year of the multi-year
plan, 11.6 percent for the second year and 11.7 percent for the third year;
recognition in CL&P's rates, by 1998, of non-pension, post-retirement benefit
cost accruals required under Statement of Financial Accounting Standards
(SFAS) No. 106; the identification of $49 million of prior fuel
overrecoveries and the use of that amount to offset a similar amount of the
unrecovered balance in CL&P's generation utilization adjustment clause
(GUAC); the reduction of CL&P's projected operating and maintenance expense
for contingency funding by approximately $53.6 million spread over three
years; and the deferral of cogeneration expenses projected for 1994 and 1995
and the future recovery of those deferred amounts (approximately $63 million
in total) plus carrying costs over five years beginning July 1, 1996.
The Decision also required CL&P to allocate to customers $10 million
of after tax earnings from a $47.7 million property tax accounting change
made in the first quarter of 1993. CL&P recorded this $10 million adjustment
as a reduction to second quarter net income.
On August 2, 1993, two appeals were filed from the Decision. CL&P
filed an appeal on four issues. The second appeal was filed by the
Connecticut Office of Consumer Counsel (OCC) and the City of Hartford,
challenging the legality of the multi-year plan approved by the DPUC. The
two appeals were consolidated. CL&P moved to dismiss the appeal by the City
of Hartford and the OCC on jurisdictional grounds. Oral arguments were held
on October 15, 1993 and February 14, 1994 on CL&P's motion to dismiss the
appeals challenging the multi-year rate plan. It is not known when a
decision on CL&P's motion will be issued. In addition, the Court rejected
(without prejudice to renewal) the City of Hartford's and the OCC's motion to
stay implementation of the second and third year of the rate plan pending the
outcome of their appeal. The City of Hartford and the OCC could renew a
request for a stay following the outcome of their appeal.
CL&P ADJUSTMENT CLAUSES
CL&P has a fossil fuel adjustment clause and a GUAC applicable to its
retail electric rates. In Connecticut, the DPUC is required to approve each
month the charges or credits proposed for the following month under the
fossil fuel adjustment clause. These charges and credits are designed to
recover or refund changes in purchased power (energy) and fossil fuel prices
from those set in base rates. Monthly fossil fuel charges or credits are
also subject to review and appropriate adjustment by the DPUC each quarter
after full public hearings. The Connecticut clause allows CL&P to recover
substantially all prudently incurred fossil fuel expenses.
CL&P's current retail electric base rate schedules assume that the
nuclear units in which CL&P has entitlements will operate at a 72 percent
8
composite capacity factor. The GUAC levels the effect on rates of fuel costs
incurred or avoided due to variations in nuclear generation above and below
that performance level. When actual nuclear performance is above the
specified level, net fuel costs are lower than the costs reflected in base
rates, and when nuclear performance is below the specified level, net fuel
costs are higher than the costs reflected in base rates. At the end of a
twelve-month period ending July 31 of each year, with DPUC approval, these
net variations from the costs reflected in base rates are generally refunded
to or collected from customers over the subsequent eleven-month period
beginning September 1. This clause, however, does not permit automatic
collection from customers to the extent the capacity factor is less than 55
percent for the twelve-month period. When and to the extent the annual
nuclear capacity factor is less than 55 percent, it is necessary for CL&P to
apply to the DPUC for permission to recover the additional fuel expense.
In the Decision, the DPUC disallowed recovery of $41.5 million, the
GUAC deferral balance associated with operation at a nuclear capacity factor
below 55 percent during the 12-month GUAC period ending July 31, 1992. In
the same Decision, the DPUC also disallowed $7.5 million of the $96 million
deferral balance, representing operation at a nuclear capacity factor above
55 percent for that period, which had already been approved for collection
from customers through December 31, 1993. The reason given for the
disallowances was CL&P's $49 million overrecovery of fuel costs through base
rates and the fuel adjustment clauses for the period August 1991 to July
1992.
The Decision also cut short the previously allowed recovery of
$96 million in GUAC deferrals by four months. The DPUC ordered the remaining
unrecovered GUAC balance of $24.6 million to be "trued-up" against the
deferral for the 1992-93 GUAC year. As result of two previous prudence
decisions imposing disallowances for outages at the nuclear unit (CY)
operated by the Connecticut Yankee Atomic Power Company (CYAPC) and
Millstone I, the DPUC also ordered CL&P to refund to customers a total of
$5.1 million in the GUAC billing period beginning September 1, 1993.
In the most recent GUAC period, which ended July 31, 1993, the
actual level of nuclear generating performance was 72.6 percent, resulting in
a GUAC deferral of $4.0 million to be credited to customers beginning in
September 1993. The GUAC rate filed by CL&P for the September 1993 - August
1994 GUAC billing period had five components: the $7.5 million disallowance
from the rate case, the $5.1 million of prudence disallowances, the $4.0
million credit deferral for the most recent GUAC period, and the $24.6
million debit of previously unrecovered GUAC deferrals, for a total of $7.9
million.
On September 1, 1993, the DPUC issued an interim order setting a
GUAC rate of zero beginning September 1, 1993, subject to a proceeding to
consider further CL&P's GUAC rate for the period September 1, 1993 to July
31, 1994. On January 5, 1994, the DPUC issued a decision fixing the GUAC
rate at zero through August 31, 1994 and disallowing recovery of $7.9 million
through the GUAC. The disallowance was based on a comparison of fuel
revenues with fuel expenses, in the August 1992 - July 1993 period. On
January 24, 1994, CL&P requested the DPUC to clarify its January 5, 1994
decision with respect to future application of the GUAC. Based on
management's interpretation of the January 5, 1994 decision, CL&P does not
expect that any future DPUC review using this methodology will have a
material adverse impact on its future earnings. On March 4, 1994, CL&P
appealed the January 5 GUAC decision to Connecticut Superior Court.
9
For the 1984-1991 GUAC periods, CL&P refunded more than $112 million
to its customers through the GUAC mechanism. For the five months ended
December 31, 1993, the composite nuclear generation capacity factor was 66.7
percent. For the full twelve-month period ending July 31, 1994, the factor
is projected to be approximately 74.7 percent.
The DPUC has opened a docket to review the prudence of the 1992 outage
related to the Millstone 2 steam generator replacement project. Discovery and
filing of testimony is expected to continue through May 1994 and hearings, if
required, will be held in the summer of 1994.
CL&P incurred approximately $88 million in replacement power costs
associated with Millstone outages that occurred during the period October
1990 - February 1992. These outages were the subject of several separate
prudence reviews conducted by the DPUC, three of which are either on appeal
or still pending at the DPUC.
On May 19, 1993, the DPUC issued a final decision allowing recovery
of costs related to the July 1991 shutdown of Millstone 3 caused by mussel-
fouling of the heat exchangers. Approximately $0.9 million of replacement
power costs are at issue. The OCC has appealed that decision to the
Connecticut Superior Court.
On September 1, 1993, the DPUC issued a final decision in the
prudence investigation of outages at all four Connecticut nuclear plants
resulting from an erosion/corrosion-induced pipe rupture at Millstone 2 on
November 6, 1991. The decision concluded that CL&P's management of its
erosion/corrosion program was reasonable and prudent and that expenses
incurred as a result of the outages, which total approximately $65 million
($51 million of which represents replacement power costs) for CL&P, should be
allowed. The OCC has also appealed this decision to the Connecticut Superior
Court.
The third ongoing prudence investigation involves a Millstone 3
outage caused by repairs to the service water piping in the fall of 1991.
The OCC's witness filed testimony that, as a result of the DPUC's decision
finding that the concurrent mussel-fouling outage was prudent, and the fact
that the mussel-fouling outage continued at least as long as the service
water outage, there was no economic impact on ratepayers from the service
water outage. On September 23, 1993, the DPUC suspended the service water
docket pending the outcome of OCC's appeal of the decision on the mussel-
fouling outage. Approximately $26 million of replacement power costs are at
issue. For further information on the shutdowns of Millstone units currently
under review by the DPUC, see "Electric Operations -- Nuclear Generation --
Millstone Units."
Some portion of the replacement power costs reflected in the three
Millstone outages, as to which the DPUC has not completed its review or as to
which the DPUC's decision has been appealed, may be disallowed. However,
management believes that its actions with respect to these outages have been
prudent, and it does not expect the outcome of the prudence reviews to result
in material disallowances.
CL&P has recognized that it will not recover in rates approximately
$9.4 million in replacement power costs resulting from two other shutdowns at
Millstone 1: one related to the unit's licensed operators failing
requalification exams and the other related to seaweed blockage at the intake
structure.
10
CL&P owns 34.5 percent of the common stock of CYAPC, a regional nuclear
generating company. During the 1987-1988 refueling outage, repairs were made
to CY's thermal shield. During an extended 1989-1990 refueling outage, the
thermal shield was removed due to continued degradation.
The DPUC reviewed these outages. In a report issued in 1990, the
DPUC's auditors concluded that the actions of CYAPC's personnel and its
contractors were reasonable with respect to the thermal shield's repair and
removal. However, the auditors also concluded that the failure to clean the
entire refueling cavity during the 1987-1988 outage was the most likely cause
of debris left in the cavity that subsequently resulted in the additional
damage that was repaired during the 1989-1990 outage.
In October 1992, the DPUC disallowed CL&P's recovery of $3 million
in replacement power costs and $230,000 of related operating and maintenance
costs resulting from CY's 1989-1990 extended outage. CL&P appealed the
DPUC's decision. On December 2, 1993, the Connecticut Superior Court issued
a decision reversing the DPUC, in part, and upholding it in part. The court
ruled in favor of CL&P by reversing the $230,000 disallowance and in favor of
the DPUC by upholding the $3 million disallowance of replacement power costs.
The partial reversal in favor of CL&P was based on the principle of
federal preemption and is an important legal precedent for future CYAPC
matters.
CONSERVATION AND LOAD MANAGEMENT
CL&P participates in a collaborative process for the development and
implementation of C&LM programs for its residential, commercial and
industrial customers.
In September 1992, the DPUC approved a Conservation Adjustment
Mechanism (CAM) that allows CL&P to recover C&LM costs to the extent not
recovered through current base rates. The CAM authorized continued recovery
of C&LM costs over a ten-year period with a return on the unrecovered costs.
In December 1992, CL&P filed an application with the DPUC for approval of
budgeted C&LM expenditures for 1993 of $47.5 million and a proposed CAM for
1993. On April 14, 1993, the DPUC issued an order approving a new CAM rate,
which allows CL&P to recover $24 million of its budgeted $47 million C&LM
expenditures during 1993 and associated true-ups of past C&LM expenditures.
The order also provided that any unrecovered expenditures would be recovered
over eight years. CL&P's actual 1993 C&LM expenditures were approximately
$42.8 million. The unrecovered C&LM costs at December 31, 1993 excluding
carrying costs were $116.2 million.
On December 30, 1993, CL&P and the other participants in the
collaborative process filed an offer of settlement with the DPUC regarding
CL&P's 1994 C&LM expenditures, program designs, performance incentive and
lost fixed cost revenue recovery. The settlement proposed a budget level of
$39 million for 1994 C&LM and a reduction in the amortization period for new
expenditures from eight to 3.85 years. CL&P expects additional 1994 C&LM
expenditures of approximately $1 million for state facilities. The DPUC
began hearings on the proposed settlement during March 1994.
11
NEW HAMPSHIRE RETAIL RATES
RATE AGREEMENT AND FPPAC
NU acquired PSNH, the largest electric utility in New Hampshire, in
June 1992. See "The Northeast Utilities System." PSNH's 1989 Rate Agreement
(Rate Agreement) provides the financial basis for the plan under which PSNH
was reorganized and became an NU subsidiary. The Rate Agreement sets out a
comprehensive plan of retail rates for PSNH, providing for seven base rate
increases of 5.5 percent per year and a comprehensive fuel and purchased
power adjustment clause (FPPAC). The first of these base retail rate
increases was put into effect in January 1990. The second rate increase took
place on May 16, 1991, when PSNH reorganized as an interim, stand-alone
company; the third rate increase occurred on June 1, 1992, just before NU's
acquisition of PSNH; and the fourth rate increase went into effect on June 1,
1993. The remaining three increases are to be placed in effect by the NHPUC
annually beginning June 1, 1994, concurrently with a semi-annual adjustment
in the FPPAC.
The Rate Agreement also provides for the recovery by PSNH through
rates of a regulatory asset, which is the aggregate value placed by PSNH's
reorganization plan on PSNH's assets in excess of the net book value of
PSNH's non-Seabrook assets and the value assigned to Seabrook. In accordance
with the Rate Agreement, approximately $265 million of the remaining
regulatory asset is scheduled to be amortized and recovered through rates by
1998, and the remaining amount, approximately $504 million, is scheduled to
be amortized and recovered through rates by 2011. PSNH is entitled to a
return each year on the unamortized portion of the asset. The unrecovered
balance of the regulatory asset at December 31, 1993 was approximately
$769.5 million. In order to provide protection from significant variations
from the costs assumed in the base rates over the period of the seven base
rate increases (Fixed Rate Period), the Rate Agreement established a return
on equity (ROE) collar to prevent PSNH from earning an ROE in excess of an
upper limit or below a lower limit. To date, PSNH's ROE has been within the
limits of the ROE collar.
The FPPAC provides for the recovery or refund by PSNH, for the ten-
year period beginning on May 16, 1991, of the difference between the actual
prudent energy and purchased power costs and the costs included in base
rates. The rate is calculated for a six-month period based on forecasted
data and is reconciled to actual data in subsequent FPPAC billing periods.
PSNH costs included in the FPPAC calculation are the cost of fuel used at its
generating plants and purchased power, energy savings and support payments
associated with PSNH's participation in the Hydro-Quebec arrangements, the
Seabrook Power Contract costs billed to PSNH from NAEC, NEPOOL Interchange
expense and savings, fifty percent of the joint dispatch energy expense
savings resulting from the combination of PSNH and the System companies as a
single pool participant, purchased capacity costs associated with other
System power and unit contract capacity purchases excluding the Yankee
nuclear companies and the cost to amortize capital expenditures for, and to
operate, environmental or safety backfits or fuel switching. The FPPAC also
provides for the recovery of a portion of the payments made currently to
qualifying facilities and a portion of the costs associated with the PSNH
buyback of the New Hampshire Electric Cooperative, Inc. (NHEC) entitlement in
Seabrook. For information on NHEC's 1991 filing for bankruptcy and its
subsequent reorganization, see "Rates - Wholesale Rates." The balance of the
current payments to qualifying facilities, representing a part of the
payments made currently to eight specific small power producers (SPPs), are
deferred each year and amortized and recovered over the succeeding ten years.
12
A portion of the current payments to NHEC is also deferred and will be
recovered either through the FPPAC during the fixed rate period or through
base rates after the fixed rate period. Recovery of the NHEC deferral
through the FPPAC occurs only if the FPPAC rate is negative; in such
instance, deferred NHEC costs would be recovered to the extent required to
bring the FPPAC rate to zero. From June to November 1992, the FPPAC rate,
which would otherwise have been negative, was set at zero, and some NHEC
deferrals were amortized. The operation of the FPPAC during this period
resulted in an overrecovery, which was also netted against NHEC deferrals in
December 1992 and March 1993. As of December 31, 1993, SPP and NHEC
deferrals totaled approximately $107.6 and $14.8 million, respectively.
Under the Rate Agreement, PSNH has an obligation to use its best
efforts to renegotiate the purchase power arrangements with 13 specified SPPs
that were selling their output to PSNH under long term rate orders.
Agreements have been reached with all five of the hydroelectric facilities
under which the rates PSNH pays for their output would be reduced but the
term of years for sales from the hydro producers would be extended by five
years. The NHPUC held a hearing concerning these agreements on February 25,
1994. PSNH has also reached agreements with three of the eight wood-fired
qualifying facilities with long term rate orders. Under each agreement, PSNH
would pay each operator a lump sum in exchange for canceling the operator's
right to sell its output to PSNH under rate orders. The total payment to the
three operators would be approximately $91.8 million (covering approximately
35 MW of capacity). The three wood operators' agreements will be considered
in hearings before the NHPUC in late spring 1994. PSNH is unable to predict
if any or all of these agreements will be consummated.
Although the Rate Agreement provides an unusually high degree of
certainty about PSNH's future retail rates, it also entails a risk if sales
are lower than anticipated, as they were in 1991 and 1992, or if PSNH should
experience unexpected increases in its costs other than those for fuel and
purchased power, since PSNH has agreed that it will not seek additional rate
relief before 1997, except in limited circumstances. Even if allowed under
the Rate Agreement, any additional increases above 5.5 percent per year are
subject to political and economic pressures that tend to limit overall retail
rate increases, including FPPAC increases.
In accordance with the Rate Agreement, PSNH increased its average
retail electric rates by about 4.5 percent in June 1993 and by 1.8 percent on
December 1, 1993. The 4.5 percent increase in June resulted from the
combined effect of decreasing to $.00110 per kilowatthour the FPPAC charge at
the same time that (1) the fourth of the seven increases in base electric
rates of 5.5 percent and (2) a temporary increase associated with recently
enacted legislation associated with the settlement of the Seabrook tax suit
described below took effect. The decrease in the FPPAC charge also reflected
lower costs paid by PSNH through the Seabrook Power Contract for Seabrook
property tax imposed on NAEC. The December 1993 increase resulted from an
increase in the FPPAC rate.
In its decision on the June 1, 1993 increase, the NHPUC disallowed
replacement power costs for three Seabrook outages totalling about $0.4
million. On August 16, 1993, the NHPUC affirmed its decision to disallow
that amount. In the August 16 decision, the NHPUC also rejected a request by
the New Hampshire Office of Consumer Advocate (OCA) to allow access to
certain confidential, self-critical documents generated at Seabrook station
by plant personnel following outages and power reductions. PSNH has been
providing summary analyses of the circumstances surrounding outages; however,
it declined to provide the original self-critical documents in an effort to
13
maintain an atmosphere in which employees would be encouraged to report and
comment on all possible problems. The OCA filed an appeal of the NHPUC's
decision on its request for access to these documents with the New Hampshire
Supreme Court on November 16, 1993. On February 8, 1994, the court accepted
the appeal.
On September 14, 1993, PSNH filed a request for an increase in its
FPPAC rate for the period December 1, 1993 through May 31, 1994. The
increase of one percent of the average retail rate was expected to produce
less than the revenues necessary to cover PSNH's FPPAC costs over these six
months, a period during which Seabrook will undergo a two-month refueling
outage. PSNH waived its right to immediate collection and proposed to defer
about $13 million of FPPAC costs for later collection in order to limit its
total rate increases for 1993 to 5.5 percent. Hearings on the FPPAC rate
request were held on November 9 and 10, 1993. On November 29, 1993, the
NHPUC approved a higher FPPAC rate than the rate requested by PSNH. The
increase was 1.8 percent higher than rates previously in effect and allowed
PSNH to recover a deferral of $10.5 million over a twelve month period
beginning June 1, 1994, which ends prior to the next scheduled Seabrook
refueling outage.
In its June 1992 decision concerning PSNH's FPPAC rate, the NHPUC
had determined that PSNH should not be entitled to recover approximately $1.3
million with respect to wholesale power agreements with two New England
utilities. Also, the NHPUC had questioned the prudence of a series of short
term contractual agreements (SWAP Agreements) for energy and capacity
exchanges entered into between the System and PSNH prior to the merger and
the allocation of savings resulting from the SWAP Agreements. In November
1992, PSNH entered into proposed settlements with the NHPUC staff and the OCA
to settle these issues. The settlements proposed disallowances of
approximately $500,000 for the two wholesale power agreements and $250,000
for the SWAP Agreements. On March 23, 1993, the NHPUC approved the
settlements.
SETTLEMENT OF THE SEABROOK TAX SUIT
On April 16, 1993, the Governor of New Hampshire signed into law
legislation that implemented the settlement of a suit concerning property tax
on Seabrook station (the Seabrook Tax) that was filed with the United States
Supreme Court by Attorneys General of Connecticut, Massachusetts and Rhode
Island. The legislation made various changes to New Hampshire tax laws,
resulting in taxes of approximately $5.8 million to be paid by NU on a
consolidated basis in each of 1993 and 1994 and $3.0 million in 1995, a
reduction from the $9.5 million paid by NU on a consolidated basis in 1992.
Of such amounts to be paid, CL&P's portion will be approximately $0.6 million
in each of 1993 and 1994 and approximately $0.3 million in 1995 and NAEC's
portion will be approximately $5.2 million in each of 1993 and 1994 and
approximately $2.7 million in 1995.
MEMORANDUM OF UNDERSTANDING
On May 6, 1993, PSNH, NAEC, NUSCO and the Attorney General of the
State of New Hampshire entered into a Memorandum of Understanding
(Memorandum) relating to certain issues which had arisen under the Rate
Agreement. In part, the issues addressed relate to the enactment of the
legislation implementing the settlement of the Seabrook Tax lawsuit.
Pursuant to the Memorandum, tax changes imposed by the legislation will not
increase PSNH's overall ratepayer charges, but will be reflected in PSNH
rates pursuant to the Rate Agreement through offsetting adjustments to PSNH's
14
base rates and FPPAC charges. On June 1, 1993, PSNH put into effect a
temporary increase of $0.00074 per kilowatthour in base rates designed to
recover the increased costs associated with the enactment of the legislation.
A corresponding decrease in the FPPAC costs collected after June 1, 1993
offset the base rate increase. The FPPAC decrease reflected the reduction of
the Seabrook property tax resulting from the legislation.
The Memorandum also addresses the implementation of new accounting
standards imposed by SFAS 106 and SFAS 109. The Memorandum establishes the
method of accounting under SFAS 106 for employees' post-retirement benefits
other than pensions for PSNH ratemaking purposes. Under SFAS 109, companies
may recognize as a deferred tax asset the value of certain tax attributes.
The Memorandum provides for the establishment of a regulatory liability
attributable to significant net operating loss carryforwards and establishes
that such liability should be amortized over a six-year period beginning on
May 1, 1993.
Other provisions of the Memorandum cover:
NAEC's acquisition of the Vermont Electric Generation and Transmission
Cooperative's (VEG&T) 0.41259% interest in Seabrook for approximately
$6.4 million and NAEC's sale of the output to PSNH. All necessary regulatory
approvals for NAEC's acquisition have been received and NAEC acquired
VEG&T's interest on February 15, 1994. The Rate Agreement will be amended to
ensure that this acquisition will not impact PSNH rates during the fixed rate
period.
The Rate Agreement's ROE collar floor provisions were amended to provide
for the adjustment by PSNH of its revenue received from James River
Corporation and Wausau Papers of New Hampshire by the amount of the demand
charge discount previously approved by the NHPUC.
The Rate Agreement was also amended to provide that any adjustments to
the amount of PSNH's liability under the Seabrook Power Contract to reimburse
NAEC for payments to the Seabrook Nuclear Decommissioning Financing Fund (a
fund administered by the State of New Hampshire to finance decommissioning of
Seabrook) will be recovered through adjustments to PSNH's base rates;
however, such adjustments will not be subject to the annual 5.5 percent
increases established under the Rate Agreement. See "Electric Operations -
Nuclear Generation - Decommissioning" for further information on
decommissioning costs for Seabrook station and other nuclear units that the
System owns or participates in.
On May 11, 1993, PSNH and the State of New Hampshire filed a petition
with the NHPUC seeking approval of the Memorandum. As required for
implementation, PSNH's lenders approved the Memorandum. The NHPUC hearing on
the petition seeking approval of the Memorandum and a request to make the
June 1, 1993, temporary base rate increase permanent was held on December 2,
1993. PSNH entered into a stipulation with the NHPUC staff and the OCA which
modified the Memorandum slightly, clarifying terms of the NAEC power contract
applicable to the VEG&T interest in Seabrook. The NHPUC approved the
Memorandum as modified by the stipulation, the permanent base rate increase
and the Third Amendment to the Rate Agreement on January 3, 1994.
As a result of the approval of the Memorandum, PSNH's earnings in 1993
increased by $10 million. The cumulative impact of the issues resolved by
the Memorandum is not expected to have a significant impact on PSNH's future
earnings.
15
SEABROOK POWER CONTRACT
PSNH and NAEC entered into the Seabrook Power Contract (Contract) on
June 5, 1992. Under the terms of the Contract, PSNH is obligated to purchase
NAEC's initial 35.56942% ownership share of the capacity and output of
Seabrook 1 for the term of Seabrook's NRC operating license and to pay NAEC's
"cost of service" during this period, whether or not Seabrook 1 continues to
operate. NAEC's cost of service includes all of its prudently incurred
Seabrook-related costs, including maintenance and operation expenses, cost of
fuel, depreciation of NAEC's recoverable investment in Seabrook 1 and a
phased-in return on that investment. The payments by PSNH to NAEC under the
Contract constitute purchased power costs for purposes of the FPPAC and are
recovered from customers under the Rate Agreement. Decommissioning costs
are separately collected by PSNH in its base rates. See "Rates - New
Hampshire Retail Rates - Rate Agreement and FPPAC" for information relating
to the Rate Agreement.
If Seabrook 1 is retired prior to the expiration of the Nuclear
Regulatory Commission (NRC) operating license term, NAEC will continue to be
entitled under the Contract to recover its remaining Seabrook investment and
a return of that investment and its other Seabrook-related costs for 39
years, less the period during which Seabrook 1 has operated. At December 31,
1993, NAEC's net utility plant investment in Seabrook 1 was $732 million.
The Contract provides that NAEC's return on its "allowed investment"
in Seabrook 1 (its investment in working capital, fuel, capital additions
after the date of commercial operation of Seabrook 1 and a portion of the
initial investment) is calculated based on NAEC's actual capitalization from
time to time over the term of the Contract, its actual debt and preferred
equity costs, and a common equity cost of 12.53 percent for the first ten
years of the Contract, and thereafter at an equity rate of return to be fixed
in a filing with the FERC. The portion of the initial investment which is
included in the "allowed investment" was 20 percent for the twelve months
commencing May 16, 1991, increasing by 20 percent in the second year and by
15 percent in each of the next four years, resulting in 100 percent in the
sixth and each succeeding year. As of December 31, 1993, 55 percent of the
investment was included in rates.
NAEC is entitled to earn a deferred return on the portion of the initial
investment not yet phased into rates. The deferred return on the excluded
portion of the initial investment will be recovered, together with a return
on it, beginning in the first year after PSNH's Fixed Rate Period, and will
be fully recovered prior to the tenth anniversary of PSNH's reorganization
date.
Effective February 15, 1994, NAEC also owns the 0.41259% share of
capacity and output of Seabrook it purchased from VEG&T. NAEC sells that
share to PSNH under an agreement that has been approved by FERC and is
substantially similar to the Contract; however, the agreement does not
provide for a phase-in of allowed investment and associated deferrals of
capital recovery.
MASSACHUSETTS RETAIL RATES
GENERAL
WMECO's retail electric rate schedules are subject to the jurisdiction
of the DPU. The rates charged under HWP's contracts with industrial
customers are not subject to the ratemaking jurisdiction of any state or
federal regulatory agency.
16
Massachusetts law allows the DPU to suspend a proposed rate increase
for up to six months. If the DPU does not act within the suspension period,
the proposed rates may be put into effect.
Under present rate-making standards, the DPU allows few adjustments to
historic test year expenses to reflect the conditions anticipated by a
company during the first year amended rate schedules are to be in effect.
The principal adjustments that are permitted are inflation adjustments to
historic test year non-fuel operation and maintenance expenses. Rate base is
based on test year-end levels, and capital structure is based on test
year-end levels adjusted for known and measurable changes. Current DPU
practices permit WMECO to normalize most income tax timing differences.
In Holyoke, Massachusetts, where HWP and Holyoke Gas and Electric
Department, a municipal utility, operate side-by-side, approximately 30 HWP
industrial customers sought bids as a group in 1993 for future electric
service. HWP retained the load and has a 10-year contract, at substantially
lower rates than in the past, to supply the group.
WMECO REGULATORY ACTIVITY
In December 1991, WMECO filed an application with the DPU for a retail
rate increase of approximately $36 million or 9.1 percent. In April 1992,
WMECO and the Massachusetts Attorney General filed a partial settlement
agreement for approval by the DPU. Also in April 1992, a settlement
agreement on WMECO's C&LM program budget was filed with the DPU jointly by
WMECO, the Massachusetts Attorney General, Massachusetts Division of Energy
Resources (DOER), the Conservation Law Foundation, Inc. (CLF) and the DPU's
Settlement Intervention Staff. The settlement agreement covered WMECO's C&LM
program through 1993 and included an annual budget of $17 million for both
years. The parties also agreed that all expenditures and other charges
relating to C&LM would be collected through a conservation charge (CC).
In May 1992, the DPU accepted the WMECO retail rate case and the C&LM
settlement agreements. As a result, WMECO's annual retail rates increased by
$12 million, or three percent, on July 1, 1992, and by a further $11 million,
or 2.7 percent, on July 1, 1993. In June 1992, the DPU resolved the remaining
issues in the rate case filed in December 1991, when it issued an order on
WMECO's rate design. The DPU order required the first and second year base
revenue increases to be allocated so that all classes contribute the same
percentage increase.
In July 1992, the DPU approved an amended settlement agreement for 1992
and 1993 C&LM programs that established a CC that promoted rate stability by
spreading the costs and subsequent recovery of 1992 and 1993 C&LM programs
over the 18-month period from July 1, 1992 through December 31, 1993. The CC
includes incremental C&LM program costs above or below base rate recovery
levels, C&LM fixed cost recovery adjustments, and the provision for a C&LM
incentive mechanism. In January 1993, WMECO filed with the DPU a request to
reduce the CC rate by an aggregate of $3 million in 1993. On February 5,
1993, the DPU directed WMECO to file a revised CC to be effective on March 1,
1993 based on actual 1992 expenditures and the preapproved 1993 budget. The
DPU approved the new CC on February 26, 1993. A motion for reconsideration
was filed by certain of the parties to the original settlement. The DPU
rejected that motion on July 9, 1993. WMECO filed for approval of a new CC
on February 2, 1994. The DPU held a hearing on the proposed new CC on
February 18, 1994.
17
In October 1992, the DPU approved an Integrated Resource Management
(IRM) settlement agreement that had been proposed by WMECO, the Attorney
General, CLF, DOER and the Massachusetts Public Interest Research Group
(MASSPIRG) concerning WMECO's IRM. The settlement required WMECO to submit
its C&LM programs for 1994, 1995 and a portion of 1996 for approval by the
DPU prior to October 1993, and to file its next IRM draft initial filing on
January 3, 1994. The settlement also requires WMECO to prepare a
competitive resource solicitation at least six months before its C&LM filing
for any new C&LM programs it proposes.
On March 16, 1993 WMECO filed a motion with the DPU to request authority
to eliminate the separate (and higher) rates for residential electric heating
customers by placing those customers on the same rates as the residential
non-electric heating customers. WMECO proposed this change in order to be
more competitive and to stem its losses of electric heating customers. On
April 30, 1993, the DPU denied WMECO's request to eliminate the separate
rates for residential electric heating customers but reduced the customer and
energy charges for the electric heating customers to equal the comparable
charges for non-electric heating customers.
In November 1993, WMECO submitted its C&LM filing required in the
settlement of the IRM proceeding, along with a settlement offer from WMECO,
the Attorney General, DOER, CLF and MASSPIRG. The settlement offer
incorporated preapproved C&LM funding levels for 1994 and 1995 of $14.2
million and $15.8 million, respectively. The settlement also provides for
the recovery of lost fixed revenue and a bonus incentive if certain
implementation objectives are met. On January 21, 1994, the DPU approved the
settlement.
On January 3, 1994, WMECO submitted its next draft initial IRM filing
required by the October 1992 settlement to the DPU. The filing indicates the
System does not need additional resources until at least the year 2007 and,
therefore, WMECO does not intend to issue any solicitation for additional
resources anytime in the foreseeable future. WMECO is presently
participating in settlement discussions concerning this IRM filing. Should
no settlement be reached, WMECO is scheduled to submit its initial IRM
filing to the DPU in April 1994.
WMECO ADJUSTMENT CLAUSE
In Massachusetts, all fuel costs are collected on a current basis by
means of a forecasted quarterly fuel clause. The DPU must hold public
hearings before permitting quarterly adjustments in WMECO's retail fuel
adjustment clause. In addition to energy costs, the fuel adjustment clause
includes capacity and transmission charges and credits that result from
short-term transactions with other utilities and from the operation of the
Northeast Utilities Generation and Transmission Agreement (NUG&T). The NUG&T
is the FERC-approved contract among the System operating companies, other
than PSNH, that provides for the sharing among the companies of system-wide
costs of generation and transmission and serves as the basis for planning and
operating the System's bulk power supply system on a unified basis.
Massachusetts law establishes an annual performance program related
to fuel procurement and use, and requires the DPU to review generating unit
performance and related fuel costs if a utility fails to meet the fuel
procurement and use performance goals set for that utility. Goals are
established for equivalent availability factor, availability factor, capacity
factor, forced outage rate and heat rate. Fuel clause revenues collected in
18
Massachusetts are subject to potential refund, pending the DPU's examination
of the actual performance of WMECO's generating units.
Currently pending before the DPU are investigations into the
performance of WMECO's generating units for the 12-month periods ending
May 31, 1992 and May 31, 1993. The DPU held a hearing on February 1, 1994 on
WMECO's non-nuclear performance for the 12-month period ending May 31, 1992.
Except for the order concerning CYAPC discussed below, the DPU has completed
investigations of, but not yet issued decisions reviewing WMECO's actual
generating unit performance for the program years between June 1987 and May
1991.
The DPU has consistently set performance goals for generating units
that are not wholly-owned and operated by the company whose goals are being
set. The DPU has found that possession of a minority ownership interest in a
generating plant does not relieve a company of its responsibilities for the
prudent operation of that plant. Accordingly, the DPU has established goals,
as discussed above, for the three Millstone units and for the three regional
nuclear generating units (the Yankee plants) in which WMECO has minority
ownership interests.
The total amount of WMECO retail replacement power costs attributable to
the major outages in the 1991 performance year -- the Millstone 3 July 1991
outage (mussel-fouling and service water), the Millstone 1 October 1991
outage (operator requalification examinations) and the November 1991 outages
to perform pipe inspections, analysis and repair -- is approximately $17
million. In December 1992, WMECO notified the DPU that it will forego
recovery of $1.2 million in replacement power costs associated with the
October 1991 Millstone 1 operator requalification examination outage. The
total amount of WMECO retail replacement power costs attributable to outages
in the 1992-1993 performance year is approximately $17 million. Management
believes that some portion of these replacement power costs may be subject to
refund upon completion of the DPU's performance program reviews. However,
management believes that its actions with respect to these outages have been
prudent and does not expect the outcome of the DPU review to have a material
adverse impact on WMECO's future earnings.
In September 1992, the DPU issued a partial order pertaining to CY's
extended 1989-1990 refueling outage (discussed above), disallowing the
recovery of $0.6 million of incremental replacement power costs that could be
attributable to the outage. WMECO filed a motion for reconsideration with
the DPU in the same month, which motion is pending before the DPU.
WHOLESALE RATES
CL&P currently furnishes firm wholesale electric service to one
Connecticut municipal electric system. PSNH serves NHEC, three New Hampshire
municipal electric systems and one investor-owned utility in Vermont. HWP
and its wholly-owned subsidiary, Holyoke Power and Electric Company, serve
one Massachusetts municipal electric system. WMECO serves one New York
investor-owned electric utility. The System's 1993 firm wholesale load was
approximately 275 megawatts (MW). In 1993, firm wholesale electric service
accounted for approximately 2.5 percent of the System's consolidated electric
operating revenues (approximately 1.2 percent of CL&P's operating revenue,
6.0 percent of PSNH's operating revenue, 0.1 percent of WMECO's operating
revenue and 21.5 percent of HWP's operating revenue).
NHEC, PSNH's largest customer, representing 5.9 percent of its revenues
for 1993, filed a petition for reorganization in 1991 under Chapter 11 of the
19
United States Bankruptcy Code. A plan of reorganization for NHEC, which was
confirmed by the Bankruptcy Court in March 1992 and became effective on
December 1, 1993, resolves a series of disputes between PSNH and NHEC and
provides for PSNH to continue to serve NHEC. The contract covering this
continued service has been filed with and accepted by FERC.
In addition to firm service, the System engages in numerous other bulk
supply transactions that reduce retail customer costs, at rates that are
subject to FERC jurisdiction, and it transmits power for other utilities at
FERC-regulated rates. See "Electric Operations - Generation and
Transmission" for further information on those bulk supply transactions and
for information on pending FERC proceedings relating to transmission service.
All of the wholesale electric transactions of CL&P, PSNH, WMECO, NAEC and HWP
are subject to the jurisdiction of the FERC.
For a discussion of certain FERC-regulated sales of power by CL&P, PSNH,
WMECO and HWP to other utilities, see "Electric Operations -- Distribution
and Load." For a discussion of sales of power by NAEC to PSNH, see "Rates -
Seabrook Power Contract." For a discussion of the effects of competition on
the System, see "Competition and Marketing."
20
RESOURCE PLANS
CONSTRUCTION
The System's construction program expenditures, including allowance for
funds used during construction (AFUDC), in the period 1994 through 1998 are
estimated to be as follows:
1994 1995 1996 1997 1998
(Millions of Dollars)
PRODUCTION
CL&P . . . . . $ 60.9 $54.5 $44.3 $41.5 $39.6
PSNH . . . . . 10.5 7.0 13.3 8.7 15.8
WMECO . . . . 17.3 13.5 10.1 9.3 17.4
NAEC . . . . . 8.2 8.5 8.3 7.0 5.8
Other . . . . 16.2 3.0 2.0 0.7 0.5
System Total . 113.1 86.5 78.0 67.2 79.1
SUBSTATIONS AND
TRANSMISSION LINES
CL&P . . . . . 12.2 9.4 11.6 12.3 14.6
PSNH . . . . . 3.0 6.9 9.9 6.1 6.7
WMECO. . . . . 0.8 0.4 0.5 0.8 1.3
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 0.0 0.0 0.0 0.0 0.0
System Total 16.0 16.7 22.0 19.2 22.6
DISTRIBUTION OPERATIONS
CL&P . . . . . 76.1 78.8 80.9 84.1 85.5
PSNH . . . . . 22.0 11.7 10.6 14.5 14.2
WMECO. . . . . 17.4 19.3 17.3 17.2 18.7
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 0.4 0.2 0.2 0.2 0.2
System Total 115.9 110.0 109.0 116.0 118.6
GENERAL
CL&P . . . . . 8.6 8.8 7.2 5.8 5.1
PSNH . . . . . 2.0 3.3 1.9 2.4 2.0
WMECO . . . . 2.0 2.1 1.9 1.5 1.3
NAEC . . . . . 0.0 0.0 0.0 0.0 0.0
Other . . . . 9.9 7.4 7.8 9.8 9.8
System Total 22.5 21.6 18.8 19.5 18.2
TOTAL CONSTRUCTION
CL&P . . . . . 157.8 151.5 144.0 143.7 144.8
PSNH . . . . . 37.5 28.9 35.7 31.7 38.7
WMECO . . . . 37.5 35.3 29.8 28.8 38.7
NAEC . . . . . 8.2 8.5 8.3 7.0 5.8
Other . . . . 26.5 10.6 10.0 10.7 10.5
System Total $267.5 $234.8 $227.8 $221.9 $238.5
The construction program data shown above include all anticipated
capital costs necessary for committed projects and for those reasonably
expected to become committed, regardless of whether the need for the project
arises from environmental compliance, nuclear safety, improved reliability or
other causes.
21
The construction program data shown above generally include the
anticipated capital costs necessary for fossil generating units to operate at
least until their scheduled retirement dates. Whether a unit will be
operated beyond its scheduled retirement date, be deactivated or be retired
on or before its scheduled retirement date is regularly evaluated in light of
the System's needs for resources at the time, the cost and availability of
alternatives, and the costs and benefits of operating the unit compared with
the costs and benefits of retiring the unit. Retirement of certain of the
units could, in turn, require substantial compensating expenditures for other
parts of the System's bulk power supply system. Those compensating capital
expenditures have not been fully identified or evaluated and are not included
in the table.
FUTURE NEEDS
The System's integrated demand and supply planning process is the means
by which the System periodically updates its long-range resource needs.
The current resource plan identifies a need for new resources beginning in
2007.
Because New England and the System have surplus generating capacity and
are forecasting low load growth over the next several years, the System has
no current plans to construct or to contract for any new generating units.
Additional capacity beyond 2007, the projected System year of need, can come
from a variety of sources. The design and implementation of new C&LM
programs, the timely development of economic, reliable and efficient
qualifying cogeneration and small power production facilities (QFs) or
independent power producer (IPP) capacity through state-sanctioned resource
acquisition processes, economic utility-sponsored generating resources
(including the possibility of repowering retired power plants) and purchases
from other utilities will all receive consideration in the System's
integrated resource planning process.
With respect to demand-side management measures, the System's long-
term plans rely, in part, on encouraging additional C&LM by customers. These
measures, including installations to date, are projected to lower the System
summer peak load in 2007 by over 1000 MW. In addition, System companies have
long-term arrangements to purchase the output from QFs and IPPs under federal
and state laws, regulations and orders mandating such purchases. CL&P's,
PSNH's and WMECO's plans anticipate the development of QFs and IPPs supplying
710 MW of firm capacity by 1995, of which approximately 695 MW was
operational in 1993. See "New Hampshire Retail Rates -- Rate Agreement and
FPPAC" for information concerning PSNH's efforts to renegotiate its
agreements with thirteen QFs.
CL&P and WMECO filed applications with the U.S. Environmental Protection
Agency to receive 203 SO2 allowances for C&LM activity as authorized by the
Clean Air Act Amendments. See "Regulatory and Environmental Matters -
Environmental Regulation - Air Quality Requirements."
The DPUC has issued regulations establishing competitive bidding systems
for future purchases by Connecticut electric utilities from QFs and IPPs and
from C&LM vendors. The regulations also implement a state law which provides
that a utility may seek a premium of between one and five percentage points
above its most recently authorized rate of return for each multi-year C&LM
program requiring capital investment by the utility. In April 1993, CL&P
submitted its eighth annual filing to the DPUC on private power production,
C&LM, projected avoided costs and related matters. CL&P stated that the
22
System's existing and committed resources are expected to be sufficient to
meet System capacity requirements until 2007, and therefore, CL&P did not
solicit new capacity from QFs or C&LM vendors in 1993. In December 1993, the
DPUC issued its final decision approving CL&P's avoided cost estimates as
filed.
In 1993, regulatory preapproval was obtained for all 1993 C&LM
expenditures in each of the three retail jurisdictions. In addition, the
DPUC authorized a maximum of 3 percent premium rate of return (after
tax) on CL&P C&LM investment in 1993. WMECO is currently projected to earn
$1.2 million of incentive (after tax) based on 1993 program savings. See
"Rates - Connecticut Retail Rates - Conservation and Load Management" and
"Rates - Massachusetts Retail Rates -WMECO Regulatory Activity" for
information about rate treatment of C&LM costs.
In 1988, the DPU adopted regulations requiring preapproval of
Massachusetts utilities' major investments in electric generating facilities,
including life extensions. In 1990, the DPU adopted new IRM regulations,
which established procedures by which additional resources are planned,
solicited and processed to provide for reliable electric service in a least-
cost manner. The regulations provide a mechanism for preapproval (rather
than after-the-fact review) of utility plant construction, procurement of
non-utility generation (QFs and IPPs), and C&LM programs. The regulations
specifically require that environmental externalities be considered in the
evaluation of resource alternatives.
In January 1994, WMECO filed its initial draft IRM filing, stating that
WMECO's year of need is estimated to be 2007, and that no new capacity need
be solicited at this time. WMECO is presently in settlement discussions.
See "Rates-Massachusetts Retail Rates - WMECO Regulatory Activity" for
further information relating to WMECO C&LM issues.
In 1993, the NHPUC approved a settlement agreement related to PSNH's
1992 least cost planning filing, which defers various planning issues to
PSNH's April 1, 1994 filing.
In addition to the contributions from C&LM, QFs and IPPs, the System's
long-term resource plan includes consideration of continued operation of
certain of the System's fossil generating units beyond their current book
retirement dates to the extent that it is economic, and possibly repowering
certain of the System's older fossil plants. Continued operation of existing
fossil units past their book retirement dates (and replacing certain
critically located peaking units if they fail) is expected by 2007 to provide
approximately 1,400 MW of resources that would otherwise have been retired.
Repowering of some of the System's retired generating plants could make
available an additional 900 MW of capacity. The capacity could be brought on
line in various increments timed with the year of need. The System's need
for new resources may be affected by any additional retirements of the
System's existing generating units.
The System companies periodically study the economics of their
generating units as part of their overall resource planning process. In
1992, the DPUC ordered CL&P to submit economic analyses of the continued
operation of 11 fossil steam units by April 1, 1993, and of Millstone
Units 1 and 2 and CY, of which the System companies own 49 percent) by April
1, 1994. In 1993, the DPUC reviewed the continued unit operation (CUO)
studies submitted by CL&P for the eleven fossil units in Connecticut and
23
Massachusetts in its annual review of Integrated Resource Planning. The DPUC
concluded that a decision was inappropriate at that time and that it would
review the issue again in its management audit of CL&P and in CL&P's 1994
integrated resource planning docket. For Millstone 1 and 2 and CY, the CUO
studies are in progress. Preliminary indications are that the operation of
the units continues to be economic for customers. Final analyses for CY and
the Millstone units will be filed with the DPUC in 1994.
For planning and budgetary purposes, the System assumes that CL&P's
Montville Station (497.5 MW) will be deactivated from November 1994 through
October 1998. A final decision is expected to be made in 1994. Since
reactivation is expected to occur in 1998, the System year of need of 2007 is
unaffected. The System year of need of 2007 assumes PSNH's Merrimack 2
continues to operate. However, Merrimack 2's continued operation is in
question because Merrimack 2 produces significant NOx emissions. The concern
has been raised as to whether the emissions can be lowered to acceptable
levels in the short and long term. In 1993, PSNH worked successfully with
local, state and federal interests to arrive at a solution for Merrimack 2
NOx compliance by 1995, while deferring a decision on continued unit
operation beyond 1999 to the future. For information regarding the agreement
concerning NOX emissions at the Merrimack units, see "Regulatory and
Environmental Matters - Environmental Regulation - Air Quality Requirements."
See "Regulatory and Environmental Matters -- NRC Nuclear Plant Licensing"
for further information on the NRC rule on nuclear plant operating license
renewal and information on the expiration dates of the operating licenses of
the nuclear plants in which System companies have interests. Before the
System can make any decisions about whether license extensions for any of its
nuclear units are feasible, detailed technical and economic studies will be
needed.
FINANCING PROGRAM
1993 FINANCINGS
In January 1993, WMECO issued $60 million in principal amount of 6 7/8
percent first mortgage bonds due in 2000. In July 1993, CL&P issued $200
million and $100 million, respectively, of 5 3/4 percent and 7 1/2 percent
first mortgage bonds due in 2000 and 2023, respectively. In December 1993,
CL&P issued $125 million of 7 3/8 percent first mortgage bonds due in 2025.
The proceeds from the foregoing issues were used to redeem outstanding bonds
with interest rates ranging from 8 3/4 percent to 9 3/4 percent.
In October 1993, CL&P issued $80 million of 5.30 percent preferred
stock, $50 par value. The proceeds of this issuance, together with $30
million of short-term debt, were used to redeem $110 million of preferred
stock with dividend rates ranging from 7.6 percent to 9.1 percent.
In September 1993, the Connecticut Development Authority (CDA) issued,
on behalf of CL&P, two tax-exempt variable rate pollution control revenue
bonds (PCRBs) in the amounts of $245.5 million and $70 million, respectively.
At the same time, the CDA issued, on behalf of WMECO, $53.8 million of
tax-exempt variable rate PCRBs. The proceeds of these issues were used to
redeem like amounts of tax-exempt PCRBs having less favorable structures.
These refinancings will result in savings from the extension of maturities,
the redemption of two issues of fixed-rate bonds with proceeds of the
24
issuance of variable-rate bonds, the improved credit ratings of new
supporting letter of credit banks and associated administrative savings. In
December 1993, the New Hampshire Business Finance Authority (BFA) issued, on
behalf of PSNH, $44.8 million of tax-exempt variable rate PCRBs. The
proceeds of this issue were used to redeem a like amount of taxable PCRBs.
Taxable BFA bonds issued on behalf of PSNH in the amount of $109.2 million
are outstanding and may be refinanced with tax-exempt bonds upon the receipt
of an allocation of the state's private activity volume allocation.
In January 1993, CL&P, PSNH and WMECO purchased $340 million, $75
million and $52 million, respectively, of three-year variable rate debt
caps. The caps were purchased to hedge the interest rate risk of the
companies' respective variable rate PCRBs and were sized to approximate each
respective company's then-current tax-exempt variable rate PCRB issuances.
If the interest rate, based on the J. J. Kenny index, exceeds 4.5 percent
(the strike rate), each company will receive payments under the terms of its
respective interest rate cap agreement. In June 1993, PSNH purchased a
$50 million six-month interest rate cap, a $50 million 12 month cap and a
$100 million 18 month cap to hedge its interest rate exposure on its variable
rate term note. The six-month and 12 month caps have a strike rate of
4.5 percent and the 18 month cap has a strike rate of 5.0 percent, all based
on 90 day LIBOR. These caps were sized to approximate portions of a PSNH
term note which has a quarterly sinking fund of $23.5 million.
In February 1993, NU, CL&P, WMECO and the Niantic Bay Fuel Trust (NBFT)
began a co-managed commercial paper program with two commercial paper
dealers. Prior to this time, each company's commercial paper program was
managed by one commercial paper dealer. The co-managed program was
implemented to promote competition between commercial paper dealers, to
increase the investor universe and to increase the range of maturities
available to the issuers. On December 31, 1993, $113.0 million commercial
paper was outstanding under these programs.
In December 1993, NNECO issued $25 million of 7.17 percent unsecured
amortizing notes maturing in 2019. The proceeds of this issuance are being
used to finance the construction of a new building at Millstone station to
house various administrative and technical support functions.
FINANCING NUCLEAR FUEL
The System requires nuclear fuel for the three Millstone units and for
Seabrook 1. The requirements for the Millstone 1, Millstone 2 and CL&P's and
WMECO's share of the Millstone 3 units are financed through a third party
trust financing arrangement described below. All nuclear fuel for NAEC's and
CL&P's shares of Seabrook 1 and PSNH's share of Millstone 3 is owned and
financed directly by the respective companies. For the period 1994 through
1998, NAEC's and CL&P's shares of the cost of nuclear fuel for Seabrook 1 are
estimated at $56.8 million and $6.4 million, respectively, excluding AFUDC.
For the same period, PSNH's share of the cost of nuclear fuel for Millstone 3
is estimated at $6 million, excluding AFUDC.
In 1982, CL&P and WMECO entered into arrangements under which NBFT owns
and finances the nuclear fuel for Millstone 1 and 2 and CL&P's and WMECO's
share of the nuclear fuel for Millstone 3. NBFT finances the fuel from the
time uranium is acquired, during the off-site processing stages and through
its use in the units' reactors. NBFT obtains funds from bank loans, the sale
of commercial paper and the sale of intermediate term notes. The fuel is
leased to CL&P and WMECO by the trust while it is used in the reactors, and
25
ownership of the fuel is transferred to CL&P and WMECO when it is permanently
discharged from the reactors. CL&P and WMECO are severally obligated to make
quarterly lease payments, to pay all expenses incurred by NBFT in connection
with the fuel and the financing arrangements, to purchase the fuel under
certain circumstances and to indemnify all the parties to the transactions.
The trust arrangements presently allow up to $530 million to be
financed by NBFT with bank loans and commercial paper (up to $230 million)
and with intermediate term notes (up to $300 million). The arrangements with
the banks are in effect until February 19, 1996, and can be extended for an
additional three years if the parties so agree. On December 31, 1993, NBFT
had $80 million of intermediate term notes and $113 million of commercial
paper outstanding.
As of December 31, 1993, NBFT's investment in nuclear fuel, net of the
fourth quarter 1993 lease payment made on January 31, 1994, for all three
Millstone units was $172.1 million, as follows:
Total
CL&P WMECO System
(Millions of Dollars)
In process.......... $20.3 $4.7 $25.0
In stock............ 8.0 1.9 9.9
In reactor.......... 111.2 26.0 137.2
Total.......... $139.5 $32.6 $172.1
For the period 1994 through 1998, CL&P and WMECO's share of the cost
of nuclear fuel for the three Millstone units that will be acquired through
NBFT will be $313.5 million and $73.2 million, respectively, excluding AFUDC.
Nuclear fuel costs and a provision for spent fuel disposal costs are
being recovered through rates as the fuel is consumed in reactors.
1994 FINANCING REQUIREMENTS
In addition to financing the construction requirements described under
"Resource Plans - Construction," the System companies are obligated to meet
$1,373.8 million of long-term debt maturities and cash sinking fund
requirements and $76.4 million of preferred stock cash sinking fund
requirements in 1994 through 1998. In 1994, long-term debt maturity and cash
sinking fund requirements will be $295.3 million, consisting of $182 million
of long-term debt maturities and $7 million of debt cash sinking fund
requirements to be met by CL&P, $94 million of cash sinking fund requirements
to be met by PSNH, $1.5 million of cash sinking funds to be met by WMECO and
$10.7 million of cash sinking fund requirements to be met by other
subsidiaries. These figures do not include $125 million of long-term debt
redeemed by CL&P on January 7, 1994 with the proceeds of its issuance of $125
million mortgage bonds in December 1993. See "Financing Program - 1993
Financings."
See "Electric Operations -- Nuclear Generation -- Operations --
Seabrook" for information on CL&P's commitment to advance funds to cover
payments that a 12 percent Seabrook owner might be unable to pay with respect
to Seabrook project costs.
26
The System's aggregate capital requirements for 1994, exclusive of
requirements under NBFT, are as follows:
Total
CL&P PSNH WMECO NAEC Other System
(Millions of Dollars)
Construction
(including AFUDC)..... $157.8 $37.5 $37.5 $ 8.2 $26.5 $267.5
Nuclear Fuel
(excluding AFUDC). (.3) 1.8 (.2) 5.8 - 7.1
Maturities......... 182.0 - - - - 182.0
Cash Sinking Funds. 7.0 94.0 1.5 - 10.7 113.2
Total.......... $346.5 $133.3 $38.8 $14.0 $37.2 $569.8
1994 FINANCING PLANS
The System companies, other than CL&P, currently expect to finance
their 1994 requirements through internally generated funds. CL&P may issue
up to $200 million of long-term debt, primarily to finance maturing
securities. This estimate excludes the nuclear fuel requirements financed
through the NBFT. See "Financing Nuclear Fuel" above for information on the
NBFT. In addition to financing their 1994 requirements, the System companies
intend, if market conditions permit, to continue to refinance a portion of
their outstanding long-term debt and preferred stock, if that can be done at
a lower effective cost.
On February 17, 1994, CL&P issued $140 million in principal amount of
5 1/2 percent first mortgage bonds due in 1999 and $140 million in principal
amount of 6 1/2 percent first mortgage bonds due in 2004. The net proceeds
were used to redeem higher cost first mortgage bonds.
On March 8, 1994, WMECO contracted to issue $40 million principal
amount of 6 1/4 percent first mortgage bonds due in 1999 and $50 million in
principal amount of 7 3/4 percent first mortgage bonds due in 2024. The net
proceeds will be used to redeem higher cost first mortgage bonds.
FINANCING LIMITATIONS
The amounts of short-term borrowings that may be incurred by NU, CL&P,
PSNH, WMECO, HWP, NAEC, NNECO, The Rocky River Realty Company (RRR), The
Quinnehtuk Company (Quinnehtuk) (RRR and Quinnehtuk are real estate
subsidiaries), and HEC are subject to periodic approval by the SEC under the
Public Utility Holding Company Act of 1935 (1935 Act).
The following table shows the amount of short-term borrowings authorized
by the SEC for each company and the amounts of outstanding short term debt of
those companies at the end of 1993.
27
Maximum Authorized Short-Term Debt
Short-Term Debt Outstanding at 12/31/93*
(Millions of Dollars)
NU.................. $ 175.0 $ 72.5
CL&P ............... 375.0 96.2
PSNH ............... 125.0 2.5
WMECO............... 75.0 6.0
HWP................. 8.0 -
NAEC................ 50.0 -
NNECO............... 65.0 -
RRR................. 25.0 16.5
Quinnehtuk.......... 8.0 4.3
HEC................. 11.0 2.9
______
$200.9
_________________
* This column includes borrowings of various System companies from NU and
other System companies through the Northeast Utilities System Money Pool
(Money Pool). Total System short term indebtedness to unaffiliated lenders
was $173.5 million at December 31, 1993.
The supplemental indentures under which NU issued $175 million in
principal amount of 8.58 percent amortizing notes in December 1991 and
$75 million in principal amount of 8.38 percent amortizing notes in March
1992 contain restrictions on dispositions of certain System companies' stock,
limitations of liens on NU assets and restrictions on distributions on and
acquisitions of NU stock. Under these provisions, neither NU, CL&P, PSNH nor
WMECO may dispose of voting stock of CL&P, PSNH or WMECO other than to NU or
another System company, except that CL&P may sell voting stock for cash to
third persons if so ordered by a regulatory agency so long as the amount sold
is not more than 19 percent of CL&P's voting stock after the sale. The
restrictions also generally prohibit NU from pledging voting stock of CL&P,
PSNH or WMECO or granting liens on its other assets in amounts greater than
five percent of the total common equity of NU. As of March 1, 1994, no NU
debt was secured by liens on NU assets. Finally, NU may not declare or make
distributions on its capital stock, acquire its capital stock (or rights
thereto), or permit a System company to do the same, at times when there is
an Event of Default under the supplemental indentures under which the
amortizing notes were issued.
The charters of CL&P and WMECO contain preferred stock provisions
restricting the amount of short term or other unsecured borrowings those
companies may incur. As of December 31, 1993, CL&P's charter would permit
CL&P to incur an additional $570 million of unsecured debt and WMECO's
charter would permit it to incur an additional $141.1 million of unsecured
debt.
In connection with NU's acquisition of PSNH, certain financial
conditions intended to prevent NU from relying on CL&P resources if the PSNH
acquisition strains NU's financial condition were imposed by the DPUC. The
principal conditions provide for a DPUC review if CL&P's common equity falls
to 36 percent or below, require NU to obtain DPUC approval to secure NU
financings with CL&P stock or assets, and obligate NU to use its best efforts
to sell CL&P preferred or common stock to the public if NU cannot meet CL&P's
need for equity capital. At December 31, 1993, CL&P's common equity ratio
was 39.1 percent.
While not directly restricting the amount of short-term debt that CL&P,
WMECO, RRR, NNECO and NU may incur, credit agreements to which CL&P, WMECO,
HWP, RRR, NNECO and NU are parties provide that the lenders are not required
28
to make additional loans, or that the maturity of indebtedness can be
accelerated, if NU (on a consolidated basis) does not meet a common equity
ratio that requires, in effect, that the NU consolidated common equity (as
defined) be at least 27 percent for three consecutive quarters. At December
31, 1993, NU's common equity ratio was 30.9 percent. Credit agreements to
which PSNH is a party forbid its incurrence of additional debt unless it is
able to demonstrate, on a pro forma basis for the prior quarter and going
forward, that its equity ratio (as defined) will be at least 21 percent of
total capitalization (as defined) through June 30, 1994, 23 percent through
June 30, 1995 and 25 percent thereafter. In addition, PSNH must demonstrate
that its ratio of operating income to interest expense will be at least 1.5
to 1 for each period of four fiscal quarters ending after June 30, 1993
through June 30, 1994 and 1.75 to 1 thereafter. At December 31, 1993, PSNH's
common equity ratio was 28.2 percent and its operating income to interest
expense ratio was 2.27 to 1.
See "Short-Term Debt" in the notes to NU's, CL&P's, PSNH's and WMECO's
financial statements for information about credit lines available to System
companies.
The indentures securing the outstanding first mortgage bonds of CL&P,
PSNH, WMECO and NAEC provide that additional bonds may not be issued, except
for certain refunding purposes, unless earnings (as defined in each
indenture, and before income taxes, and, in the case of PSNH, without
deducting the amortization of PSNH's regulatory asset) are at least twice the
pro forma annual interest charges on outstanding bonds and certain prior lien
obligations and the bonds to be issued.
The preferred stock provisions of CL&P's, WMECO's and PSNH's charters
also prohibit the issuance of additional preferred stock (except for
refinancing purposes) unless income before interest charges (as defined and
after income taxes and depreciation) is at least 1.5 times the pro forma
annual interest charges on indebtedness and the annual dividend requirements
on preferred stock that will be outstanding after the additional stock is
issued.
Beginning with the dividends paid on NU common shares by NU in June
1990, NU's Dividend Reinvestment Plan (DRP) was amended to authorize the
dividends and optional cash purchases of participating shareholders to be
reinvested in NU common shares purchased either in the open market or
directly from NU. NU received approximately $42.4 million in 1991 and
approximately $35.6 million in 1992 of new common shareholders' equity from
the reinvestment of dividends and voluntary cash investments. No funds have
been raised by NU through DRP since August 1992, when management ended direct
purchases and caused shares to be purchased for DRP participants in the open
market.
As part of the PSNH acquisition in June 1992, NU issued warrants for the
purchase of NU common stock at a price of $24 per share. In 1993, NU
received $8.3 million from the exercise of these warrants. As of December
31, 1993, warrants for 7,975,516 shares of NU common stock remained
unexercised.
NU is dependent on the earnings of, and dividends received from, its
subsidiaries to meet its own financial requirements, including the payment of
dividends on NU common shares. At the current indicated annual dividend of
$1.76 per share, NU's aggregate annual dividends on common shares outstanding
at December 31, 1993, including unallocated shares held by the ESOP trust,
would be approximately $236.2 million. Dividends are payable on common
shares only if, and in the amounts, declared by the NU Board of Trustees.
29
SEC rules under the 1935 Act require that dividends on NU's shares be
based on the amounts of dividends received from subsidiaries, not on the
undistributed retained earnings of subsidiaries. The SEC's order approving
NU's acquisition of PSNH under the 1935 Act approved NU's request for a
waiver of this requirement through June 1997. PSNH and NAEC were effectively
prohibited from paying dividends to NU through May 1993. Through the
remainder of 1993, PSNH and NAEC did not pay dividends to permit them to
build up the common equity portion of their capitalizations. Until PSNH and
NAEC can begin to fund a part of NU's dividend requirements, NU expects to
fund that portion of its dividend requirements with the proceeds of
borrowings.
The supplemental indentures under which CL&P's and WMECO's first
mortgage bonds and the indenture under which PSNH's first mortgage bonds have
been issued limit the amount of cash dividends and other distributions these
subsidiaries can make to NU out of their retained earnings. As of December
31, 1993, CL&P had $210.6 million, WMECO had $26.5 million and PSNH had $60.8
million of unrestricted retained earnings. PSNH's preferred stock provisions
also limit the amount of cash dividends and other distributions PSNH can make
to NU if after taking the dividend or other distribution into account, PSNH's
common stock equity is less than 25 percent of total capitalization. The
indenture under which NAEC's Series A Bonds have been issued also limits the
amount of cash dividends or distributions NAEC can make to NU to retained
earnings plus $10 million. At December 31, 1993, $48.7 million was available
to be paid under this provision.
PSNH's credit agreements prohibit PSNH from declaring or paying any cash
dividends or distributions on any of its capital stock, except for dividends
on the preferred stock, unless minimum interest coverage and common equity
ratio tests are satisfied.
Certain subsidiaries of NU established the Money Pool to provide a more
effective use of the cash resources of the System, and to reduce outside
short term borrowings. The Service Company administers the Money Pool as
agent for the participating companies. Short term borrowing needs of the
participating companies (except NU) are first met with available funds of
other member companies, including funds borrowed by NU from third parties.
NU may lend to, but not borrow from, the Money Pool. Investing and borrowing
subsidiaries receive or pay interest based on the average daily Federal Funds
rate, except that borrowings based on loans from NU bear interest at NU cost.
Funds may be withdrawn or repaid to the Money Pool at any time without prior
notice.
ELECTRIC OPERATIONS
DISTRIBUTION AND LOAD
The System operating companies own and operate a fully-integrated
electric utility business. The System operating companies' retail electric
service territories cover approximately 11,335 square miles (4,400 in CL&P's
service area, 5,445 in PSNH's service area and 1,490 in WMECO's service area)
and have an estimated total population of approximately 3.7 million (2.5
million in Connecticut, 780,000 in New Hampshire and 450,000 in
Massachusetts). The companies furnish retail electric service in 149, 198
and 59 cities and towns in Connecticut, New Hampshire and Massachusetts,
respectively. In December 1993, CL&P furnished retail electric service to
approximately 1.085 million customers in Connecticut, PSNH provided retail
electric service to approximately 397,000 customers in New Hampshire and
30
WMECO served approximately 193,000 retail electric customers in
Massachusetts. HWP serves approximately 25 customers in a portion of the
town of Holyoke, Massachusetts.
The following table shows the sources of 1993 electric revenues based on
categories of customers:
CL&P PSNH WMECO NAEC Total System
Residential........... 39% 35% 38% - 39%
Commercial............ 33 17 30 - 29
Industrial ........... 14 28 20 - 18
Wholesale* ........... 11 17 8 100% 11
Other ................ 3 3 4 - 3
____ ____ ____ ____ ____
Total ................ 100% 100% 100% 100% 100%
______________________
* Includes capacity sales.
NAEC's 1993 electric revenues were derived entirely from sales to PSNH
under the Seabrook Power Contract. See "Rates - Seabrook Power Contract" for
a discussion of the contract.
Through December 31, 1993, the all-time maximum demand on the System was
6,191 MW, which occurred on July 8, 1993. At the time of the peak, the
System's generating capacity, including capacity purchases, was 8,965 MW.
The System was also selling approximately 1,431 MW of capacity to other
utilities at that time.
In 1993, System energy requirements were met 62 percent by nuclear
units, nine percent by oil burning units, 10 percent by coal burning units,
three percent by hydroelectric units, two percent by natural gas burning
units and 14 percent by cogenerators and small power producers. By
comparison, in 1992 the System's energy requirements were met 48 percent by
nuclear units, 24 percent by oil burning units, 10 percent by coal burning
units, four percent by hydroelectric units, one percent by natural gas
burning units and 13 percent by cogenerators and small power producers. See
"Electric Operations-Generation and Transmission" for further information.
The actual changes in kWh sales for the last two years and the
forecasted sales growth estimates for the 10-year period 1993 through 2003,
in each case exclusive of bulk power sales, for the System, CL&P, PSNH and
WMECO are set forth below:
1993 over 1992 over Forecast 1993-2003
(under) 1992 (under) 1991 Compound Rate of Growth
System......... 10.9%(1) 15.3%(1) 1.4%
CL&P........... (0.3)% 0.2% 1.3%
PSNH........... 1.0% 1.1% 1.7%
WMECO....... 0.1% (1.6)% 1.1%
___________________
(1) The percent increase in System 1992 sales over 1991 sales and 1993
sales over 1992 sales is due to the inclusion of PSNH sales
beginning in June 1992.
31
In 1990, FERC required the reclassification of bulk power sales from
"purchased power" to "sales for resale" for the 1990 and later reporting
years. Bulk power sales are not included in the development of any long-term
forecasted growth rates. The actual changes in kWh sales for the last two
years, adjusted for bulk power sales (by adding back the bulk power sales),
for the System, CL&P, PSNH and WMECO are set forth below:
1993 over (under) 1992 1992 over (under) 1991
System ................... 11.8%(1) 19.7%(1)
CL&P ..................... 1.2% 3.3%
PSNH ..................... (9.3)% 6.7%
WMECO .................... 13.5% 9.9%
__________________
(1) System sales percentages reflect the inclusion of PSNH sales beginning
in June 1992.
Despite a warmer than normal summer that added to cooling requirements,
sales showed negligible growth in 1993. Widespread economic recovery
throughout the System's service territory did not occur in 1993, but there
were mixed pockets of regional economic growth aided by very favorable
interest rates. Curtailments in defense spending continue to affect the
Connecticut, New Hampshire and western Massachusetts economies, which are
heavily dependent on defense-related industries. Competition in various
forms may also adversely affect the projected growth rate of sales over the
next ten years. Where energy costs are a significant part of operating
expenses, business customers may turn to self-generation, switch fuel
sources, or relocate to other states and countries which have aggressive
programs to attract new businesses. For further information on the effect of
competition on sales growth rates, see "Marketing and Competition."
The forecasted load growth for the System as a whole is significantly
below historic rates in part because of forecasted savings from NU-sponsored
C&LM programs, which are designed to minimize operating expenses for System
customers and postpone the need for new capacity on the System. The
forecasted ten-year growth rate of System sales would be approximately
1.8 percent instead of 1.4 percent if the System did not pursue C&LM savings.
See "Resource Plans - Future Needs" for an estimate of the impact of C&LM
programs on the System's need for new generating resources and for
information about C&LM cost impacts and cost recovery. See "Rates -
Connecticut Retail Rates" and "Rates - Massachusetts Retail Rates" for
information about rate treatment of C&LM costs.
With the System's generating capacity of 8,268 MW as of January 1, 1994
(including the net of capacity sales to and purchases from other utilities,
and approximately 690 MW of capacity to be purchased from QFs and IPPs under
existing contracts and contracts under negotiation), the System expects to
meet its projected annual peak load growth of 1.3 percent reliably until at
least the year 2007.
The availability of new resources and reduced demand for electricity
have combined to place the System and most other New England electric
utilities in a surplus capacity situation. The principal resource changes
were Seabrook 1's commercial operation, the full operation of the second
phase of the Hydro-Quebec project, and increased availability of power from
QF and IPP projects. As a consequence, the competition from capacity-long
32
utilities as sellers and the loss of utilities that are no longer capacity-
short as buyers have adversely affected the System companies' efforts to sell
additional surplus capacity at the price levels that prevailed in the late
1980s. Taking into account projected load growth for the System and
committed capacity sales, but not taking into account future potential
capacity sales to other utilities that are not subject to firm commitments,
the System's surplus capacity is expected to be approximately 1,000 MW in
1994.
For further information on the effect of competition on sales of surplus
capacity, see "Competition and Marketing."
The System operating companies operate and dispatch their generation
as provided in the New England Power Pool (NEPOOL) Agreement. In 1993, the
peak demand on the NEPOOL system was 19,570 MW, which occurred in July, above
the 1992 peak load of 18,853 MW in January of that year. NEPOOL has projected
that there will be an increase in demand in 1994 and estimates that the
summer 1994 peak load could reach 19,800 MW. NEPOOL projects that sufficient
capacity will be available to meet this anticipated demand.
GENERATION AND TRANSMISSION
The System operating companies and most other New England utilities with
electric generating facilities are parties to the NEPOOL Agreement. Under
the NEPOOL Agreement, the region's generation and transmission facilities are
planned and operated as part of the regional New England bulk power system.
System transmission lines form part of the New England transmission system
linking System generating plants with one another and with the facilities of
other utilities in the northeastern United States and Canada. The generating
facilities of all NEPOOL participants are dispatched as a single system
through the New England Power Exchange, a central dispatch facility. The
NEPOOL Agreement provides for a determination of the generating capacity
responsibilities of participants and certain transmission rights and
responsibilities. Pool dispatch results in substantial purchases
and sales of electric energy by pool participants, including the System
companies, at prices determined in accordance with the NEPOOL Agreement.
The System operating companies, except PSNH, pool their electric
production costs and the costs of their principal transmission facilities
under the NUG&T agreement. In addition, a ten-year agreement between PSNH and
CL&P, WMECO and HWP provides for a sharing of the capability responsibility
savings and energy expense savings resulting from a single system dispatch.
In connection with NU's acquisition of PSNH, the System proposed a
comprehensive plan for opening up a transmission corridor between northern
and southern New England for use in "wheeling" power of other utilities. The
plan was designed to accomplish a level of access to transmission resources
of the PSNH and New England Electric System (NEES) systems that could
formerly be accomplished only after a series of multilateral negotiations.
The plan includes provisions to (i) make 452 MW of long term transmission
service available across the PSNH system from Maine to Massachusetts, Rhode
Island, Connecticut and Vermont at embedded cost rates, (ii) make 200 MW of
long term transmission service available by NEES for those utilities
requiring deliveries across NEES's system in order to make use of access to
the PSNH system, and (iii) construct new facilities as needed to expand the
corridor from Maine to Massachusetts, if the cost of expansion is supported
and if regulatory approvals for the expansion are received. Further, NU
committed to make access to the combined NU-PSNH transmission system
available for third-party wheeling transactions whenever capacity is
available, and to expand the system when expansion is feasible. The
33
principal constraints are that NU and PSNH have reserved a priority on the
use of their transmission systems to serve the reliability needs of their own
native load customers, and the commitment to expand would be subject to
obtaining all necessary approvals. This plan became effective in October
1992, subject to the outcome of a hearing ordered by FERC in this proceeding,
and the Commission's final decision in the compliance phase of the merger
proceeding discussed below. NU and NEES filed offers of settlement in this
proceeding in May and June 1993, respectively, and the Presiding
Administrative Law Judge certified both settlement offers to the Commission
in July 1993. The only contested issue was the refund and surcharge
provision that was included in both offers of settlement. The Commission has
not yet acted on these settlement offers.
These commitments, and the entire issue of access to the NU and PSNH
transmission systems by other utilities and non-utility generators, were the
subject of extensive controversy in New England. On January 29, 1992, FERC
issued a decision approving the acquisition and allowing NU and PSNH
customers to be held harmless if other utilities and non-utility generators
need to use the NU-PSNH transmission to buy or sell electricity. In
accordance with the January 29 decision, on April 23, 1992 and August 4,
1992, NU made compliance filings, including transmission tariffs implementing
the FERC's conditions. All tariffs have been accepted by FERC and were
effective as of the merger date. FERC has issued summary determinations
(without hearing) and NU has filed for rehearing of FERC's compliance tariff
order in an effort to reinstate the originally proposed rates. FERC has not
yet acted on NU's rehearing petition.
FERC's approval of NU's acquisition of PSNH was appealed to the United
States Court of Appeals for the First Circuit. On May 19, 1993, the First
Circuit Court affirmed FERC's decision approving the merger but remanded to
FERC one issue brought by NU related to FERC's ability to change the terms of
the Seabrook Power Contract. FERC filed for en banc (full court) review by
the First Circuit Court on the Seabrook Power Contract issue, which was
denied. No petitions for review were filed in the U.S. Supreme Court,
therefore, the First Circuit Court's decision is final. FERC has yet to
initiate any proceeding on the court's remand, which would address whether
FERC could modify the Seabrook Power Contract under a more stringent "public
interest standard."
On December 21, 1993, NU filed an appeal in the United States Court
of Appeals for the District of Columbia Circuit of a FERC order directing NU
to put itself on its own transmission tariffs in connection with all NU sales
of wholesale power. NU had committed, as part of the PSNH merger, to place
itself on its tariff when it was competing with other wholesale power
suppliers to make a sale in order to "level the playing field." In its
order, FERC expanded NU's merger commitment to include all transactions,
regardless of whether or not NU's competitors need to use the NU transmission
system.
The controversy about the terms on which wheeling transactions are to be
effected in New England has stimulated a series of negotiations among
utilities, regulators and non-utility generators, directed at the possible
development of new regional transmission arrangements. While an original
draft regional transmission arrangement was not supported by all parties,
there have been negotiations on a less comprehensive arrangement. Any
arrangement would be subject to approval by NEPOOL members and FERC.
HYDRO-QUEBEC
Along with other New England utility companies, CL&P, PSNH, WMECO and
34
HWP is each a participant in agreements to finance, construct, and operate
the United States portion of direct current transmission circuits between New
England and Quebec, Canada. The project was built in two phases, and now
provides 2,000 MW of rated transfer capacity with Canadian facilities
constructed and owned by Hydro-Quebec, a Canadian utility system. Phase 1,
which entered into commercial operation in 1986, initially provided 690 MW of
North-South transfer capacity. In Phase 2, the transmission line was
extended to a new converter station in eastern Massachusetts. Phase 2
entered into full operation in 1991. The actual transfers over the
interconnection to date have averaged in the 1,400 to 1,800 MW range.
The interconnection permits a reduction in oil consumption in New
England and has the potential to produce cost savings to customers through
the purchase of power from Hydro-Quebec's hydroelectric generating
facilities. The interconnection also reduces the level of reserves New
England utilities must carry to assure that pool reliability criteria are
met.
The System companies are obligated to pay 34.22 percent of the annual
costs of the Phase 1 facilities and 32.78 percent of the annual cost of the
Phase 2 facilities. They are entitled, on the basis of a composite of these
percentages, to use the capacity of the facilities for their own transactions
and to share in the savings from pool energy transactions with Hydro-Quebec.
The Phase 1 total project cost was $141 million and the Phase 2 total project
cost was approximately $495 million. Phase 2 was constructed and is owned
and operated by two companies in which NU has a 22.66 percent equity
ownership interest. As an equity participant, NU guarantees certain
obligations in connection with the debt financing of certain other
participants that have lower credit ratings, and it receives compensation for
such undertakings.
When the Phase 2 facilities became fully operational in 1991, a contract
covering the purchase by the New England utilities of 70 terawatthours of
energy from Hydro-Quebec over a period of approximately ten years came into
effect. While transactions under this contract are expected to constitute
the principal use of the interconnection during the 1990s, the
interconnection is also available for other energy transactions and for the
"banking" of energy in Canada during off-peak hours in New England, with
equivalent amounts of energy available to New England during peak hours.
FOSSIL FUELS
OIL
The System's residual oil-fired generation stations used approximately
5.89 million barrels of oil in 1993. The System obtained the majority of its
oil requirements in 1993 through contracts with three large, independent oil
companies. Those contracts allow for some spot purchases when market
conditions warrant, but spot purchases represented less than 15 percent of
the System's fuel oil purchases in 1993. The contracts expire annually or
biennially.
The average 1993 price paid for fuel oil used for electric generation
was approximately $14 per barrel, which was the same as the average 1992
price. No. 6 fuel oil prices were high during the first quarter of 1993 due
to increased demand and firm crude oil prices. Fuel oil prices declined
slightly during the second and third quarters, weakened in the fourth quarter
due to weak crude prices associated with OPEC over-production and then firmed
in the first quarter of 1994 due to severe weather in the Northeast. On
35
February 1, 1994, the weighted average price being paid for the System's fuel
oil had increased to $17 per barrel.
The System-wide fuel oil storage capacity is approximately 2.5 million
barrels. In 1993, inventories were maintained at levels between 40 - 60
percent of capacity. This inventory constitutes approximately 13 days of
full load operation.
GAS
Currently, three system generating units, PSNH's Newington unit, WMECO's
West Springfield Unit 3 and CL&P's Montville 5, can burn either residual oil
or natural gas as economics dictate. The System is currently in the process
of converting CL&P's Devon Units 7 & 8 into oil and gas dual-fuel generating
units. Devon Unit 8's boiler conversion, which gave it gas burning
capability, was completed in December 1993. Devon Unit 7's boiler conversion
is scheduled for completion during its upcoming April 1994 outage. The System
plans to have both units operational by the end of July 1994.
Annual gas consumption depends on factors such as oil prices, gas
prices and unit availability. In 1993, gas was used sparingly at the
System's dual-fuel units because of the attractiveness of oil prices relative
to those for natural gas. CL&P, PSNH and WMECO all have contracts with the
local gas distribution companies where the Montville, Newington and West
Springfield units are located, under which natural gas is made available by
those companies on an interruptible basis. While WMECO and PSNH meet all of
their gas supply needs for the West Springfield and Newington units through
purchases from the local gas distribution company, CL&P can supply its
Montville unit either by purchasing gas from the local gas distribution
company at a DPUC-approved rate or by purchasing gas directly from producers
or brokers and transporting that gas through the interstate pipeline system
and the local gas distribution system. In 1993, all of the gas burned at
Montville Unit 5 was purchased from a local gas distribution company. It is
expected that gas for the Devon units will be purchased directly from
producers or brokers on an interruptible basis and transported through the
interstate pipeline system and the local gas distribution company.
The System expects that interruptible natural gas will continue to be
available for its dual-fuel electric generating units and will continue to
supplement fuel oil requirements. The Iroquois Gas Transportation System,
which became fully operational in November 1992, is expected to increase New
England's gas supplies by at least 35 percent by November 1994. The
increased availability of gas may make the option of converting other oil-
burning electric generating units to gas on an interruptible dual-fuel basis
more attractive to the System.
COAL
Currently, coal is purchased for HWP's Mt. Tom Station and for PSNH's
Merrimack Units 1 and 2 and its coal-oil Schiller Units 4, 5 and 6. Mt. Tom
Station received approximately 314,000 tons of coal in 1993 at an average
delivered coal price of $ 43.40 per ton, which is down from the average 1992
coal price of $44.25 per ton. In 1993, HWP extended an existing contract
for the majority of the coal to be supplied to Mt. Tom Station. This contract
provides the System with assurance of coal supply and the flexibility to
purchase some coal on the spot market. In the future, the System will
evaluate whether to continue to purchase coal by contract or return to the
spot market.
36
The coal inventory for Mt. Tom Station varies between a minimum level of
30 days fuel and a maximum of approximately 100 days fuel. Typically, the
higher level is achieved in December, when deliveries are suspended for the
winter. The stockpile provides the plant's operating fuel until deliveries
are resumed in March. Because of changes in federal and state air quality
requirements, by 1995 HWP will need to change the kinds of coal that it
purchases for use at Mt. Tom Station. The potential impact of changing air
quality requirements on coal supplies is being evaluated, and HWP is testing
various types of coal to meet these requirements. See "Regulatory and
Environmental Matters - Environmental Regulation-Air Quality Requirements."
In December 1991, PSNH executed a contract for the purchase of up to 100
percent of the coal requirements for PSNH's Merrimack Units 1 and 2 through
December 31, 1993. This contract has been extended through December 31,
1994. Under this agreement, PSNH may also purchase coal on the spot market.
In 1993, Merrimack Station received approximately 1.1 million tons of coal.
The average delivered coal price in 1993 was $43.00 per ton. The coal
inventory at Merrimack Station varies between a minimum of 60 days and a
maximum of 90 days of fuel.
Schiller Units 4, 5 and 6, PSNH's dual-fuel coal and oil fired units,
are dispatched on the most economical fuel in accordance with the provisions
of the NEPOOL Agreement. Schiller Station consumed approximately 236,000
tons of coal in 1993 at an average delivered price of $39.40 per ton.
Schiller's 1993 coal requirements were fulfilled through three primary
contracts, pursuant to which 77 percent was provided by foreign suppliers and
the remaining 23 percent by a domestic supplier.
FOSSIL PLANT RETIREMENTS
In 1991, the System retired seven of the System's oldest, least used,
and most costly oil-fired steam generating units. In 1992, five oil-burning
combustion turbines were retired. The decision to retire these units
reflected both the surplus of generating capacity in New England and the
System's continuing efforts to reduce operation and maintenance costs. There
were no significant fossil plant retirements in 1993, but the System's plan
calls for deactivating, by the end of 1994 Montville Units 5 and 6, which
have a capacity of 82 MW and 410 MW, respectively. A final decision on the
future of these units will be made following the completion of further
economic evaluations and consideration of possible alternatives.
NUCLEAR GENERATION
GENERAL
The System companies have interests in seven operating nuclear units:
Millstone 1, 2 and 3, Seabrook 1 and three other units owned by regional
nuclear generating companies (the Yankee companies). System companies
operate the three Millstone units, Seabrook 1 and CY. The System companies
also have interests in the owned by the Yankee Atomic Electric Company
(Yankee Rowe), which was permanently removed from service in 1992.
CL&P and WMECO own 100 percent of Millstone 1 and 2 as tenants in
common. Their respective ownership interests are 81 percent and 19 percent.
CL&P, PSNH and WMECO have agreements with other New England
utilities covering their joint ownership as tenants in common of Millstone 3.
CL&P's ownership interest in the unit is 52.9330 percent (608 MW), PSNH's
ownership interest in the unit is 2.8475 percent (32.7 MW) and WMECO's
interest is 12.2385 percent (140.6 MW). NAEC and CL&P are parties to an
37
agreement, similar to the Millstone 3 agreements, with respect to their
35.98201 percent (413.8 MW) and 4.05985 percent (46.7 MW) interests,
respectively, in Seabrook. The agreements all provide for pro rata sharing
of the construction and operating costs and the electrical output of each
unit by the owners, as well as associated transmission costs.
CL&P, PSNH, WMECO and other New England electric utilities are the
stockholders of the Yankee companies. Each Yankee company owns a single
nuclear generating unit. The stockholder-sponsors of a Yankee company are
responsible for proportional shares of the operating costs of the Yankee
company and are entitled to proportional shares of the electrical output.
The relative rights and obligations with respect to the Yankee companies are
approximately proportional to the stockholders' percentage stock holdings,
but vary slightly to reflect arrangements under which non-stockholder
electric utilities have contractual rights to some of the output of
particular units. The Yankee companies and CL&P's, PSNH's and WMECO's stock
ownership percentages and approximate MW entitlements in each are set forth
below:
CL&P PSNH WMECO System
% MW % MW % MW % MW
Connecticut Yankee Atomic
Power Company (CYAPC) ...... 34.5 204 5.0 29 9.5 56 49.0 289
Maine Yankee Atomic Power
Company (MYAPC) ............ 12.0 95 5.0 39 3.0 24 20.0 158
Vermont Yankee Nuclear
Power Corporation (VYNPC)... 9.5 44 4.0 19 2.5 12 16.0 75
Yankee Atomic Electric
Company (YAEC)* ............ 24.5 - 7.0 - 7.0 - 38.5 -
_____________________________
* See "Yankee Units" for information about the permanent shutdown of the unit
owned and operated by YAEC.
CL&P, PSNH and WMECO are obligated to provide their percentages of any
additional equity capital necessary for the Yankee companies. CL&P, PSNH and
WMECO believe that the Yankee companies, excluding YAEC, will require
additional external financing in the next several years to finance
construction expenditures and nuclear fuel and for other purposes. Although
the ways in which each Yankee company will attempt to finance these
expenditures have not been determined, CL&P, PSNH and WMECO could be asked to
provide direct or indirect financial support for one or more Yankee
companies.
OPERATIONS
Capacity factor is a ratio that compares a unit's actual generating
output for a period with the unit's maximum potential output. In 1993, the
nuclear units in which the System companies have entitlements achieved an
actual composite (weighted by entitlement) capacity factor of 79.9 percent.
The five nuclear units operated by the System had a composite capacity factor
of 80.3 percent based on normal winter claimed capability. The average
capacity factor for operating nuclear units in the United States was 73.2
percent for January through September 1993 and 80.4 percent for the five
System nuclear units operated in 1993, in each case using the design
electrical rating method rather than normal winter claimed capability.
38
When the nuclear units in which they have interests are out of service,
CL&P, PSNH and WMECO need to generate and/or purchase replacement power.
Recovery of prudently incurred replacement power costs is permitted, with
limitations, through the GUAC for CL&P, through a retail fuel adjustment
clause for WMECO and through a comprehensive fuel and purchased power
adjustment clause (FPPAC) for PSNH. For the status of regulatory and legal
proceedings related to recovery of replacement power costs for the 1990-1993
period, see "Rates - Connecticut Retail Rates," "Rates-Massachusetts Retail
Rates" and "Rates - New Hampshire Retail Rates."
MILLSTONE UNITS
The 1993 overall performance of the three nuclear electric generating
units located at Millstone station and operated by the System was
substantially better than in 1992. For the twelve months ended December 31,
1993, the three units' composite capacity factor was 79.3 percent, compared
with a composite capacity factor of 53.1 percent for the twelve months ended
December 31, 1992 and 38.4 percent for the same period in 1991.
In 1993 Millstone 1 operated at a 92.4 percent capacity factor with no
extended outages. The unit began a planned refueling and maintenance outage
on January 15, 1994 that is expected to last seventy-one days. Major work
includes replacement of the main condenser tubes and installation of a new
low pressure turbine. These modifications are intended to reduce the number
of unplanned outages and improve the overall plant efficiency.
In 1993 Millstone 2 operated at a 82.5 percent capacity factor. On
January 13, 1993, the plant returned to service following a refueling outage
that commenced on May 29, 1992. During that outage, both steam generators
were replaced. The DPUC has opened a docket to review CL&P's performance in
replacing Millstone 2's steam generators. See "Rates-Connecticut Retail
Rates" for further information on the steam generator replacement docket. In
addition to several short outages during 1993, Millstone 2 was shut down for
two unplanned outages of significant duration. The first such outage began
on August 5, 1993, to replace a leaking primary system valve. That outage
lasted ten days. For more information on this outage, see "Electric
Operations - Nuclear Generation - Operations - NRC Regulation." The second
significant unplanned outage lasted twenty-six days, commencing on September
15, 1993, and was necessary to upgrade the motor-operated feedwater isolation
valves. Millstone 2 is scheduled to begin a refueling and maintenance outage
on July 30, 1994. The outage is currently planned for a 63-day duration.
Major work activities will include a reactor vessel in-service inspection,
erosion/corrosion piping inspections, motor-operated valve testing and
service water piping replacement.
In 1993 Millstone 3 operated at a 64.8 percent capacity factor. The
unit began a refueling and maintenance outage on July 31, 1993 and completed
it in 99 days. During the outage two significant issues were identified and
resolved. Each of these issues resulted in an outage extension beyond
original plans. The first issue required replacement of all four reactor
coolant pumps due to concerns over turning vane cap screw and locking cup
integrity. The second issue related to problems identified during inspection
and testing of the supplementary leak collection and release system (SLCRS)
and the auxiliary building ventilation system (ABVS), which provide secondary
protection against radiological releases to the atmosphere. For more
information on this issue, see "Electric Operations - Nuclear Generation -
Operations - NRC Regulation." Resolution of these problems necessitated
various modifications to these systems. No refueling or maintenance outages
are planned for Millstone 3 during 1994.
39
NUCLEAR PERFORMANCE IMPROVEMENT INITIATIVES
The System's nuclear organization is taking major steps to correct
identified performance weaknesses. For instance, on a 1992 to 1995
cumulative basis, NU anticipates total expenditures of approximately $2.3
billion for operation and maintenance and $440 million in capital
improvements for the five plants that it operates.
In addition, the comprehensive Performance Enhancement Program (PEP),
authorized in 1992, continues to be one of the major initiatives that the
nuclear organization is implementing to improve its overall performance. The
program, in conjunction with other actions to address the long-term
performance of the nuclear group, is designed to correct the root causes of
the declining performance trend noted in the early 1990's. The PEP is
organized into four major areas of activities, each focusing on a particular
aspect of nuclear operations. The areas are management practices, programs
and processes, performance assessments and functional programs. These areas
were established based on an internal self-assessment completed in 1992.
Detailed action plans have been prepared to address the specific activities.
At the end of 1992, six of the forty-two action plans were completed and
validated. An additional fourteen action plans were completed in 1993 and
are awaiting validation. Seven action plans are to be completed in
1994, leaving fifteen action plans to complete during the remainder of the
program. The 1993 PEP budget was $32.9 million.
The System also announced a major reorganization of its
Connecticut-based nuclear organization on November 8, 1993. The primary
focus was realignment of engineering services along unit lines. The changes
also included the appointment of a new senior vice president for Millstone
station, some management consolidation, and a reorganization of the nuclear
plant maintenance staff. See "Employees." In addition, most of the nuclear
support staff currently located in Berlin, Connecticut will be centralized at
the generating stations by the summer of 1994. To support these efforts, the
System is constructing a five-story office building at Millstone station.
This building will replace several temporary modular buildings and will house
most of the nuclear technical support staff that is now located at various
System locations. The prudence of this construction project is the subject
of an ongoing inquiry by the DPUC.
SEABROOK
In 1993 Seabrook 1 operated at a capacity factor of 89.8 percent. The
unit is currently in an 18-month operating cycle that began in November 1992.
The unit is scheduled to begin a 57-day refueling and maintenance outage on
April 16, 1994. During this outage, the main plant computer will be
replaced.
CL&P, PSNH and NAEC could be affected by the ability of other Seabrook
joint owners to fund their share of Seabrook costs. Great Bay Power
Corporation (GBPC), a former subsidiary of Eastern Utilities Associates and
owner of 12.13 percent of Seabrook, has been in bankruptcy since February
1991. The Bankruptcy Court confirmed GBPC's reorganization plan on March 5,
1993 and approvals are required from NRC, FERC and NHPUC to consummate the
plan. CL&P has committed to advance GBPC up to $12 million, secured by a
high priority lien on GBPC's share of Seabrook, to cover GBPC's shortfalls in
funding its share of the operation of Seabrook through June 30, 1994. As of
March 1, 1994, CL&P was lending approximately $2 million to GBPC under this
arrangement. GBPC has advised CL&P that it expects to consummate its
40
reorganization plan, emerge from bankruptcy and repay CL&P for all advances
by June 30, 1994. CL&P is unable to predict what impact, if any, failure of
the reorganization plan to become effective will have on the operating
license for Seabrook or what actions CL&P and the other joint owners of the
unit may be required to take.
On May 6, 1991, NHEC, PSNH's largest customer and one of the joint
owners of Seabrook, filed a petition for reorganization under Chapter 11 of
the Federal Bankruptcy Code. The plan of reorganization for NHEC was
confirmed by the United States Bankruptcy Court on March 20, 1992 and
wholesale power arrangements were accepted by FERC on July 22, 1992. On
October 5, 1992, the NHPUC released an order approving NHEC's plan of
reorganization. Under the plan of reorganization, NHEC will remain a
customer of PSNH. The plan also provides that PSNH will purchase the
capacity and energy of NHEC's 2.2 percent ownership interest in Seabrook 1
and pay all of NHEC's Seabrook costs for a ten-year period, which began July
1, 1990. On December 1, 1993, the United States Bankruptcy Court for the
District of New Hampshire declared the NHEC reorganization plan effective as
of that date. See "Rates--Wholesale Rates" for further information on the
bankruptcy and subsequent reorganization of NHEC.
At certain times, VEG&T failed to pay its share of Seabrook costs.
Certain joint owners, including PSNH and CL&P, provided funds against future
payments due from VEG&T to assure that funds were available to meet its
ownership share of Seabrook costs. PSNH initially participated in such
payments, but ceased providing such funds in January 1988, when it commenced
bankruptcy proceedings under Chapter 11 of the Bankruptcy Code. The total
amount contributed by PSNH until then was $976,000. The total amount
contributed by CL&P was $265,000.
As part of an agreement to resolve issues raised during the bankruptcy
of PSNH, PSNH agreed that it or its designee would purchase the VEG&T 0.41259
percent interest in Seabrook for approximately $6.4 million. NAEC, the
current owner of PSNH's ownership share in Seabrook, agreed to purchase the
interest and to enter into a separate power contract with PSNH, under which
PSNH would be obligated to buy from NAEC all of the capacity and output of
Seabrook attributable to such interest for a period equal to the
length of the NRC full power operating license for Seabrook. On January 7,
1994, the NRC approved the transfer of VEG&T's ownership share of Seabrook
to NAEC. All other regulatory approvals for NAEC's purchase were
received and the acquisition became effective on February 15, 1994. In
settlement of their claims against VEG&T for advances, PSNH and CL&P received
payment of the amounts advanced, $1.78 million and $390,000, respectively,
out of proceeds of the sale, with interest thereon, for the period each
advance was outstanding at the prime rate. See "Rates-New Hampshire Retail
Rates-Memorandum of Understanding" and "Rates-New Hampshire Retail
Rates-Seabrook Power Contract" for further information on NAEC's acquisition
of VEG&T's share of Seabrook.
In 1989, as part of a comprehensive settlement of Seabrook issues,
PSNH agreed to make certain payments totaling $16 million to Massachusetts
Municipal Wholesale Electric Company during the first eight years of Seabrook
operation. As of December 31, 1993, PSNH had made approximately $7.2 million
of these payments.
YANKEE UNITS
CY, the nuclear unit owned by MYAPC (MY) and the nuclear unit owned by
VYAPC (VY) operated in 1993 at capacity factors of 73.1 percent, 74.3 percent
and 74.1 percent, respectively, based on normal winter claimed capability.
41
Yankee Rowe has not operated since October 1991.
CY. As of December 31, 1993, CY, since it began commercial operation in
1968, had generated over 99 billion kWh (gross) of electricity, making it one
of the most productive nuclear generating units in the United States.
The unit completed, on schedule, a 66-day refueling and maintenance
outage that began on May 15, 1993. The second reload of fuel clad with
zircalloy was installed during this outage to replace the stainless steel
clad fuel. There is one more phase to this upgrade project that, when
completed, will make the operation of the reactor core more economical by
allowing longer operating cycles. CY's next refueling and maintenance outage
is scheduled to begin on November 12, 1994 and is expected to last 54 days.
Major work activities will include auxiliary feedwater system modifications
and motor-operated valve testing. The start date and length of this
refueling outage may be impacted by an unplanned shutdown which occurred on
February 12, 1994, when the plant was required to come off line to address
integrity concerns in the safety-related service water system. CYAPC is
reviewing the scope of work required and schedule for returning the unit to
service from the unplanned outage.
In October 1992, CYAPC filed an application with the FERC for wholesale
rate relief. CYAPC requested the increase to become effective on January 1,
1993. The filing requested an increase in estimated decommissioning cost
collections from $130 million to $309.1 million (in July 1992 dollars) and
also proposed to adjust decommissioning accruals automatically on an annual
basis beginning January 1, 1993. In December 1992, FERC accepted CYAPC's
increased rates for filing, to become effective on June 1, 1993, subject to
refund, and rejected the proposal to automatically adjust decommissioning
accruals. A settlement between all the parties was reached in 1992 and was
accepted by FERC in 1993. This included an accrual level for decommissioning
of $294.2 million in 1992 dollars and an automatic increase of 5.5% annually
in the decommissioning accrual for each of the next five years.
MY. MY began a refueling and maintenance outage on July 31, 1993 and
completed it in 75 days. During the outage, repairs were made to the reactor
vessel thermal shield.
VY. VY began a refueling and maintenance outage on August 27, 1993, and
completed it in 59 days, including recovery from a dropped fuel bundle that
suspended fuel movement for approximately 20 days.
Yankee Rowe. In February 1992, YAEC's owners voted to shut down Yankee
Rowe permanently and to begin preparations for an orderly decommissioning of
the facility. The decision to close the generating plant eight years before
the end of its operating license was based on an economic evaluation of the
cost of a proposed safety review, the reduced demand for electricity in New
England, the price of alternative energy sources and uncertainty about the
regulatory requirements that the unit would need to meet in order to restart.
See "Electric Operations-Nuclear Generation-Operations-Decommissioning" for
information on YAEC's filing with FERC to collect for shutdown and
decommissioning costs and the recovery of the remaining investment in the
Yankee Rowe plant.
The power contracts between CL&P, PSNH and WMECO and YAEC permit YAEC
to recover from each its proportional share of these costs from CL&P, PSNH
and WMECO. Management believes that, although Yankee Rowe was shut down
eight years before the end of the unit's current license, CL&P, PSNH and
42
WMECO will recover their investments in YAEC, along with any other costs
associated with the shutdown and decommissioning of Yankee Rowe. Accordingly,
the System has recognized these costs as a regulatory asset on its
consolidated balance sheet and as a corresponding obligation to YAEC.
NRC REGULATION
As holders of licenses to operate nuclear reactors, CL&P, PSNH, WMECO,
NAEC, North Atlantic, NNECO and the Yankee companies are subject to the
jurisdiction of the NRC. The NRC has broad jurisdiction over the design,
construction and operation of nuclear generating stations, including matters
of public health and safety, financial qualifications, antitrust
considerations and environmental impact.
In its latest Systematic Assessment of Licensee Performance Report (SALP
report) issued on October 19, 1993, the NRC gave the three Millstone nuclear
plants a Category 1 rating in the area of radiological controls and a
Category 2 rating in five of the seven areas rated: plant operations,
maintenance/surveillance, emergency preparedness, security and
engineering/technical support. The Millstone units received a Category 3
rating in the area of safety assessment/quality verification. Category 1
indicates "a superior level of performance," Category 2 indicates "a good
level of performance" and Category 3 denotes "an acceptable level of
performance." The evaluation covered plant activities for the period
February 16, 1992 through April 3, 1993. Management expects to continue to
improve performance, thereby raising these scores.
The NRC issued its latest SALP report for Seabrook 1 on November 18,
1993. The report covered the interval from March 1, 1992 through August 28,
1993. This report reflects the recent revisions to the SALP program in which
the number of functional evaluation areas has been reduced from seven to
four: plant operations, maintenance, engineering and plant support. The
evaluation rated Seabrook 1 a Category 1 in the engineering and plant support
areas. In the areas of plant operations and maintenance, the unit was rated
a Category 2.
The NRC issued its latest SALP report for CY on May 21, 1993. The
report covered the interval from July 14, 1991 through January 9, 1993. This
evaluation recognized the superior performance of CY by awarding the unit a
Category 1 in six of the seven areas rated: plant operations, emergency
preparedness, security, engineering/technical support, safety
assessment/quality verification and radiological controls. In the final
area, maintenance/surveillance, CY was rated as a Category 2.
Despite the overall improved performance of the Millstone units, there
were a number of regulatory enforcement actions taken by the NRC in 1993. On
May 4, 1993, the NRC issued to NNECO a Notice of Violation (NOV) identifying
two potential violations. The first violation concerned NRC findings that a
former employee was subjected to harassment and intimidation in 1989 for
raising a nuclear safety concern and that senior management was not effective
in dealing with the situation. The second violation involved NRC concerns
that an employee may have deliberately delayed the processing of a
contemplated substantial safety hazard evaluation conducted to fulfill the
requirements of federal law. Following NNECO's response to the NOV, the NRC
withdrew the second violation. To resolve this matter, NNECO paid a fine of
$100,000 in connection with the first violation.
On August 5, 1993, Millstone Unit 2 was shut down by plant personnel
after extensive efforts to repair a leaking primary system valve proved
43
unsuccessful, and a sudden increase in the leak rate was experienced.
Following replacement of the damaged valve, the unit was returned to service
on August 16, 1993. Recognizing the seriousness of this event and the
potentially severe consequences of the failed repair efforts, NNECO
performed a detailed evaluation of this event to consider potential
deficiencies and identify the actions needed to prevent recurrence. The NRC
also conducted a special investigation of this event and on September 22,
1993, identified to NNECO three apparent violations, related to work control
planning and implementation, which were being considered for escalated
enforcement. On December 3, 1993, the NRC informed NNECO that it was
imposing a civil penalty of $237,500 for the three violations. NNECO has
since paid the fine.
On September 10, 1993, NNECO was informed by the NRC that, as a result
of an investigation by the NRC Office of Investigation and a routine safety
inspection of the Millstone Unit 1 nuclear power plant, two apparent
violations arising from 1989 events were being considered for possible civil
monetary penalties. The first issue concerned the alleged failure to
initiate and perform a required engineering analysis to determine the
operability of safety-related system in a timely manner. The second issue
relates to allegations that the engineer who identified the system as being
potentially inoperable was harassed and discriminated against in retaliation
for the findings of his technical evaluations. These matters were
investigated between early 1992 and June 1993 by a grand jury acting under
the direction of the U.S. Attorney's Office in Bridgeport, Connecticut. The
U.S. Attorney's office issued a letter on June 30, 1993, stating that no
prosecutorial action would be initiated. On March 17, 1994, the NRC informed
NNECO that further enforcement action with respect to this matter was not
planned, because their review had determined that there was insufficient
evidence to support the apparent violations.
On September 20, 1993, the NRC issued to NNECO an NOV concerning two
violations at the Millstone Station identified during its evaluation of the
licensed operator requalification training (LORT) program. The first
violation concerned an inspection finding that various licensed operators at
Millstone 1 and 2 did not fully complete the LORT program for the 1991 and
1992 training periods. The second violation cited the failure of NNECO's
internal nuclear review board to perform comprehensive audits of the
training, retaining, requalification, and performance of the operations staff
at Millstone 2 and 3. NNECO chose not to contest the violations nor the
imposition of a $50,000 civil penalty.
On December 15, 1993, the NRC issued an inspection report concerning the
SLCRS and ABVS systems deficiencies that were identified during the 1993
Millstone 3 refueling outage. The report identified two apparent violations
that are being considered for escalated enforcement. The apparent violations
involve the inability of the systems to provide the necessary drawdown of
secondary containment following a postulated accident and NNECO's failure to
fully resolve these problems earlier, as a result of previous similar
violations identified in September 1992. On March 11, 1994, the NRC notified
NNECO that it proposed to impose a civil penalty of $50,000 in respect of
these violations. NNECO has 30 days to respond to the NRC.
In January 1994, the NRC issued a report finding that the overall
Millstone 1 operator requalification training program was satisfactory. The
NRC had previously found the program to be unsatisfactory. The recent
conclusion was based on the results of a number of NRC inspections and the
operator examinations conducted in September 1993. The NRC reviewed NNECO's
corrective actions and determined that all actions necessary to obtain and
maintain a satisfactory requalification training program had been completed
44
and verified.
INDUSTRY-WIDE NUCLEAR ISSUES
The NRC regularly conducts generic reviews of technical and other
issues, a number of which may affect the nuclear plants in which System
companies have interests. Issues currently under review include individual
plant examination programs to evaluate the likelihood and effects of severe
accidents at operating nuclear plants, pipe crack phenomena, post-accident
measures for controlling hydrogen, reactor vessel embrittlement, upgrading of
emergency response facilities and communications, the ability of plants to
cope with a total loss of power, emergency response planning, fitness for
duty policies, operator requalification training, reactor containment
suitability, maintenance adequacy, motor-operated valve testing, design basis
reconstitution, diesel generator reliability, life extension, equipment
procurement, electrical distribution system adequacy, reactor coolant pump
seal integrity, plant risk during shutdown and low power operation,
technical specification improvements, accident management, component aging,
steam generator degradation phenomena, service water system adequacy, seismic
qualification of equipment and other issues. At present, the outcome of the
NRC's reviews of these and other technical issues, and the ways in which the
different nuclear plants in which System companies have interests may be
affected, cannot be determined. The cost of complying with any new
requirements that may result from these reviews cannot be estimated at this
time, but such costs could be substantial. Further, the NRC is currently
evaluating a staff report on the reporting of nuclear safety concerns, which
may result in changes in the way such concerns are addressed. The NRC has
authorized the conduct of various regulatory activities designed to lower
costs to its licensees while maintaining or improving public safety.
Public controversy concerning nuclear power could affect the nuclear
units in which System companies have ownership interests. Over the past
decade, proposals to force the premature shutdown of nuclear units have
become issues of serious and recurring attention in Maine, Massachusetts,
Vermont and New Hampshire. States' efforts to deal with the siting of low
level radioactive waste repositories have also stimulated negative reactions
in communities being considered for those facilities. The continuing
controversy about nuclear power may affect the cost of operating the nuclear
units in which System companies have interests.
While much of the public policy debate about nuclear power has been
critical in the past, some trends in the energy environment have stimulated
renewed support for nuclear power in the northeastern United States. Among
these trends are the growing national environmental concerns and legislation
about acid rain, air quality and global warming associated with fossil fuels.
These concerns particularly affect the densely populated areas in the
Northeast, downwind of coal-burning regions like the Midwest and mid-Atlantic
states. In addition, at times when the price and availability of fuel oil
have been volatile, the System's commitment to nuclear power has allowed it
to minimize the oil-related rise in customers' bills. While the public
controversy about nuclear power is not expected to disappear, recent trends
suggest a more balanced public policy debate about the impacts of fossil fuel
generation as well.
NUCLEAR INSURANCE
The NRC's nuclear property insurance rule requires nuclear plant
licensees to obtain a minimum of $1.06 billion in insurance coverage. The
45
rule requires that, although such policies may provide traditional property
coverage, proceeds from the policy following an accident in which estimated
stabilization and decontamination expenses exceed $100 million will first be
applied to pay such expenses. The insurance carried by the licensees of
the Millstone units, Seabrook 1, CY, MY and VY meets the requirements of this
rule. YAEC has obtained an exemption for the Yankee Rowe plant from the
$1.06 billion requirement and currently carries $25 million of insurance that
otherwise meets the requirements of the rule.
The Price-Anderson Act currently limits public liability from a single
incident at a nuclear power plant to $9.4 billion. The first $200 million of
liability would be provided by purchasing the maximum amount of commercially
available insurance. Additional coverage of up to $8.8 billion would be
provided by an assessment of $75.5 million per incident, levied on each of
the 116 United States nuclear units that are currently subject to the
secondary financial protection program, subject to a maximum assessment of
$10 million per incident per nuclear unit in any year. In addition, if the
sum of all public liability claims and legal costs arising from any nuclear
incident exceeds the maximum amount of financial protection, each reactor
operator can be assessed an additional five percent, up to $3.8 million or
$437.9 million in total for all 116 reactors. The maximum assessment is to
be adjusted for inflation at least every five years.
Based on CL&P's, PSNH's and WMECO's ownership interests in the three
Millstone units and CL&P's and NAEC's interests in Seabrook 1, the System's
current maximum direct liability would be $244.2 million per incident. In
addition, through CL&P's, PSNH's and WMECO's power purchase contracts with
the four Yankee regional nuclear electric generating companies, the System
would be responsible for up to an additional $97.9 million per incident.
These payments would be limited to a maximum in any year of $43.2 million per
incident.
Insurance has been purchased from Nuclear Electric Insurance Limited
(NEIL) to cover: (1) certain extra costs incurred in obtaining replacement
power during prolonged accidental outages with respect to CL&P's and WMECO's
ownership interests in Millstone 1, 2, 3, and CY, CL&P's ownership interest
in Seabrook, and PSNH's Seabrook Power Contract with NAEC; and (2) the cost
of repair, replacement, or decontamination or premature decommissioning of
utility property resulting from insured occurrences with respect to CL&P's
ownership interests in Millstone 1, 2, 3, CY, MY, VY, and Seabrook 1; WMECO's
ownership interests in Millstone 1, 2, 3, CY, MY, and VY; PSNH's ownership
interest in Millstone 3, CY, MY and VY; and NAEC's ownership interest in
Seabrook 1. All companies insured with NEIL are subject to retroactive
assessments if losses exceed the accumulated funds available to NEIL. The
maximum potential assessments against CL&P, PSNH, WMECO, and NAEC with
respect to losses arising during current policy years are approximately $13.9
million under the replacement power policies and $29.9 million under the
property damage, decontamination, and decommissioning policies. Although
CL&P, PSNH, WMECO, and NAEC have purchased the limits of coverage currently
available from the conventional nuclear insurance pools, the cost of a
nuclear incident could exceed available insurance proceeds.
Insurance has been purchased from American Nuclear Insurers/Mutual
Atomic Energy Liability Underwriters, aggregating $200 million on an industry
basis, for coverage of worker claims. All companies insured under this
coverage are subject to retrospective assessments of $3.2 million per
reactor. The maximum potential assessments against CL&P, PSNH, WMECO, and
NAEC with respect to losses arising during the current policy period are
approximately $13.9 million.
46
CYAPC expects that it will receive an insurance recovery for costs
related to the CY thermal shield repair which occurred during the 1987
outage, and the removal which occurred during the 1989 outage, but the amount
and time of payment are not certain. See "Rates-Connecticut Retail
Rates-Adjustment Clauses."
NUCLEAR FUEL
The supply of nuclear fuel for the System's existing units requires the
procurement of uranium concentrates, followed by the conversion, enrichment
and fabrication of the uranium into fuel assemblies suitable for use in the
System's units. These materials and services are available from a number of
domestic and foreign sources. The System companies have predominantly relied
on long term contracts with both domestic and foreign suppliers, supplemented
with short term contracts and market purchases, to satisfy the units'
requirements. Although the System has increased the use of foreign
suppliers, domestic suppliers still provide the majority of the materials and
services. The System companies have maintained diversified sources of
supply, relying on no single source of supply for any one component of the
fuel cycle, with the exception of enrichment services of which the majority
of the System companies' requirements are provided under a long term
contract with the U.S. Enrichment Corporation, a wholly-owned government
corporation, established on July 1, 1993, in accordance with the Energy
Policy Act and the successor to the U.S. DOE Uranium Enrichment Enterprise.
The System expects that uranium concentrates and related services for the
units operated by the System and for the other units in which the System
companies are participating, that are not covered by existing contracts, will
be available for the foreseeable future on reasonable terms and
prices.
As a result of the Energy Policy Act, the U.S. utility industry is
required to pay to the DOE, via a special assessment for the costs of the
decontamination and decommissioning of uranium enrichment plants operated by
the DOE, $150 million each U.S. Government fiscal year for 15 years
beginning in 1993. Each domestic utility will make a payment proportioned on
its past purchases from the DOE's Uranium Enrichment Enterprise. Each year,
the DOE will adjust the annual assessment using the Consumer Price Index.
The Energy Policy Act provides that the assessments are to be treated as
reasonable and necessary current costs of fuel, which costs shall be fully
recoverable in rates in all jurisdictions. The System's total share of the
estimated assessment was approximately $56.7 million. Management believes
that the DOE assessments against CL&P, WMECO, PSNH and NAEC will be
recoverable in future rates. Accordingly, each of these companies has
recognized these costs as regulatory asset, with corresponding obligation on
its balance sheet.
Costs associated with nuclear plant operations include amounts for
disposal of nuclear wastes, including spent fuel, and for the ultimate
decommissioning of the plants. The System companies include in their nuclear
fuel expense spent fuel disposal costs accepted by the DPUC, the NHPUC and
the DPU in rate case or fuel adjustment decisions. Spent fuel disposal costs
are also reflected in wholesale charges. Such provisions include
amortization and recovery in rates of previously unrecovered disposal costs
of accumulated spent nuclear fuel.
HIGH-LEVEL RADIOACTIVE WASTES
Under the Nuclear Waste Policy Act of 1982, the DOE is required to
design, license, construct and operate a permanent repository for high level
47
radioactive wastes and spent nuclear fuel. The act requires the DOE to
provide, beginning in 1998, for the disposal of spent nuclear fuel and high
level radioactive waste from commercial nuclear plants through contracts with
the owners and generators of such waste. The System companies have entered
into such contracts with the DOE with respect to Millstone 1, 2 and 3 and
Seabrook 1, and have been advised that the Yankee companies have entered into
similar contracts.
The DOE has established disposal fees to be paid to the federal
government by electric utilities owning or operating nuclear generating
units. The System companies have been paying for such services for fuel
burned starting in April 1983 on a quarterly basis since July 1983 in
accordance with the contracts; the DPUC, the NHPUC and the DPU permit the fee
to be recovered through rates.
The disposal fee for fuel burned before April 1983 (previously burned
fuel) is determined in accordance with a fee structure based on fuel burnup.
Under the contract payment option selected, the System companies anticipate
making payment to the DOE for disposal of previously burned fuel just before
the first delivery of spent fuel to the DOE. That payment obligation is not
a funded obligation. The liability under the selected payment option for
previously burned fuel, including interest, through December 31, 1993, and
the amounts recovered through rates for previously burned fuel through the
end of 1993 for Millstone 1 and 2, are as follows:
Previously Burned Fuel Liability, Amounts Recovered for Previously
Including Interest, Thru 12/31/93 Burned Fuel Thru 12/31/93
(Millions)
CL&P $136.1 $134.5
WMECO 31.9 32.3
Total $168.0 $166.8
Because Millstone 3 and Seabrook 1 went into service after 1983, there
is no previously burned fuel liability for those units.
In return for payment of the fees prescribed by the Nuclear Waste Policy
Act, the federal government is to take title to and dispose of the utilities'
high level wastes and spent nuclear fuel beginning no later than 1998. Until
the federal government begins receiving such materials, operating nuclear
generating plants will need to retain high-level wastes and spent fuel on-site
or make some other provisions for their storage. With the addition of new
storage racks or through fuel consolidation, storage facilities for Millstone
3 and CY are expected to be adequate for the projected life of the units. With
the storage facilities for Millstone 1 and 2 are expected to be adequate
(maintaining the capacity to accommodate a full-core discharge from the reactor)
until 2000. Fuel consolidation, which has been licensed for Millstone 2, could
provide adequate storage capability for the projected lives of Millstone 1 and
2. In addition, other licensed technologies, such as dry storage casks or
on-site transfers, are being considered to accommodate spent fuel storage
requirements. With the addition of new racks, Seabrook 1 is expected to have
spent fuel storage capacity until at least 2010.
Under the terms of a license amendment approved by the NRC in 1984, MY's
present storage capacity of the spent fuel pool at the unit will be reached
in 1999, and after 1996 the available capacity of the pool will not
accommodate a full-core removal. After consideration of available
technologies, MYAPC elected to provide additional capacity by replacing the
fuel racks in the spent fuel pool at the unit and, on January 25, 1993, filed
with the NRC seeking authorization to implement the plan. MYAPC believes
48
that the replacement of the fuel racks, if approved, will provide adequate
storage capacity through the unit's licensed operating life. While no
intervention has occurred, MYAPC cannot predict with certainty whether the
NRC authorization will be granted or whether or to what extent the storage
capacity limitation at the unit will affect the operation of the unit or the
future cost of disposal.
Under the terms of a license amendment approved by the NRC in 1991, the
storage capacity of the spent fuel pool at VY is expected to be reached in
2003, and the available capacity of the pool is not expected to be able to
accommodate a full-core removal after 1998.
Because the Yankee Rowe plant was permanently shut down effective
February 26, 1992, YAEC is planning to construct a temporary facility to
store the spent nuclear fuel produced by the Yankee Rowe plant over its
operating lifetime until that fuel is removed by the DOE. See "Electric
Operations - Nuclear Generation - Decommissioning" for further information on
the closing and decommissioning of Yankee Rowe.
LOW-LEVEL RADIOACTIVE WASTES
Disposal costs for low-level radioactive wastes (LLRW) have continued to
rise in recent years despite significant reductions in volume. Approximately
$7.65 million was spent on LLRW disposal for the Millstone units and CY in
1993.
In accordance with the provisions of the federal Low-Level Radioactive
Waste Policy Act of 1980, as amended (the Waste Policy Act), on December 31,
1992 the disposal site at Beatty, Nevada closed, and the Richland, Washington
facility closed to disposal of LLRW from outside its compact region. During
1992, the Barnwell, South Carolina site announced its intention to remain
open for disposal of out-of-region LLRW until June 30, 1994. In November
1992, the Northeast Compact commission entered into an agreement with the
Southeast Interstate Low-Level Radioactive Waste Management Compact (the
Southeast Compact) commission providing for continued access to the Barnwell
facility until June 30, 1994 by Connecticut LLRW generators, and the System
agreed to pay, in addition to disposal fees, an access fee of $220 per cubic
foot, with a minimum of $4.73 million, for the right to dispose of LLRW at
Barnwell during this period.
The Connecticut Hazardous Waste Management Service (the Service), a
state quasi-public corporation, is charged with coordinating the
establishment of a facility for disposal of LLRW originating in Connecticut.
In June 1991, the Service announced that it had selected three potential
sites in north-central Connecticut for further study. The Service's
announcement provoked intense controversy in the affected municipalities and
resulted in legislative action to stop the selection process. On February 1,
1993, the Service presented the legislature with a new site selection plan
under which communities are urged to volunteer a site for a facility in
return for financial and other incentives. The volunteer process is being
continued in 1994. The Service's activities in this regard are funded by
assessments on Connecticut's LLRW generators. The System was assessed
approximately $1.8 million for the state's 1992-1993 fiscal year. Due to the
change to a volunteer process, there was no assessment for the 1993-1994
fiscal year and the state projects no assessment for the 1994-1995 and
1995-1996 fiscal years.
49
The System has plans to acquire or construct additional LLRW storage
capacity at the Millstone and CY sites to provide for temporary storage of
LLRW should that become necessary. The System can manage its Connecticut
LLRW by volume reduction, storage or shipment at least through 1999.
Management cannot predict whether and when a disposal site will be designated
in Connecticut.
Since January 1, 1989, the State of New Hampshire has been barred from
shipping Seabrook LLRW to the operating disposal facilities in South
Carolina, Nevada and Washington for failure to meet the milestones required
by the Waste Policy Act. Seabrook 1 has never shipped LLRW but has capacity
to store at least five years' worth of the LLRW generated on-site, with the
capability to expand this on-site capacity if necessary. The Seabrook
station accrued approximately $1.3 million in off-site disposal costs in
1993. New Hampshire is pursuing options for out-of-state disposal of LLRW
generated at Seabrook.
Massachusetts and Vermont have arranged for continued access to the
Barnwell facility until mid-1994 for the nuclear waste generators in their
states. YAEC is currently disposing of its LLRW at the Barnwell facility.
MY has been storing its LLRW on-site since January 1993. VY and MY each has
on-site storage capacity for at least five years' production of LLRW from its
respective plants. Maine and Vermont are in the process of finalizing an
agreement with the state of Texas to provide access to a facility that will
be developed in that state.
DECOMMISSIONING
The System's most recent comprehensive site-specific updates of the
decommissioning costs for each of the three Millstone units were completed in
1992 and for Seabrook was completed in 1991. The recommended decommissioning
method reflected in the cost estimates continues to be immediate and complete
dismantlement of those units at their retirement. The table below sets forth
the estimated Millstone and Seabrook decommissioning costs for the System
companies. The estimates are based on the latest site studies, escalated to
December 31, 1993 dollars, and include costs allocable to NAEC's share of
Seabrook recently acquired from VEG&T.
CL&P PSNH WMECO NAEC NU System
(Millions)
Millstone 1 $312.5 $ - $ 73.3 $ - $385.8
Millstone 2 251.0 - 58.9 - $309.9
Millstone 3 223.0 12.0 51.6 - 286.6
Seabrook 1 14.9 - - 131.7 146.6
Total $801.4 $12.0 $183.8 $131.7 $1,128.9
Pursuant to Connecticut law, CL&P has periodically filed plans with the
DPUC for financing the decommissioning of the three Millstone units. In
1986, the DPUC approved the establishment of separate external trusts for the
currently tax-deductible portions of decommissioning expense accruals for
Millstone 1 and 2 and for all expense accruals for Millstone 3. In its 1993
CL&P multi-year rate case decision, the DPUC allowed CL&P's full
decommissioning estimate for the three Millstone units to be collected from
customers. This estimate includes an approximately 16 percent contingency
factor for each unit. The estimated aggregate cost of decommissioning the
Millstone units is $1.1 billion in December 1993 dollars.
WMECO has established independent trusts to hold all decommissioning
expense collections from customers. In its 1990 WMECO multi-year rate case
decision, the DPU allowed WMECO's decommissioning estimate for the three
50
Millstone units ($840 million in December 1990 dollars) to be collected from
customers. Due to the settlement in the 1992 WMECO rate case, the aggregate
decommissioning estimate for the three Millstone units remains unchanged.
The decommissioning cost estimates for the Millstone units are reviewed
and updated regularly to reflect inflation and changes in decommissioning
requirements and technology. Changes in requirements or technology, or
adoption of a decommissioning method other than immediate dismantlement,
could change these estimates. CL&P, PSNH and WMECO attempt to recover
sufficient amounts through their allowed rates to cover their expected
decommissioning costs. Only the portion of currently estimated total
decommissioning costs that has been accepted by regulatory agencies is
reflected in rates of the System companies. Although allowances for
decommissioning have increased significantly in recent years, ratepayers in
future years will need to increase their payments to offset the effects of
any insufficient rate recoveries in previous years.
New Hampshire enacted a law in 1981 requiring the creation of a
state-managed fund to finance decommissioning of any units in that state. In
1992, the New Hampshire Nuclear Decommissioning Financing Committee (NDFC)
established approximately $323 million (in 1991 dollars) as the
decommissioning cost estimate for immediate and complete dismantlement of
Seabrook 1 upon its retirement. On March 10, 1993, FERC approved this
estimate. The estimated total decommissioning cost for Seabrook 1 is $366
million in December 1993 dollars.
The NHPUC is authorized to permit the utilities subject to its
jurisdiction that own an interest in Seabrook 1 to recover from their
customers on a per-kilowatt-hour basis amounts paid into the decommissioning
fund over a period of years. NAEC's costs for decommissioning are billed by
it to PSNH and recovered by PSNH under the Rate Agreement. Under the Rate
Agreement, PSNH is entitled to a base rate increase to recover increased
decommissioning costs. See "Rates - New Hampshire Retail Rates" for further
information on the Rate Agreement.
North Atlantic submitted its annual update of the 1991 Decommissioning
Study and Funding Schedule to the NDFC on March 31, 1993. It included an
updated estimate for the prompt removal and dismantling of Seabrook station
in 2026 at the end of licensed life and a review of the assumptions on
inflation and rate-of-return on fund investments used to develop the joint
owner contribution schedule. North Atlantic concluded that the 1991
estimate, escalated in accordance with these assumptions to 1993 dollars, is
still valid. Although a schedule has not been set by the NDFC, public
hearings on the decommissioning estimate and funding schedule will probably
be held in the third quarter of 1994.
The new Investment Guidelines for the Seabrook Nuclear Decommissioning
Financing Fund, which were approved by the New Hampshire State Treasurer and
would have gone into effect on November 1, 1993, have been put on hold by a
recent decision of FERC. The October 20, 1993 FERC order effectively
reinstated the so-called "black lung" investment restrictions on
decommissioning funds subject to its jurisdiction, although Congress, in the
Energy Policy Act, had repealed the IRS regulation which mandated them.
Under these restrictions, investments are limited to public debt securities
that are fully backed by the U.S. government, tax exempt obligations of state
or local governments and time deposits with a bank or insured credit union.
The new guidelines would allow equity holdings by the joint owners of
Seabrook, beginning with a limit of 10 percent in 1994 and gradually
increasing to a limit of 40 percent in 1997. The strategies also call for a
gradual reduction in the equity position as the plant approaches the end of
51
its licensed life. Implementation of new investment guidelines for the
Millstone units and CY have also been delayed because of the FERC decision.
The System is party to petitions filed with FERC in November 1993, seeking
reconsideration of the FERC decision.
As of December 31, 1993, the balances (at cost) in the external
decommissioning trust funds were as follows:
Millstone 1 Millstone 2 Millstone 3 Seabrook 1
(Millions of Dollars)
CL&P........... $70.4 $45.5 $30.9 $ .9
PSNH........... * * 1.5 *
WMECO.......... 24.0 16.5 8.6 *
NAEC........... * * * 7.9
_____ _____ _____ ____
Total........ $94.4 $62.0 $41.0 $8.8
*PSNH has no ownership interest in the Millstone 1 and 2 units. WMECO
has no ownership interest in Seabrook 1. NAEC's only ownership interest
is in Seabrook 1.
YAEC, MYAPC, VYNPC and CYAPC are all collecting revenues for
decommissioning from their power purchasers. The table below sets forth the
estimated decommissioning costs of the Yankee units for the System companies.
The estimates are based on the latest site studies, escalated to December 31,
1993 dollars. For information on the equity ownership of the System
companies in each of the Yankee units, see "Electric Operations - Nuclear
Generation - General."
CL&P PSNH WMECO NU System
(Millions)
CY $117.3 $17.0 $32.3 $166.6
MY 38.8 16.2 9.7 64.7
VY * * * *
Yankee Rowe 68.7 19.6 19.6 107.9
______ _____ _____ ______
Total $255.3 $65.6 $69.6 $390.5
*VYNPC is currently reestimating the cost of decommissioning VY. Based
on recent estimates for comparable units, the projected cost is expected to
fall into the $300 - $350 million range. The System's share of these
costs is expected to be between $48 million and $56 million. The results of
the VYNPC study are expected to be available in the spring of 1994.
In June 1992, YAEC filed a rate filing to obtain FERC authorization for
an increase in rates to cover the costs of closing and decommissioning the
Yankee Rowe plant and for the recovery of the remaining investment in the
unit over the remaining period of its NRC operating license. At December 31,
1993, the System's share of these estimated costs was approximately $132.8
million. A settlement agreement among YAEC, the FERC staff and intervenors
to the FERC proceeding addressing all issues has been filed with and accepted
by FERC. YAEC has submitted its decommissioning plan to the NRC for
approval.
Due to the unexpected continued availability of the low level waste
disposal facility in Barnwell, South Carolina, YAEC requested NRC permission
to use decommissioning funds prior to final NRC approval of the complete
52
plan. On April 16, 1993, the NRC approved YAEC's request to use funds for
removal of the steam generators, pressurizer and reactor internals. By
December 31, 1993, all major components were successfully disposed of at
Barnwell and only a small number of internals shipments remain to be made.
YAEC will continue its dismantling of the plant in 1994. The NRC's
review of the decommissioning plan is expected to be completed by December
31, 1994 at which time YAEC will, depending upon the availability of a low
level waste site, move to completely dismantle the facility.
CYAPC accrues decommissioning costs on the basis of immediate
dismantlement at retirement. The most current estimated decommissioning
cost, based on a 1992 study, is approximately $339.9 million in year-end 1993
dollars. As a result of a 1987 study approved by FERC, CYAPC has been
accruing expenses based on an estimated decommissioning level of $130
million. On October 30, 1992, CYAPC filed with FERC a proposed change in
rates to recover the increase in estimated decommissioning costs. On May 11,
1993, FERC approved a settlement agreement allowing a decommissioning
estimate of $294.2 million (in July 1992 dollars) to be recovered in rates
effective June 1, 1993. See "Electric Operations - Nuclear Generation -
Operations - Yankee Units."
In 1984, CYAPC established an independent irrevocable decommissioning
trust fund, which was modified for tax purposes in 1987 to create two trusts.
Each month, CYAPC's sponsors are billed for their proportionate share of
decommissioning expense as allowed by FERC and payments are made directly to
the trust. The combined balance of the trusts at December 31, 1993 was
$137.8 million. The trust balances must be used exclusively to discharge
decommissioning costs as incurred.
MYAPC estimates the cost of decommissioning MY at $323.7 million in
December 31, 1993 dollars based on a study completed in July 1993.
NON-UTILITY BUSINESSES
GENERAL
In addition to its core electric utility businesses in Connecticut, New
Hampshire and Massachusetts, in recent years the System has begun a
diversification of its business activities into two energy-related fields:
private power development and energy management services.
PRIVATE POWER DEVELOPMENT
In 1988, NU organized a new subsidiary corporation, Charter Oak, through
which the System participates as a developer and investor in domestic and
international private power projects. With the passage of the Energy Policy
Act, Charter Oak can invest in cogeneration and small power production (SPP)
facilities anywhere in the world. This legislation also expands Charter
Oak's permissible involvement in exempt wholesale generators (EWGs) to
include development, construction and ownership. Management currently does
not permit Charter Oak to invest in facilities which are located within the
System service territory or to sell its electric output to any of the System
electric utility companies. For a discussion of certain highlights of the
Energy Policy Act relating to EWGs, see "Regulatory and Environmental Matters
- - Public Utility Regulation."
53
Under the Public Utility Regulatory Policies Act of 1978 (PURPA), as a
subsidiary of an electric utility holding company, Charter Oak is effectively
limited to no more than 50 percent ownership in a QF within the United
States. To work within this constraint, Charter Oak has made strategic
alliances with several experienced developers to pursue development
opportunities. Through these relationships, Charter Oak is pursuing
development opportunities nationwide and internationally.
Although Charter Oak has no full-time employees, eight NUSCO employees
are dedicated to Charter Oak activities on a full-time basis. Other NUSCO
employees provide services as required.
Charter Oak owns, through a wholly-owned special purpose subsidiary, a
ten percent equity interest in a 220 MW natural gas-fired combined cycle
cogeneration QF in Texas which provides steam to Campbell Soup Company's
Paris, Texas manufacturing facility and electricity to Texas Utilities
Electric Company. Charter Oak also owns 56 MW of the 1,875 MW Teesside
natural gas-fired cogeneration facility in the United Kingdom. Charter Oak
is pursuing other project development opportunities in both the domestic and
international markets with a combined capacity over 1,000 MW. Charter Oak is
currently participating in the development stage of projects in Texas, the
West Coast, the Midwest, Latin America and the Pacific Rim.
NU's total investment in Charter Oak was approximately $23.0 million as
of December 31, 1993. NU, Charter Oak and its subsidiary, Charter Oak Energy
Development, have received approval from the SEC to increase NU's authorized
investment in Charter Oak to up to $100 million and to increase Charter Oak's
authorized investment in COE Development to up to $100 million for
preliminary development activities in QFs, IPPs, EWGs and foreign utility
companies.
ENERGY MANAGEMENT SERVICES
In 1990, NU organized a new subsidiary corporation, HEC, which acquired
substantially all of the assets and personnel of an existing, non-affiliated
energy management services company. In general, the energy management
services that HEC provides are performed for customers pursuant to contracts
to reduce the customers' overall energy consumption and reduce energy costs
and/or conserve energy resources. HEC also provides demand side management
consulting services to utilities. HEC's energy management and consulting
services are directed primarily to the commercial, industrial and
institutional markets and utilities in New England and New York, although the
SEC's order under the 1935 Act that authorized NU to operate HEC also permits
HEC to serve customers outside that area, so long as over half of its
revenues are attributable to customers in New England and New York.
NU's initial equity investment in HEC was approximately $4 million and
NU has made additional capital contributions of approximately $300,000
through March 1, 1994. Under the SEC order authorizing HEC's participation
in the Money Pool, HEC may borrow up to $11 million from the Money Pool. At
December 31, 1993, HEC had $2.9 million outstanding from its borrowings from
the Money Pool.
54
REGULATORY AND ENVIRONMENTAL MATTERS
PUBLIC UTILITY REGULATION
NU is registered with the SEC as an electric utility holding company
under the 1935 Act. Under the 1935 Act, the SEC has jurisdiction over NU and
its subsidiaries with respect to, among other things, securities issues,
sales and acquisitions of securities and utility assets, intercompany loans,
services performed by and for associated companies, accounts and records,
involvement in non-utility operations and dividends.
The Energy Policy Act amended the 1935 Act to give registered holding
companies, like NU, broadened authority to invest in small power production
facilities qualifying under PURPA and to own a new class of IPPs known as
EWGs. An EWG is an entity exclusively in the business of owning and/or
operating generating facilities that sell electricity at wholesale. EWGs are
exempt from most regulation under the 1935 Act. A registered holding company
may also invest in foreign utility companies with SEC approval. EWGs,
however, are subject to state regulation with respect to siting and financial
regulation to prevent cross-subsidies and self-dealing among utilities and
affiliated EWGs.
The Energy Policy Act also amended the Federal Power Act to authorize
FERC to order wholesale transmission wheeling services, including the
enlargement of transmission capacity necessary to provide such services,
unless such transmission would unreasonably impair the reliability of the
electric systems affected or the utility ordered to provide transmission is
unable to obtain necessary governmental approvals or property rights. Rates
for transmission ordered under the Energy Policy Act are to be designed to
protect the wheeling utilities' existing customers. FERC's authority to
order wheeling does not extend to retail wheeling, and FERC may not issue a
wheeling order that is inconsistent with state franchise laws.
CL&P is subject to regulation by the DPUC, which has jurisdiction over,
among other things, retail rates, accounting procedures, certain dispositions
of property and plant, mergers and consolidations, securities issues,
standards of service, management efficiency and construction and operation of
generation, transmission and distribution facilities. Because of their
ownership interests in the Millstone units, PSNH and WMECO are also subject
to the jurisdiction of the DPUC with respect to their activities in
Connecticut and their securities issues.
PSNH and NAEC are subject to regulation by the NHPUC, which has
jurisdiction over retail rates, accounting procedures, certain dispositions
of property and plant, quality of service, securities issues, acquisitions of
securities of other utilities, mortgages of property, declaration of
dividends, contracts with affiliates, management efficiency, construction and
operation of generation, transmission and distribution facilities, integrated
resource planning and other matters. Although the Seabrook Power Contract
between PSNH and NAEC is a wholesale contract subject to the jurisdiction of
FERC, pursuant to the terms of the Rate Agreement, the NHPUC has the right to
review the prudence of costs incurred by NAEC to determine whether they
should be passed on to ratepayers through FPPAC, and the NHPUC and the State
of New Hampshire have additional rights and limited jurisdiction over certain
other Seabrook Power Contract issues.
NU and its subsidiaries are subject to the general supervision of the
NHPUC with respect to all dealings with PSNH and NAEC. Based upon PSNH's
ownership of generating and transmission facilities in Maine and transmission
55
and hydroelectric facilities in Vermont, PSNH is also subject to limited
regulatory jurisdiction in those states.
WMECO is subject to regulation by the DPU, which has jurisdiction over
retail rates, accounting procedures, quality of service, contracts for the
purchase of electricity, mergers, securities issues and other matters. The
DPU has adopted regulations that provide for DPU preapproval of utility plant
construction, procurement of non-utility generation (QFs and IPPs), and C&LM
programs. HWP is subject to regulation by the DPU with respect to certain
contracts and quality of service. NU and its subsidiaries are subject to the
general supervision of the DPU with respect to all dealings with WMECO and
HWP.
CL&P is subject to the jurisdiction of the NHPUC for limited purposes in
connection with its ownership interest in Seabrook.
CL&P, PSNH, WMECO, NAEC and HWP are public utilities under Part II of
the Federal Power Act and are subject to regulation by the FERC with respect
to, among other things, interconnection and coordination of facilities,
wholesale rates and accounting procedures.
The System incurs substantial capital expenditures and operating
expenses to identify and comply with environmental, energy, licensing and
other regulatory requirements, including those described in the following
subsections, and it expects to incur additional costs to satisfy further
requirements in these and other areas of regulation. Because of the
continually changing nature of regulations affecting the System, the total
amount of these costs is not determinable.
The System has active auditing programs addressing a variety of legal
and regulatory areas, including an environmental auditing program. To the
extent it is determined that a System operation or facility is not in full
compliance with applicable environmental or other laws or regulations, the
System attempts to resolve non-compliance through the auditing response
process or other management processes. Compliance with existing and proposed
regulations also affects the time needed to complete new facilities or to
modify present facilities, and it affects System companies' rates, sales,
revenues and net income, all in ways that may be substantial but are not
readily calculable.
NRC NUCLEAR PLANT LICENSING
The operators of the Millstone 1, 2 and 3 units, the CY, MY and VY
and Seabrook 1 all have full term full power operating licenses from the NRC.
The following table sets forth the current license expiration dates for each
unit:
Operating License
Unit Expiration Date (*)
Millstone 1 October 6, 2010
Millstone 2 July 31, 2015
Millstone 3 November 25, 2025
Seabrook 1 October 17, 2026
CY June 29, 2007
MY October 21, 2008
VY March 21, 2012
_________________________
(*) For all units except Seabrook 1 and MY, the current operating
56
license expires 40 years from the date the operating licensee was issued.
The Seabrook license expires 40 years from the date on which the NRC issued a
license for the unit to load nuclear fuel, which was about 3 1/2 years before
the full power operating license was issued. MY's operating license expires
40 years from the date the construction license was issued, which was about
four years before the operating license was issued. The System will
determine at the appropriate time whether to seek to recapture these periods
and add them to the operating license terms for those units.
YAEC had been working with the NRC on a preliminary analysis to extend
the license expiration date for Yankee Rowe from 2000 to 2020, but that
effort was suspended when the unit was shut down for evaluation. YAEC
received a "possession only" license from the NRC in August 1992. See
"Electric Operations - Nuclear Generation - Operations - Yankee Units" for
further information on the decision to shut down the Yankee Rowe unit
permanently.
Currently the NRC issues 40-year operating licenses to nuclear units. In
December 1991, the NRC issued a final rule that establishes the requirements
that must be met by an applicant for renewal of a nuclear power plant
operating license, the information that must be submitted to the NRC for
review, so that the agency can determine whether those requirements have in
fact been met, and the application procedures that must be used to obtain an
extension of a nuclear plant operating license beyond 40 years. A renewal
license may be granted for not more than 20 years beyond the current licensed
life. The licensing requirements for a nuclear plant during the renewal term
will consist of the plant's current licensing requirements and new
commitments to monitor, manage, and correct age-related degradation of plant
systems, structures, and components that is unique to the license renewal
term but will not encompass the higher licensing standards imposed on new
plants. An opportunity for a formal public hearing is provided to permit
interested persons to raise contentions on the adequacy of the renewal
applicant's proposals to address age-related degradation and compliance with
applicable requirements relating to an environmental impact statement. The
NRC rule was challenged on antitrust grounds and upheld in the District of
Columbia Court of Appeals.
ENVIRONMENTAL REGULATION
GENERAL
The National Environmental Policy Act (NEPA) requires that detailed
statements of the environmental effects of major federal actions be prepared
by federal agencies. Major federal actions can include licenses or permits
issued to the System by FERC, NRC and other federal agencies for construction
or operation of generation and transmission facilities. NEPA requires that
federal licensing agencies make an independent evaluation of the alternatives
and environmental impacts of the proposed actions.
Under Connecticut law, major generation or transmission facilities may
not be constructed or significantly modified without a certificate of
environmental compatibility and public need from the Connecticut Siting
Council (CSC). After public hearings, CSC may issue the certificate, which
addresses the public need for the facility and probable environmental impact
of the facility and may impose specific conditions for protection of the
environment.
In New Hampshire, construction of major new generation or transmission
facilities, or sizeable additions to existing facilities, requires a
57
certificate of site and facility from the New Hampshire Site Evaluation
Committee (NHSEC) and NHPUC under the state's energy facility siting law. In
addition to review by all state agencies having jurisdiction over any aspect
of the construction or operation of the proposed facility, the law requires
full review by NHSEC of the environmental impact of the proposed site or
route after allowing for public comment and conducting public hearings.
Issuance of a certificate requires, among other findings, a finding that the
proposed site and facility will not have an unreasonable adverse effect on
environmental values.
Massachusetts law requires all state agencies to determine the
environmental impact of any projects proposed by private companies requiring
state permits, or involving state funding or participation. Massachusetts
state agencies are required to make a finding that all feasible measures have
been taken to avoid or minimize the environmental impact of the project. In
certain instances, Massachusetts law also requires the preparation and
dissemination, among various state agencies, of an environmental impact
report for the proposed project. Major generation or transmission facilities
may not be constructed or significantly modified without approval by the
Massachusetts Energy Facilities Siting Board; new transmission facilities
also require approval by the DPU.
The System anticipates that additional environmental legislation will be
seriously considered by Congress and state legislatures in the coming years.
The issues of global warming, air pollution, hazardous waste handling and
disposal and water pollution control are receiving a significant amount of
public and political attention and are likely areas for federal or state
legislative activity in the near future. Until and unless any such
legislation is enacted and implementing regulations are issued, the effects
on the System cannot be determined. Compliance with environmental laws and
regulations, particularly air and water pollution control requirements, may
limit operations or require substantial investments in new equipment at
existing facilities. Such laws and regulations may also require substantial
investments that are not included in the estimated construction budget set
forth herein. See "Resource Plans" for a discussion of the System's
construction plans.
SURFACE WATER QUALITY REQUIREMENTS
The federal Clean Water Act (CWA) provides that every "point source"
discharger of pollutants into navigable waters must obtain a National
Pollutant Discharge Elimination System (NPDES) permit from EPA specifying the
allowable quantity and characteristics of its effluent. To obtain an NPDES
permit, a discharger must meet technology-based and biologically-based
effluent standards and must also demonstrate that its effluent will not cause
a violation of established standards for the quality of the receiving waters.
Connecticut, Massachusetts and New Hampshire regulations contain similar
permit requirements and these states can impose more stringent requirements.
All of the System's steam-electric generating plants have NPDES permits
in effect. Any of the permits may be reopened to incorporate more stringent
regulations adopted by EPA or state environmental agencies. Compliance with
NPDES and state water discharge permit requirements has necessitated
substantial expenditures and may require further expenditures because of
additional requirements that could be imposed in the future.
The CWA requires EPA and state permitting authorities to approve the
cooling water intake structure design and thermal discharge of steam-electric
generating plants. All System steam-electric plants have received these
58
approvals. In the renewed discharge permit for the three Millstone nuclear
units, issued in 1992, CDEP included a condition requiring a feasibility
study of various structural or operational modifications of the cooling
water intake system to reduce the entrainment of winter flounder larvae.
This study was submitted to CDEP in January 1993 and includes analyses of the
costs and benefits of each alternative considered. The costs ranged from
$1.8 million to $519 million. The study concluded that the substantial
incremental costs of each of the alternatives studied are not justified by
the small benefits to the winter flounder population. In a letter dated
January 14, 1994, CDEP approved the report requiring only that Millstone
station continue efforts to schedule refueling outages to coincide with the
period of high winter flounder larvae abundance and that the station continue
to monitor the Niantic River winter flounder population in accordance with
existing NPDES permit conditions.
Merrimack station's NHDES discharge permit requires site work to isolate
adjacent wetlands from the station's waste water system. Plans have been
approved by the New Hampshire Department of Environmental Services (NHDES),
and PSNH is now preparing a permit application to begin construction. The
new permit may require PSNH to perform further biological studies because
significant numbers of migratory fish are being restored to lower reaches of
the Merrimack River. Should the studies indicate that Merrimack Station's
once-through cooling system interferes with the establishment of a balanced
aquatic community, PSNH could be required to construct a partially enclosed
cooling water system for Merrimack station. The amount of capital
expenditures relating to the foregoing cannot be determined at this time.
However, if such expenditures were to be required, they would likely be
substantial and a reduction of Merrimack station's net generation capability
could result.
The ultimate cost impact of the CWA and state water quality regulations
on the System cannot be estimated because of uncertainties such as the impact
of changes to the effluent guidelines or water quality standards. Additional
modifications, in some cases extensive and involving substantial cost, may
ultimately be required for some or all of the System's generating facilities.
In response to several major oil spills in recent years, Congress passed
the Oil Pollution Act of 1990 (OPA 90). OPA 90 sets out the requirements for
facility response plans and periodic inspections of spill response equipment
at certain facilities. The requirements apply to facilities that can cause
substantial harm or significant and substantial harm to the environment by
discharging oil or hazardous substances into the navigable waters of the
United States and adjoining shorelines. Pursuant to OPA 90, EPA has
authority to regulate non-transportation-related fixed onshore facilities and
the Coast Guard has the authority to regulate transportation-related onshore
facilities.
Response plans were filed for all System facilities believed to be
subject to this requirement. EPA and the Coast Guard have reviewed these
plans and accepted the information provided in them as certification of
contracted resources for response to a worst case discharge. The Coast Guard
expects to complete its review process by February 17, 1995, and EPA by
August 18, 1995. Both agencies have authorized continued operation
pending final plan approval.
OPA 90 includes limits on the liability that may be imposed on persons
deemed responsible for release of oil. The limits do not apply to oil spills
caused by negligence or violation of laws or regulations. OPA 90 also does
not preempt state laws regarding liability for oil spills. In general, the
laws of the states in which the System owns facilities and through which the
59
System transports oil could be interpreted to impose strict liability for
the cost of remediating releases of oil and for damages caused by releases.
The System and its principal oil transporter currently carry a total of $890
million in insurance coverage for oil spills.
AIR QUALITY REQUIREMENTS
Under the federal Clean Air Act, EPA has promulgated national ambient
air quality standards for certain air pollutants, including sulfur dioxide,
particulate matter, nitrogen oxides and ozone. EPA has approved a
Connecticut implementation plan prepared by CDEP, a New Hampshire plan
prepared by NHDES and a Massachusetts plan prepared by MDEP for the
achievement and maintenance of these standards. The Connecticut, New
Hampshire and Massachusetts plans impose limits on the amounts of various
airborne pollutants that can be emitted from utility boilers.
Under the Clean Air Act, emissions from new or substantially modified
sources are limited by new source performance standards and very strict
technology-based emission limits.
The Clean Air Act Amendments of 1990 (CAAA) made extensive revisions and
additions to the Clean Air Act and imposed many stringent new requirements on
air emissions sources. The CAAA contains provisions further regulating
emissions of sulfur dioxide (SO2) and nitrogen oxides (NOX) for the purpose
of controlling acid rain, toxic air pollutants and other pollutants,
requiring installation of continuous emissions monitors (CEMs) and expanding
permitting provisions.
Existing and additional federal and state air quality regulations could
hinder or possibly preclude the construction of new, or modification of
existing, fossil units in the System's service area, could raise the capital
and operating cost of existing units, and may affect the operations of the
System's work centers and other facilities. The ultimate cost impact of
these requirements on the System cannot be estimated because of uncertainties
about how EPA and the states will implement various requirements of the CAAA.
NOX. The CAAA identifies NOX emissions as a precursor of ambient ozone
for the northeastern region of the United States, much of which is in
violation of the ambient air quality standard for ozone. Pursuant to the
CAAA, Connecticut, New Hampshire and Massachusetts must implement plans to
address ozone nonattainment. Probable actions include additional NOX
controls that could impose costs on the System's generating units. The
capital cost to comply with 1995's anticipated Phase I requirements is
expected to approximate $10 million for CL&P, $11 million for PSNH, $1
million for WMECO and $3 million for HWP, while compliance costs for Phase
II, effective in 1999, could be substantially higher depending on the level
of NOX reductions required. Costs for meeting the 1999 NOX emission
reduction requirements cannot be estimated at this time.
Connecticut and New Hampshire have not as yet issued final regulations
to implement NOX reduction requirements, although both have previously
indicated that they will attempt to achieve NOX reduction requirements at the
lowest possible costs. The System companies are in the process of reviewing
compliance strategies and costs and of providing input to state environmental
regulators. Massachusetts issued final NOX Reasonably Available Control
Technology (RACT) rules in September, 1993.
In December 1993, PSNH reached a revised agreement regarding NOX
emissions with various environmental groups and the New Hampshire Business
60
and Industrial Association. The agreement has been submitted to the New
Hampshire Air Resources Division (NHARD) in the form of proposed regulations.
The agreement provides for aggressive unit specific NOX emission rate limits
for PSNH's generating facilities, effective May 31, 1995. The agreement no
longer requires a PSNH commitment to retire or repower Merrimack Unit 2 by
May 15, 1999, however more stringent emission rate limits equivalent to the
range of 0.1 to 0.4 pounds of NOX per million Btu are required for the unit
by that date.
PSNH recently received an amendment to its Permit to Operate for
Merrimack Unit 1 from NHARD to allow the testing of wood chips as a fuel.
Testing has begun and if it is successful it may assist PSNH in compliance
with the CAAA.
SO2. The CAAA mandates reductions in sulfur dioxide (SO2) emissions to
control acid rain. These reductions are to occur in two phases. First, high
SO2 emitting plants are required to reduce their emissions beginning January
1, 1995. The only System units subject to the Phase I reduction requirements
are PSNH's Merrimack Units 1 and 2. Management plans to meet the
requirements of both Phase I and Phase II by burning low sulfur fuels and
substituting (i.e. adding) Newington and Mt. Tom stations as Phase I units,
if allowed by EPA regulations.
On January 1, 2000, the start of Phase II, a nationwide cap of 8.9
million tons per year of utility SO2 emissions will be imposed and existing
units will be granted allowances to emit SO2. These allowances are freely
tradable. One allowance entitles a source to emit one ton of SO2 in a year.
No unit may emit more SO2 in a particular year than the amount for which it
has allowances. The System expects to be allocated allowances by EPA that
substantially exceed its expected SO2 emissions for 2000 and subsequent
years. In 1993, the System agreed to donate, subject to regulatory approval,
10,000 of its surplus SO2 allowances to the American Lung Association thereby
effectively preventing 10,000 tons of SO2 from being emitted into the
atmosphere. The System expects to be able to sell some of its surplus
allowances. The price of allowances depends on the market. The amount of
surplus allowances and the allocation of the revenues received from such
sales between ratepayers and shareholders have not been determined.
On February 15, 1993, as required by the CAAA, PSNH filed Phase I Acid
Rain Permit Applications for Merrimack Station. In addition, as allowed by
the CAAA, PSNH designated its Newington station unit, and HWP designated its
Mt. Tom unit, as conditional Phase I substitution units. EPA is currently
reviewing whether it will accept Newington and Mt. Tom as substitution units
and the number of allowances each will be awarded. All Phase I units,
including substitution units accepted by EPA, will be allocated SO2
allowances for the period 1995-1999.
On December 31, 1992, pursuant to Connecticut Public Act 92-106, CL&P
filed a report with the Energy and Public Utilities Committee of the
Connecticut General Assembly and the DPUC describing its plan for allocation
of revenues from sale of SO2 allowances. CL&P proposed that its shareholders
receive 20 percent of the proceeds from sales of allowances to compensate for
the risks they have taken to reduce CL&P's SO2 emissions and to provide
appropriate incentive to CL&P to sell allowances at the maximum price. In
1993 the DPUC approved a proposal by The United Illuminating Company (UI) to
grant an option to another utility for the purchase of SO2 allowances, and
ruled that shareholders would receive 15 percent of the proceeds from the
eventual sale. The DPUC opened a docket and held hearings to review the
reports filed by CL&P and UI. This review is addressing development of a
61
policy on allocation between shareholders and ratepayers of SO2 allowance
proceeds as well as CL&P's allowance donation.
CDEP's air quality regulations permit CL&P to burn 1.0 percent sulfur
oil at oil-fired generating stations in Connecticut, except that 0.5 percent
sulfur oil must be burned at Middletown station. Current CDEP policy
requires CL&P to use 0.5 percent or lower sulfur oil when replacing older
(1.0 percent sulfur oil fueled) plant auxiliary boilers needed for unit
start-up and plant space heating. The regulations also permit the burning of
coal with a sulfur content of up to 0.7 percent at CL&P's plants, or up
to 1.0 percent if a special permit is obtained.
New Hampshire air quality regulations permit PSNH to emit 55,150 tons of
SO2 annually. The New Hampshire acid rain control law required a 25 percent
reduction in SO2 emissions from the 1979-1982 baseline emissions at PSNH's
units, which has been achieved. Compliance with New Hampshire's acid rain
control law has brought PSNH very close to compliance with the SO2 emission
limits of Phase I of the CAAA. PSNH may need to install additional pollution
control equipment or use fuel with lower sulfur content in order to meet the
requirements of the CAAA.
The EPA has issued an order requiring modeling of the impact on ambient
air quality of SO2 emissions from Merrimack Station. Work on this study has
begun and the final results of the modeling are expected to be available in
mid-1995. If the modeling study indicates that compliance with the primary
ambient air quality standards for SO2 is not being achieved, additional
control strategies, possibly including the addition of emission control
devices or a higher stack, will be required. Management cannot at this time
predict the results of the modeling or estimate the cost of any additional
control strategies that may be required.
The Massachusetts air quality regulations permit HWP to burn 1.5 percent
sulfur coal with an ash content up to 9 percent at Mt. Tom Station. Coal
with a higher ash content can be burned with MDEP approval. Mt. Tom Station
is required to reduce sulfur emissions to the equivalent of 1.0 percent
sulfur oil if certain air quality monitors show levels of SO2 approaching
ambient air quality limits. WMECO's West Springfield station currently burns
1.0 percent sulfur oil or natural gas.
The Massachusetts acid rain control law requires MDEP to adopt
regulations to limit future sulfur dioxide emissions. These regulations
limit the allowable SO2 emissions from utility power plants and other major
fuel burning sources to 1.2 pounds per million BTUs averaged over all of the
System's Massachusetts plants, effective January 1, 1995. The System's
generating plants in Massachusetts on average emit approximately 1.9 pounds
of SO2 per million BTUs. The System expects to meet the new sulfur dioxide
limitation by using natural gas and lower sulfur oil and coal in its plants.
The System could incur additional costs for the lower sulfur fuels it may
burn to meet the requirements of this legislation.
Under the existing fuel adjustment clauses in Connecticut, New Hampshire
and Massachusetts, the System would be able to recover the additional fuel
costs of compliance with the CAAA and state laws from its customers.
Management does not believe that the acid rain provisions of the CAAA will
have a significant impact on the System's overall costs or rates due to the
very strict limits on SO2 emissions already imposed by Connecticut, New
Hampshire and Massachusetts and on NOX limitations imposed by Connecticut and
New Hampshire.
62
EPA, Connecticut, New Hampshire and Massachusetts regulations also
include other air quality standards, emission standards and monitoring, and
testing and reporting requirements that apply to the System's generating
stations. They require that new or modified fossil fuel-fired electric
generating units operate within stringent emission limits.
Air Toxics. Title III of the CAAA imposes new stringent discharge
limitations on hazardous air pollutants. EPA is required to study toxic
emissions and mercury emissions from power plants. Pending completion of
these studies, power plants are exempt from the hazardous air pollutant
requirements. Should EPA or Congress determine that power plant emissions
must be controlled to the same extent as emissions from other sources under
Title III, the System could be required to make substantial capital
expenditures to upgrade or replace pollution control equipment, but the
amount of these expenditures cannot be readily estimated.
Connecticut and New Hampshire have enacted, and Massachusetts is
considering, toxic air pollution regulations limiting emissions of numerous
substances that may extend beyond those regulated under federal law.
TOXIC SUBSTANCES AND HAZARDOUS WASTE REGULATIONS
PCBs. Under the federal Toxic Substances Control Act of 1976 (TSCA),
EPA has issued regulations that control the use and disposal of
polychlorinated biphenyls (PCBs). PCBs had been widely used as insulating
fluids in many electric utility transformers and capacitors before TSCA
prohibited any further manufacture of such PCB equipment. System companies
have taken numerous steps to comply with these regulations and have incurred
increased costs for disposal of used fluids and equipment that are subject to
the regulations. One disposal measure involves the System's burning of
some waste oil with a low level of PCB contamination (up to 500 parts per
million (ppm)) as supplemental fuel at CL&P's Middletown station Unit 3. EPA
and CDEP have approved this disposal method.
In general, the System sends fluids with concentrations of PCBs equal to
or higher than 500 ppm but lower than 8,500 ppm to an unaffiliated company to
dispose of using a chemical treatment process. Electrical capacitors that
contain PCB fluid are sent offsite to dispose of through burning in high
temperature incinerators approved by EPA. Currently, there are only four
such approved incinerators operating in the United States, which has resulted
in a sharp rise in the price of disposal through these facilities. The
System disposes of solid wastes containing PCBs in secure chemical waste
landfills. In 1993, the System incurred costs of approximately $450,000 for
disposal of materials at these facilities.
Asbestos. Federal, Connecticut, New Hampshire and Massachusetts
asbestos regulations have required the System to expend significant sums on
removal of asbestos including measures to protect the health of workers and
the general public and to properly dispose of asbestos wastes. Areas of the
System currently undergoing removal of asbestos include nuclear, fossil/hydro
production, transmission and distribution and facilities operations. The
System expects to expend approximately $3.4 million in 1994 on the removal of
asbestos in nuclear units, fossil and hydro generating stations and
buildings. Even greater costs are likely to be incurred annually in the
future if federal and state asbestos regulations become more stringent and
the System's need to remove asbestos grows.
RCRA. Under the federal Resource Conservation and Recovery Act of 1976,
as amended (RCRA), the generation, transportation, treatment, storage and
63
disposal of hazardous wastes are subject to EPA regulations. Connecticut,
New Hampshire and Massachusetts have adopted state regulations that parallel
RCRA regulations but in some cases are more stringent. A change in
interpretation of RCRA by EPA now requires that nuclear facilities obtain EPA
permits to handle radioactive wastes that are also hazardous under RCRA
(so-called mixed wastes). The notifications and applications required by
these regulations have been made by all units to which these regulations
apply. The procedures by which System companies handle, store, treat and
dispose of hazardous wastes are regularly revised, where necessary, to comply
with these regulations.
CL&P has discontinued operation of surface impoundments in its four
Connecticut wastewater treatment facilities used to treat hazardous waste.
This is because CL&P was unable to obtain variances from EPA to exempt the
facilities from the double lining requirement under the 1984 RCRA amendments.
CL&P has constructed replacement above-ground concrete tanks at an estimated
cost of approximately $22 million. It is expected that in early 1994, EPA
and DEP will approve clean closure for CL&P's Montville Station's
impoundment. Accordingly, CL&P will no longer be required to maintain
liability insurance or financial assurance for closure and post-closure for
this former impoundment site. EPA's final approval of the closure of the
remaining three surface impoundments is pending. The System estimates that
it will incur approximately $2 million in costs of monitoring and closure of
the container storage areas for these sites in the future, but the ultimate
amount will depend on EPA's final disposition.
Underground Storage Tanks. Federal and state regulations regulate
underground tanks storing petroleum products or hazardous substances. The
System has about 130 underground storage tanks that are used primarily for
gasoline, diesel, house-heating and fuel oil. To reduce its environmental
and financial liabilities, the System has begun implementing a policy calling
for the permanent removal of all non-essential underground vehicle fueling
tanks. Costs for this program are not substantial.
Hazardous Waste Liability. As many other industrial companies have done
in the past, System companies have disposed of residues from operations by
depositing or burying such materials on-site or disposing of them at off-site
landfills or facilities. Typical materials disposed of include coal
gasification waste and oils that might contain PCBs. In recent years it has
been determined that deposited or buried wastes, under certain circumstances,
could cause groundwater contamination or other environmental harm. The
System continues to evaluate the environmental impact of its former disposal
practices. Under federal and state law, government agencies and private
parties can attempt to impose liability on System companies for such past
disposal.
Under the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, commonly known as Superfund, EPA has the
authority to clean up hazardous waste sites and to impose the cleanup costs
on parties deemed responsible for the hazardous waste activities on the
sites. Responsible parties include the current owner of a site, past owners
of a site at the time of waste disposal, waste transporters and waste
generators. It is EPA's position that all responsible parties are jointly
and severally liable, so that any single responsible party can be required to
pay the entire costs of cleaning up the site. As a practical matter,
however, the costs of cleanup are usually allocated by agreement of the
parties, or by the courts on an equitable basis among the parties deemed
responsible, and several recent federal appellate court decisions have
rejected EPA's position on strict joint and several liability. Superfund
64
also contains provisions that require System companies to report releases of
specified quantities of hazardous materials and require notification of
known hazardous waste disposal sites. Management believes that the System
companies are in compliance with these reporting and notification requirements.
The System is or has recently been involved in eight Superfund sites.
Three of these sites are in Connecticut, one is in Kentucky, one is in West
Virginia and three are in New Hampshire. The level of study of each site and
the information about the waste contributed to the site by the System and
other parties differs from site to site. Where reliable information is
available that permits the System to make a reasonable estimate of the
expected total costs of remedial action and/or the System's likely share of
remediation costs for a particular site, those cost estimates are provided
below. All cost estimates were made, in accordance with Financial Accounting
Standards Board Statement No. 5, where remediation costs were probable and
reasonably estimable. Any estimated costs disclosed for cleaning up the
sites discussed below were determined without consideration of possible
recoveries from third parties, including insurance recoveries. Where the
System has not accrued a liability, the costs either were not material or
there was insufficient information to accurately assess the System's
exposure.
At two Connecticut sites, the Beacon Heights and Laurel Park landfills,
the major parties formed coalitions to clean the sites and settled their
suits with EPA and CDEP. The coalitions then attempted to join as defendants
a large number of potential contributors, including "Northeast Utilities
(Connecticut Light and Power)." Litigation on both sites was consolidated in
a single case in the federal district court. In January 1993, Judge Dorsey
denied the motion of the Laurel Park Coalition to join NU (CL&P). In
December 1993, Judge Dorsey dismissed the claims of Beacon Heights Coalition
against many of the defendants and directed the coalition to indicate which
remaining defendants it intended to pursue claims against. In January
1994, the Beacon Heights Coalition filed a response listing NU (CL&P) as a
defendant they would not continue to pursue. As a result of Judge Dorsey's
rulings and the coalition's actions, it is not likely that CL&P will incur
any cleanup costs for these sites.
In June, 1993, EPA notified the System that it was a Potentially
Responsible Party (PRP) at the Solvents Recovery Service of New England site
in Southington, Connecticut. PSNH is a de minimis PRP at this site and does
not expect its cost to be substantial.
At the Maxey Flats nuclear waste disposal site in Fleming County,
Kentucky, EPA has issued a notice of potential liability to NNECO and CYAPC.
The System had sent a substantial volume of LLRW from Millstone 1, Millstone 2
and CY to this site. CL&P and WMECO had previously recorded a liability for
future remediation costs for this site based on System estimates. To date, the
costs have not been material with respect to their earnings or financial
positions.
In September 1991, EPA issued its record of decision for the Maxey Flats
nuclear waste disposal site. The EPA-approved remedy requires pumping and
treatment of leachate, installing of an initial cap, allowing materials in
the trenches to settle and ultimately constructing a permanent cap. EPA
estimated that the cost of the remedy is approximately $33.5 million. Based
on that estimate and the volume contributed, the System's share would be
approximately $0.5 million. However, the System believes that the cost of
the remedy could be substantially higher. The System estimates that its
total cost for cleanup could be approximately $1-$2 million. EPA provided an
opportunity for PRPs, including certain System companies, to enter into a
65
consent decree with EPA under which each PRP would reimburse EPA for its past
costs and would undertake remedial action at the site or pay the costs of EPA
undertaking remedial action.
On October 20, 1992, PRPs that are members of the Maxey Flats PRP
Steering Committee, including System companies, and several federal
government agencies, including DOE and the Department of Defense, made a
settlement offer to EPA involving a commitment to perform a substantial
portion of the remedial work required by EPA in its record of decision. On
that same date, the Commonwealth of Kentucky made a settlement offer. EPA
rejected the settlement offers in December 1992, but gave the parties an
additional 60 days to make a "good faith" offer. On March 16, 1993, the PRP
Steering Committee and the federal government agencies made a revised offer
to EPA. Since then all parties have been actively involved in settlement
negotiations.
PSNH has settled with EPA and other PRPs at sites in West Virginia and
Kingston, New Hampshire. PSNH paid approximately $33,700 to cash out of these
sites.
PSNH has committed approximately $280,000 as its share of the costs to
clean up municipal landfills in Dover and North Hampton, New Hampshire. Some
additional costs may be incurred at these sites but they are not expected to
be significant.
Other New Hampshire sites include municipal landfills in Somersworth and
Peterborough, and the Dover Point site owned by PSNH in Dover, New Hampshire.
PSNH's liability at the landfills is not expected to be significant and its
liability at the Dover Point site cannot be estimated at this time.
PSNH contacted NHDES in December 1993 concerning possible coal tar
contamination in the headwater of Lake Winnipesaukee near an area where PSNH
formerly owned and operated a coal gasification plant which was sold in 1945.
PSNH agreed to conduct an historical review and provide a report to NHDES in
February 1994. PSNH, along with two other identified PRPs, most likely will
be conducting a site investigation in the spring of 1994.
In 1987, CDEP published a list of 567 hazardous waste disposal sites in
Connecticut. The System owns two sites on this list. The System has spent
approximately $0.5 million to date completing investigations at these sites.
Both sites were formerly used by CL&P predecessor companies for the
manufacture of coal gas (also known as town gas sites) from the late 1800s to
the 1950s. This process resulted in the production of coal tar residues,
which, when not sold for roofing or road construction, were frequently
deposited on or near the production facilities. Site investigations are
being carried out to gain an understanding of the environmental and health
risks of these sites. Should future site remediation become necessary, the
level of cleanup will be established in cooperation with CDEP. Connecticut
is currently developing cleanup standards and guidelines for soil and
groundwater.
One of the sites is a 25.8 acre site located in the south end of
Stamford, Connecticut. Site investigations have located coal tar deposits
covering approximately 5.5 acres and having a volume of approximately 45,000
cubic yards. A final risk assessment report for the site was completed in
January 1994. Several remedial options are currently being evaluated to
clean up the site; however, CL&P is focusing on institutional and engineering
controls, such as capping and paving, which would reduce the potential health
risks and secure the site. The estimated costs of institutional controls
66
range from $2 million to $3 million.
As part of the 1989 divestiture of CL&P's gas business, site
investigations were performed for properties that were transferred to Yankee
Gas Services Company (Yankee Gas). As a result of those investigations, ten
properties were identified for which negative declarations under the Property
Transfer Act could not be filed. A negative declaration is a statement that
there has been no discharge of hazardous wastes at the site, or that if there
was such a discharge, it has been cleaned up or determined to pose no threat
to health, safety or the environment and is being managed lawfully. Of the
ten sites, CL&P agreed to accept liability for required cleanup for the three
sites it retained. At one location, CL&P and Yankee Gas share the site and
any liability for any required cleanup. Yankee Gas accepted liability for
any required cleanup of the other sites. CL&P and Yankee Gas will share the
costs of cleanup of sites formerly used in CL&P's gas business but not
currently owned by either of them.
In Massachusetts, System companies have been designated by MDEP as PRPs
for ten sites under MDEP's hazardous waste and spill remediation program.
The System does not expect that its share of the remaining remediation costs
for any of these sites will be material. At some of these sites, the System
is responsible for only a small portion or none of the hazardous wastes. For
some of these and for other sites, the total remediation costs are not
expected to be material. At one of the sites, the System has spent
approximately $2 million for cleanup and it expects to incur
approximately $250,000 for the remaining remediation costs.
HWP has been identified by MDEP as a PRP in a coal tar site in Holyoke,
Massachusetts. HWP owned and operated the Holyoke Gas Works from 1859 to 1902.
It was sold to the city of Holyoke and operated by its Gas and Electric
Department (HG&E) from 1902 to 1951. Currently, one third of the two acre
property is owned by HG&E, with the remaining portion owned by a construction
company. The site is located on the west side of Holyoke, adjacent to the
Connecticut River and immediately downstream of HWP's Hadley Falls Station.
MDEP has classified both the land and river deposit areas as Tier I priority
waste disposal sites. Due to the presence of tar patches in the vicinity of the
spawning habitat of the shortnose sturgeon (SNS) - an endangered species - the
National Oceanographic and Atmospheric Administration (NOAA) and National Marine
Fisheries Service have taken an active role in overseeing site activities.
Although HWP denies that it is a PRP, it has cooperated with the agencies in
investigating this problem. Both MDEP and NOAA have indicated they may require
the removal of tar deposits from the vicinity of the SNS spawning habitat. To
date, HWP has spent approximately $200,000 for river studies and construction
costs for an oil containment boom to prevent leaching hydrocarbons from entering
the Hadley Falls tailrace and the Connecticut River.
The System has received other claims from government agencies and third
parties for the cost of remediating sites not currently owned by the System
but affected by past System disposal activities and expects to receive more
such claims in the future. The System expects that the costs of resolving
claims for remediating sites about which it has been notified will not be
material, but cannot estimate the costs with respect to sites about which it
has not been notified. If the System, regulatory agencies or courts
determine that remedial actions must be taken in relation to past disposal
practices on property owned or used for disposal by the System in the past,
the System could incur substantial costs.
67
ELECTRIC AND MAGNETIC FIELDS
In recent years, published reports have discussed the possibility of
adverse health effects from electric and magnetic fields (EMF) associated
with electric transmission and distribution facilities and appliances and
wiring in buildings and homes. On the basis of scientific reviews of these
reports conducted by various state, federal and international panels,
management does not believe that a causal relationship has been established
or that significant capital expenditures are appropriate to minimize
unsubstantiated risks. The System supports further research into the subject
and is participating in the funding of the National EMF Research and Public
Information Dissemination Program and other industry-sponsored studies. If
further investigation were to demonstrate that the present electricity
delivery system is contributing to increased risk of cancer or other health
problems, the industry could be faced with the difficult problem of
delivering reliable electric service in a cost-effective manner
while managing EMF exposures. In addition, if the courts were to conclude
that individuals have been harmed and that utilities are liable for damages,
the potential monetary exposure for all utilities, including the System
companies, could be enormous. Without definitive scientific evidence of a
causal relationship between EMF and health effects, and without reliable
information about the kinds of changes in utilities' transmission and
distribution systems that might be needed to address the problem, if one is
found, no estimates of the cost impacts of remedial actions and liability
awards are available.
Epidemiological studies, rather than laboratory studies, have been
primarily responsible for increased scientific interest in and public concern
over EMF exposures in the past decade. New epidemiological study results
from international researchers were released and publicized in late-1992 and
in 1993, but these only added to a picture of inconsistency from previous
studies. Researchers from Sweden and Denmark concluded that their
statistical results support the hypothesis that EMF may be a causative factor
in certain types of cancer (although they disagreed on which types), while
researchers from Finland and Greece found no evidence to support such a
hypothesis. These researchers, as well as scientific review panels
considering all significant EMF epidemiological and laboratory research to
date, all agree that current information remains inconclusive, inconsistent
and insufficient for risk assessment of EMF exposures. NU is closely
monitoring research and government policy developments.
In 1993, there were several notable events on the federal government
level regarding EMF. The EPA has indefinitely postponed completion of a
report on EMF, citing as its reasons high costs and the unlikelihood of
shedding new light on the issue. Instead, it now plans to issue a 30-page
"summary of science" in early 1994. In a related development, the Department
of Energy has initiated a scientific review of EMF research by the National
Academy of Sciences. Also on the federal level, the National EMF Research
and Public Information Dissemination Program (created by the Energy Policy
Act) moved forward in 1993 by establishing a federal interagency committee
and an advisory committee, and by soliciting the required non-federal
matching funds (through The Edison Electric Institute, NU will be making a
voluntary contribution of approximately $62,000 for each year of the
five-year program).
The Connecticut Interagency EMF Task Force (Task Force) provided reports
to the state legislature in March 1993 and in January 1994. The Task Force
recognizes and supports the need for more research, and has suggested a
policy of "voluntary exposure control," which involves providing people with
information to enable them to make individual decisions about EMF exposure.
68
Neither the Task Force, nor any Connecticut state agency, has recommended
changes to the existing electrical supply system. Finally, the Connecticut
Siting Council adopted a set of EMF "best management practices" in February
1993, which must now be considered in the justification, siting and design of
new transmission lines and substations. EMF has become increasingly
important as a factor in facility siting decisions in many states.
Several bills were introduced in Massachusetts in January 1993, and were
last reported to be pending before various legislative committees. It is not
known whether there will be further action on the bills, which would require
certain disclosures to real estate purchasers and utility employees, a
scientific literature review, establishment of a fund to reduce certain field
exposures, identification of schools and day care centers within 500 feet of
transmission lines and development of EMF regulations. No action was taken
on EMF bills previously pending in 1992.
CL&P has been the focus of media reports charging that EMF associated
with a CL&P substation and related distribution lines in Guilford,
Connecticut, is linked with various cancers and other illnesses in several
nearby residents. See Item 3, Legal Proceedings, for information about two
suits brought by plaintiffs who now live or formerly lived near that
substation.
FERC HYDRO PROJECT LICENSING
Federal Power Act licenses may be issued for hydroelectric projects for
terms of up to 50 years as determined by FERC. Any hydroelectric project so
licensed is subject to recapture by the United States for licensing to others
after expiration of the license upon payment to the licensee of the lesser of
fair value or the net investment in the project plus severance damages less
certain amounts earned by the licensee in excess of a reasonable rate of
return. Licenses are customarily conditioned on the licensee's development of
recreational and other non-power uses at each licensed project. Conditions
may be imposed with respect to low flow augmentation of streams and fish
passage facilities.
On September 28, 1993, the United States Fish and Wildlife Service (FWS)
was petitioned to list the anadromous Atlantic salmon (Salmo salar) as an
endangered species in the United States. After a 90-day review, the petition
was found to be complete and was accepted. The National Marine Fisheries
Service and FWS were given joint jurisdiction over this petition. Within the
next 12 months, these agencies will decide if the petition is warranted. If
salmon are listed as an endangered species, the System may be required to take
a number of actions including increasing spillage over some dams during the
salmon migration period resulting in loss of generation capacity at the affected
hydroelectric facilities; modifying spillways to accommodate safe fish passage;
curtailing pumping at Northfield Mountain during the salmon migration period;
improving upstream and downstream passage facilities at all hydroelectric dams
on the Connecticut and Merrimack Rivers; and modifying intake structures and
curtailing operations during salmon migration periods at certain of the System's
thermal structures. Although these are all possible implications of a listing,
the System cannot estimate the impact on System facilities at this time.
The System is continuing to conduct studies on the Connecticut River in
fulfillment of the Memorandum of Agreement (MOA) concerning downstream
passage of anadromous fishes (Atlantic salmon, American shad and blueback
herring). The MOA was signed by the System and the Connecticut River
Atlantic Salmon Commission and its member agencies in 1990. The System
conducted studies in 1991 and 1992 of the entrainment of salmon smolts and
69
juvenile shad and herring in water pumped to the upper reservoir of the
Northfield Mountain Pumped Storage Project. Studies of entrainment of shad
and herring indicated that Northfield's impact on these species is low, and
further studies have not been conducted.
Studies of salmon smolts, however, indicated the potential for
unacceptable losses of smolts due to entrainment, but the results also
indicated that firm conclusions could not be drawn. Accordingly, the System
conducted a more definitive study indicating that about 10 percent of the 1993
smolt run was entrained at Northfield. The System will continue to pursue
practical techniques to reduce salmon smolt entrainment at Northfield and has
agreed to alter its 1994 maintenance schedule to reduce the amount of time
when all four pump/turbine units will be pumping simultaneously during the
smolt migration period. Should the system be unable to reduce smolt
entrainment through operational changes or practical exclusion techniques,
substantial additional costs are possible. The total cost cannot be
determined at this time.
The System operating companies hold licenses granted under Part I of the
Federal Power Act for the operation and maintenance of thirteen existing
hydroelectric projects, four of which are in Massachusetts (Northfield,
Turners Falls, Gardners Falls and Holyoke [river and canal units]), three of
which are in Connecticut (Scotland, Housatonic [encompassing Bulls Bridge,
Rocky River, Shepaug and Stevenson] and Falls Village) and six of which are
in New Hampshire (Merrimack [encompassing Garvins Falls, Hooksett and
Amoskeag], Smith, Ayers Island, Eastman Falls, Canaan and Gorham).
In 1992, FERC issued orders exempting from licensing WMECO's four
Chicopee River projects: Dwight, Indian Orchard, Putts Bridge and Red
Bridge. To date, FERC has not claimed jurisdiction over CL&P's Bantam,
Robertsville, Taftville and Tunnel Projects or PSNH's Jackman project.
Four of the System's FERC licenses expired at the end of 1993 (Gardners
Falls, Ayers Island, Gorham and Smith). Relicensing efforts have been under
way for these projects for several years. As no third parties have filed
competing license applications with FERC for these projects, it is highly
likely that FERC will grant renewal licenses for these projects to the
System.
However, certain operating, environmental and/or recreational conditions
may be placed on these licenses. Because FERC was unable to complete its
relicensing process prior to the December 31, 1993 expiration of these
licenses, under the provision of section 15 of the Federal Power Act, FERC
has issued one-year extensions to each of these licensees. FERC will
continue to issue annual licenses until it completes the relicensing process.
EMPLOYEES
As of December 31, 1993, the System companies had approximately 9,697
full and part time employees on their payrolls, of which approximately 2,697
were employed by CL&P, approximately 1,452 by PSNH, approximately 656 by
WMECO, approximately 119 by HWP, approximately 1,252 by NNECO, approximately
2,584 by NUSCO and approximately 937 by North Atlantic. NU and NAEC have no
employees. Approximately 2,242 employees of CL&P, PSNH, WMECO and HWP are
covered by union agreements, which expire between October 1994 and May 1996.
Certain employees of North Atlantic negotiated a union contract in 1993.
On August 3, 1993, the System announced that it intended to reduce its
total workforce by 600 to 700 positions and offered a voluntary early
70
retirement program to about 800 eligible employees. The program was
available generally to all nonbargaining unit employees of NU's subsidiaries,
NUSCO, CL&P, WMECO, HWP, PSNH and NAESCO, who would be at least age 55 with
ten years of service as of November 1, 1993. Most nuclear-related job
classifications at NUSCO and NAESCO were not eligible. The program enhanced
pension benefits by adding an additional three years to age and service for
the purpose of calculating pension benefits and early retirement reduction
factors, as well as providing a supplemental payment to employees who retired
prior to becoming eligible for social security benefits. Each program
participant has retired or will retire on a date to be established by the
employer between November 1, 1993 and November 1, 1994. A similar program
was offered to approximately 300 bargaining unit employees working for
System companies and 12 employees of NEPOOL/NEPEX. The workforce reduction
affected approximately 811 employees, of which 498 individuals accepted the
early retirement program and another 313 individuals who were involuntarily
terminated. Involuntarily terminated employees were eligible to receive a
lump sum severance payment of up to a maximum of 52 weeks salary, depending
on years of credited service. In addition, as part of the System's
reorganization of its Connecticut-based nuclear organization, 32 employees
were involuntarily terminated through January 12, 1994. For more information
on the reorganization see "Nuclear Generation - Operations - Nuclear
Performance Improvement Initiatives." The total cost of the workforce
reduction program and the nuclear reorganization was approximately $38
million, including pension, severance and other benefits.
71
Item 2. Properties
The physical properties of the System are owned or leased by
subsidiaries of NU. CL&P's principal plants and other properties
are located either on land which is owned in fee or on land, as to
which CL&P owns perpetual occupancy rights adequate to exclude all
parties except possibly state and federal governments, which has
been reclaimed and filled pursuant to permits issued by the United
States Army Corps of Engineers. The principal properties of PSNH
are held by it in fee. In addition, PSNH leases space in an office
building under a 30-year lease expiring in 2002. WMECO's principal
plants and a major portion of its other properties are owned in
fee, although one hydroelectric plant is leased. NAEC owns a
35.98201 percent interest in Seabrook 1, and approximately 719 acres
of exclusion area land located around the unit. In addition, CL&P,
PSNH, and WMECO have certain substation equipment, data processing
equipment, nuclear fuel, nuclear control room simulators, vehicles,
and office space that are leased. With few exceptions, the
System's companies' lines are located on or under streets or
highways, or on properties either owned, leased, or in which the
company has appropriate rights, easements, or permits from the
owners.
CL&P's properties are subject to the liens of CL&P's first
mortgage indenture and, with respect to properties formerly owned
by The Hartford Electric Light Company (HELCO), to the lien of
HELCO's first mortgage indenture. PSNH's properties are subject to
the lien of its first mortgage indenture. In addition, PSNH's
outstanding term loan and revolving credit agreement borrowings are
secured by a second lien, junior to the lien of the first mortgage
indenture, on PSNH property located in New Hampshire. WMECO's
properties are subject to the lien of its first mortgage indenture.
NAEC's First Mortgage Bond are secured by a lien on the Seabrook 1
interest described above, and all rights of NAEC under the Seabrook
Power Contract. In addition, CL&P's and WMECO's interests in
Millstone 1 are subject to second liens for the benefit of lenders
under agreements related to pollution control revenue bonds.
Various ones of these properties are also subject to minor
encumbrances which do not substantially impair the usefulness of
the properties to the owning company.
The System companies' properties are well maintained and are
in good operating condition.
72
ELECTRIC PROPERTIES
The following represents the miles of electric lines operated and other
physical data as of December 31, 1993, for the System companies:
Total
CL&P PSNH WMECO HWP System
---- ---- ----- --- ------
TRANSMISSION SYSTEM:
Substations
-----------
Number 37 49 15 1 102
Aggregate Capacity
(kVA) 16,329,857 4,991,221 3,507,152 197,000 25,025,230
Overhead Lines
--------------
(Circuit Miles)
345 kV 392 252 105 - 749
230 kV - 9 - - 9
115 kV 1,131 713 328 15 2,187
69 kV 101 - 35 - 136
Underground Lines
-----------------
(Cable Miles)
138 kV 41 - - - 41
115 kV 117 - 28 - 145
69 kV 8 - - - 8
DISTRIBUTION SYSTEM:
Substations
Number 243 134 51 6 434
Aggregate Capacity 6,873,752 776,310 1,407,705 142,350 9,200,117
(kVA)
Overhead Lines
--------------
Pole Miles 18,130 10,574 3,592 19 32,315
Underground Lines
-----------------
Conduit Bank Miles 710 880 262 3 1,855
OTHER PHYSICAL DATA:
Line Transformers
-----------------
Number in Service 217,642 121,634 37,705 151 377,132
Aggregate Capacity
(kVA) 9,857,000 4,057,000 1,716,000 81,000 15,711,000
As of December 31, 1993, the electric generating plants of the System
operating companies and the System companies' entitlements from the generating
plants of the three operating Yankee regional nuclear generating companies were as follows:
73
Name Plate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
System Generating Plants:
- ------------------------
Millstone Plant (Waterford-Long Island Sound)
CL&P's Portion -
81% Ownership of Unit 1 Nuclear 1970 535,815 524,637
81% Ownership of Unit 2 Nuclear 1975 737,019 708,345
52.9330% Ownership of Unit 3 Nuclear 1986 663,303 608,041
--------- ---------
1,936,137 1,841,023
PSNH's Portion -
2.8475% Ownership of Unit 3 Nuclear 1986 35,682 32,709
WMECO's Portion -
19% Ownership of Unit 1 Nuclear 1970 125,685 123,063
19% Ownership of Unit 2 Nuclear 1975 172,881 166,155
12.2385% Ownership of Unit 3 Nuclear 1986 153,361 140,584
--------- ---------
451,927 429,802
Total Millstone Plant
100% Ownership of Unit 1 Nuclear 1970 661,500 647,700
100% Ownership of Unit 2 Nuclear 1975 909,900 874,500
68.0190% Ownership of Unit 3 Nuclear 1986 852,346 781,334
--------- ---------
2,423,746 2,303,534
Seabrook Plant
(Seabrook, New Hampshire)
CL&P's 4.05985% Ownership Portion Nuclear 1990 50,423 46,688
NAEC's 35.56942% Ownership Portion <F1>(a) Nuclear 1990 441,772 409,048
--------- ---------
Total Seabrook Plant 492,195 455,736
Northfield Plant (Northfield
and Erving - Connecticut River)
CL&P's 81% Ownership Portion Pumped Storage 1972-1973 685,260 874,800
WMECO's 19% Ownership Portion Pumped Storage 1972-1973 160,740 205,200
--------- ---------
Total Northfield Plant 846,000 1,080,000
Middletown Plant (CL&P) Steam 1958-1973 767,896 765,000
(Middletown - Connecticut River) Gas Turbine 1966 18,594 22,000
--------- ---------
Total Middletown Plant 786,490 787,000
Montville Plant (CL&P) Steam 1954-1971 489,900 492,000
(Montville - Thames River) 2 Diesels 1967 5,500 5,500
--------- ---------
Total Montville Plant 495,400 497,500
74
Name Plate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Norwalk Harbor Plant (CL&P) Steam 1960-1963 326,400 336,000
(Norwalk - Long Island Sound) Gas Turbine 1966 16,320 17,000
--------- ---------
Total Norwalk Plant 342,720 353,000
Devon Plant (CL&P) Steam 1956-1958 207,000 218,000
(Milford - Housatonic River) Gas Turbine 1986 18,594 19,200
--------- ---------
Total Devon Plant 225,594 237,200
South Meadow Plant (CL&P) 4 Gas Turbines 1970 167,400 195,600
(Hartford - Connecticut River)
Shepaug Plant (CL&P) Hydro 1955 37,200 43,400
(Southbury - Housatonic River)
Rocky River Plant (CL&P) Pumped 1928-1929 31,000 30,350
(New Milford - Housatonic River) Storage
Stevenson Plant (CL&P) Hydro 1919-1936 30,500 28,900
(Monroe - Housatonic River)
Amoskeag Plant (PSNH) Hydro 1922-1924 16,000 17,500
(Manchester - Merrimack River)
Garvins Falls Plant (PSNH) Hydro 1925-1981 12,400 10,560
(Bow - Merrimack River)
Lost Nation Plant (PSNH) Combustion
(Northumberland) Turbine 1969 18,000 18,300
Merrimack Plant (PSNH) Steam 1960-1968 433,600 433,500
(Bow - Merrimack River) 2 Combustion
Turbines 1968-1969 37,200 44,600
--------- ---------
Total Merrimack Plant 470,800 478,100
Schiller Plant (PSNH) Steam 1952-1957 150,000 145,100
(Portsmouth - Piscataqua River) Combustion
Turbine 1970 21,250 22,000
--------- ---------
Total Schiller Plant 171,250 167,100
75
NamePlate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Wyman #4 Plant
(Yarmouth, ME)
PSNH's 3.1433% Ownership Portion Steam 1978 19,900 19,465
Smith Plant (PSNH) Hydro 1948 15,000 15,170
(Berlin - Androscoggin River)
White Lake Plant (PSNH) Combustion
(Tamworth) Turbine 1968 18,600 22,150
Newington Plant (PSNH) Steam 1974 414,000 406,000
(Newington - Piscataqua River)
Turners Falls Plant (WMECO) Hydro 1905-1917 56,573 59,250
(Montague - Connecticut River)
West Springfield Plant (WMECO) Steam 1957 113,636 107,000
(West Springfield - Connecticut River) Gas Turbine 1968 18,594 22,000
--------- ---------
Total West Springfield Plant 132,230 129,000
Cobble Mountain Plant (WMECO)<F2>(b) Hydro 1930 33,000 33,960
(Granville - Westfield Little River)
Mt. Tom Plant (HWP) Steam 1960 136,000 147,000
(Holyoke - Connecticut River)
Hadley Falls Plant (HWP) Hydro 1952-1983 30,800 31,500
(Holyoke - Connecticut River)
23 Small Hydro Plants 74,156 80,570
7 Internal Combustion Plants
(gas turbine, combustion turbine, and jet) 175,314 196,600
--------- ---------
Total System Generating Plants 7,672,268 7,844,445
--------- ---------
76
NamePlate Claimed
Year Rating Capability
Name, Owner, Town, Location Type Installed (Kilowatts) (Kilowatts)
- --------------------------- ---- --------- ----------- -----------
(Winter
Ratings)
Regional Nuclear Generating Plants <F3>(c)
Connecticut Yankee Atomic Power Company Nuclear 1968
(Haddam, Connecticut)
CL&P's 34.5% Ownership Portion 207,104 201,204
PSNH's 5.0% Ownership Portion 30,015 29,160
WMECO's 9.5% Ownership Portion 57,028 55,404
--------- ---------
294,147 285,768
--------- ---------
Maine Yankee Atomic Power Company Nuclear 1972
(Wiscasset, Maine)
CL&P's 12.0% Ownership Portion 87,289 94,832
PSNH's 5.0% Ownership Portion 36,371 39,514
WMECO's 3.0% Ownership Portion 21,822 23,708
--------- ---------
145,482 158,054
--------- ---------
Vermont Yankee Nuclear Power
Corporation Nuclear 1972
(Vernon, Vermont)
CL&P's 9.5% Ownership Portion 48,120 44,356
PSNH's 4.0% Ownership Portion 20,231 18,648
WMECO's 2.5% Ownership Portion 12,677 11,685
--------- ---------
81,028 74,689
--------- ---------
Total Regional Nuclear Generating Plants 520,657 518,511
--------- ---------
TOTAL GENERATING PLANTS 8,192,925 8,362,956
========= =========
Summary
CL&P 5,291,543 5,456,703
PSNH 1,301,149 1,298,536
NAEC 441,772 409,048
WMECO 978,705 1,008,109
HWP 179,756 190,560
--------- ---------
TOTAL GENERATING PLANTS 8,192,925 8,362,956
========= =========
_________________________
<FN>
<F1>(a) In February 1994, NAEC purchased VEG&T's 0.41259% ownership share of
Seabrook, representing a current capability of 4,745 kW. If NAEC had owned this
additional share of Seabrook at December 31, 1993, NAEC's and the NU system's
ownership shareof Seabrook would have been 35.98201% and 40.04186%, respectively, representing
current generating capability of 413,793 kW and 460,481 kW, respectively. In addition,
the current generating capability for the NU system and total capability including
Yankee regional nuclear generating companies would have been 7,849,190 kW and 8,367,701
kW, respectively. For more information concerning VEG&T, see "Item 1. Business, Electric
Operations - Nuclear Generation, Seabrook."
<F2>(b) The Cobble Mountain plant is leased from the City of Springfield,
Massachusetts.
<F3>(c) Represents CL&P's, PSNH's, and WMECO's entitlements in the generating
plants of the three operating Yankee regional nuclear generating companies.
77
Franchises
NU's operating subsidiaries hold numerous franchises in the
territories served by them. See also "Competition and Marketing -
Retail Wheeling" and "Legal Proceedings."
CL&P. Subject to the power of alteration, amendment or repeal by
the General Assembly of Connecticut and subject to certain approvals,
permits and consents of public authority and others prescribed by
statute, CL&P has, subject to certain exceptions not deemed material,
valid franchises free from burdensome restrictions to sell electricity
in the respective areas in which it is now supplying such service.
In addition to the right to sell electricity as set forth above,
the franchises of CL&P include, among others, rights and powers to
manufacture, generate, purchase, transmit and distribute electricity,
to sell electricity at wholesale to other utility companies and
municipalities and to erect and maintain certain facilities on public
highways and grounds, all subject to such consents and approvals of
public authority and others as may be required by law. The franchises
of CL&P include the power of eminent domain.
PSNH. Subject to the power of alteration, amendment or repeal by
the General Court of the State of New Hampshire and subject to certain
approvals, permits and consents of public authority and others
prescribed by statute, PSNH has, subject to certain exceptions not
deemed material, valid franchises free from burdensome restrictions to
sell electricity in the respective areas in which it is now supplying
such service.
In addition to the right to sell electricity as set forth above,
the franchises of PSNH include, among others, rights and powers to
manufacture, generate, purchase, transmit and distribute electricity,
to sell electricity at wholesale to other utility companies and
municipalities and to erect and maintain certain facilities on certain
public highways and grounds, all subject to such consents and
approvals of public authority and others as may be required by law.
The franchises of PSNH include the power of eminent domain.
NNECO. Subject to the power of alteration, amendment or repeal
by the General Assembly of Connecticut and subject to certain
approvals, permits and consents of public authority and others
prescribed by statute, NNECO has a valid franchise free from
burdensome restrictions to sell electricity to utility companies doing
an electric business in Connecticut and other states.
In addition to the right to sell electricity as set forth above,
the franchise of NNECO includes, among others, rights and powers to
manufacture, generate and transmit electricity, and to erect and
maintain facilities on certain public highways and grounds, all
subject to such consents and approvals of public authority and others
as may be required by law.
WMECO. WMECO is authorized by its charter to conduct itselectric
business in the territories served by it, and has
locations in the public highways for transmission and distribution
lines. Such locations are granted pursuant to the laws of
Massachusetts by the Department of Public Works of Massachusetts or
local municipal authorities and are of unlimited duration, but the
78
rights thereby granted are not vested. Such locations are for
specific lines only, and for extensions of lines in public highways
further similar locations must be obtained from the Department of
Public Works of Massachusetts or the local municipal authorities. In
addition, WMECO has been granted easements for its lines in the
Massachusetts Turnpike by the Massachusetts Turnpike Authority.
HWP and Holyoke Power and Electric Company (HP&E). HWP, and its
wholly owned subsidiary HP&E, are authorized by their charters to
conduct their businesses in the territories served by them. HWP's
electric business is subject to the restriction that sales be made by
written contract in amounts of not less than 100 horsepower, except
for municipal customers in the counties of Hampden or Hampshire,
Massachusetts and except for customers who occupy property in which
HWP has a financial interest, by ownership or purchase money mortgage.
HWP also has certain dam and canal and related rights, all subject to
such consents and approvals of public authorities and others as may be
required by law. The two companies have locations in the public
highways for their trans-mission and distribution lines. Such
locations are granted pursuant to the laws of Massachusetts by the
Department of Public Works of Massachusetts or local municipal
authorities and are of unlimited duration, but the rights thereby
granted are not vested. Such locations are for specific lines only
and, for extensions of lines in public highways, further similar
locations must be obtained from the Department of Public Works of
Massachusetts or the local municipal authorities. The two companies
have no other utility franchises.
NAEC. NAEC is authorized to own and operate its interest in
Seabrook 1.
79
ITEM 3 - LEGAL PROCEEDINGS
1. Litigation Relating to Electric and Magnetic Fields
On December 9, 1991, NU and CL&P were sued in Connecticut Superior Court
by Melissa Bullock, a nineteen year old woman, and her mother Suzanne
Bullock, both residents of 28 Meadow Street in Guilford, Connecticut. The
plaintiffs allege that they have lived in close proximity to CL&P's Meadow
Street substation and distribution lines since 1979. The suit claims that
Melissa Bullock suffers from a form of brain cancer, and that the cancer and
related physical and psychological injuries were "brought on as a result of
exposure in her home to electromagnetic radiation generated by the
defendants." Suzanne Bullock claims various physical and psychological
injuries, and a diminution in the value of her property. The various counts
against NU and CL&P include allegations of negligence, products liability,
nuisance, unfair trade practices and strict liability. The suit seeks
monetary damages, both compensatory and punitive, in as-yet unspecified
amounts, as well as an injunction to cease emission of "dangerous levels" of
electric and magnetic fields (EMF) into the plaintiffs' home.
The plaintiffs are represented in part by counsel with a nationwide
emphasis on similar litigation, and management considers this lawsuit to be a
test case. The case is presently in the pre-trial discovery process, with
trial anticipated in 1995.
On January 14, 1992, a second lawsuit involving two other plaintiffs was
served on NU and CL&P, also alleging cancer from EMF emanating from CL&P's
Meadow Street substation and distribution lines (the Walston case). The
plaintiffs in the Walston case also live or lived on Meadow Street. They are
represented by the same counsel as the Bullocks, and the claims are nearly
identical to the Bullocks' suit. In a decision issued on October 21, 1993,
the court granted the Company's motion to strike certain counts of the
plaintiff's complaint alleging causes of action based on ultrahazardous
activity and unfair trade practices. This case is also in the pretrial
discovery process; a trial date is not yet known.
Management believes that the allegations that EMF caused or contributed
to the plaintiffs' illnesses are not supported by current scientific studies.
NU and CL&P intend to defend the lawsuits vigorously. For information on EMF
studies and state and federal initiatives, see "Item 1 Business -
Regulatory and Environmental Matters - Electric and Magnetic Fields."
2. Massachusetts Municipal Wholesale Electric Company
On January 8, 1992, a suit was filed in Massachusetts Superior Court by
Massachusetts Municipal Wholesale Electric Company and a number of its
member municipalities, all of which are members of NEPOOL, against other
members of NEPOOL alleging, in summary, that the plaintiffs have been damaged
by NEPOOL's establishment of a minimum size for generating units to be
considered for designation as "Pool-Planned" units. That designation
entitles the owners of an interest in a unit to have their shares of the
output of the unit transmitted to them under a transmission rate that is
generally more favorable than the rates that would be available to them in
the absence of such a designation. The complaint names NU's operating
subsidiaries, CL&P, PSNH, WMECO, HWP and HP&E, as defendants.
After settlement negotiations broke down in April 1993, the defendants
80
moved to dismiss the suit on jurisdictional and other grounds. On December
1, 1993, the Superior Court held that it had jurisdiction to decide the
plaintiffs' claims, but ordered the plaintiffs to join additional NEPOOL
Participants as parties in this action. The defendants are presently
awaiting the court's decision on their motion to dismiss the suit for failure
to state a claim.
In an effort to respond to the concerns that prompted the complaint, the
defendants proposed the 30th Amendment to the NEPOOL Agreement. On June 21,
1993, the plaintiffs moved to enjoin the defendants from filing the 30th
Amendment with state or federal regulatory authorities. The Superior Court
entered the preliminary injunction on July 2, 1993. The defendants
petitioned a Single Justice of the Appeals court for relief from the Order of
the Superior Court, and on September 22, 1993, the Single Justice vacated the
preliminary injunction. The plaintiffs have appealed the Order of the Single
Justice, and their appeal is presently pending before the full bench of the
Appeals Court. After the preliminary injunction was vacated, 29 participants
that were also defendants in the Massachusetts litigation filed the 30th
Amendment with FERC. The Commission has requested additional information
concerning the 30th Amendment, and the Amendment has not yet become
effective.
3. "Municipal Rate" Litigation
CL&P has initiated a challenge in federal court to the DPUC's approval
of an electricity purchase contract for a 13.85 MW resource recovery facility
under Connecticut's so-called "municipal rate law." Under this law, CL&P
would be required to purchase electricity from the resource recovery facility
at a rate equal to the retail rate that CL&P charges municipalities for
electricity, which is significantly higher than CL&P's avoided costs. The
DPUC ordered CL&P to pay the municipal rate for electricity generated from
trash of towns that are CL&P customers. CL&P filed a Federal District Court
action challenging the validity of the municipal rate statute in January
1990. In May 1993, the judge informed the parties that he would require the
parties to ask FERC to resolve the issues in this case. On July 12, 1993,
CL&P filed a Request for Declaratory Ruling with FERC asking FERC to
determine that the municipal rate law was invalid. The FERC has not taken
any action on CL&P's petition.
4. CL&P's Connecticut DPUC Rate Proceeding
In June, 1993 the DPUC approved a multi-year rate plan for CL&P with
increases of 2.01, 2.04 and 2.06 percent, totaling $141.3 million in
additional revenues over three years, beginning July 1, 1993. Two appeals
(one by the City of Hartford and the Connecticut Office of Consumer Counsel
on the multi-year plan and one by CL&P on four issues) filed in the case have
been consolidated in Hartford Superior Court. Oral arguments were held on
October 15, 1993 and February 14, 1994 on CL&P's motion to dismiss the
Hartford/OCC appeal on jurisdictional grounds. Establishment of a briefing
schedule is awaiting a decision on CL&P's motion to dismiss. For additional
information on CL&P's 1992-1993 retail rate case, see Item 1, "Business -
Rates - Connecticut Retail Rates".
5. Housatonic Railroad
Housatonic Railroad (Housatonic) owns and operates an independent
freight and tourist service rail line extending from New Milford to Canaan,
Connecticut. Housatonic is suing CL&P and NUSCO for damages allegedly
81
arising from the partial collapse of a canal at CL&P's Falls Village
hydroelectric facility in 1989. Housatonic claims that the resultant flood
rendered its rail line inoperable. The complaint alleges that CL&P and NUSCO
promised to restore the railroad to operating condition within a few weeks to
a few months and, in any event, before completing the restoration of the
canal. Housatonic maintains that, despite these alleged representations and
the cooperation of Housatonic in the restoration project, CL&P and NUSCO
completely reconstructed the canal before restoring the railroad to operating
condition. Rail service was allegedly interrupted for a year. Housatonic
claims that this interruption deprived the railroad of "growth and
development" it would have otherwise experienced.
Housatonic is seeking relief on the common law grounds of negligence,
strict liability for ultrahazardous activity, nuisance, trespass,
and unjust enrichment. Housatonic alleges damages of $2-$4 million for its
unjust enrichment claim. The case is currently in discovery. NUSCO and
CL&P intend to defend this case vigorously.
6. Connecticut Indian Land Claims
Numerous lawsuits asserting land claims in Connecticut have been either
filed in state and federal court or threatened by a group called the Golden
Hill Paugussett Tribe of Indians (the "Paugussetts"). These actions could
impact the title of certain NU system companies named in the suits to certain
real estate in eight Connecticut towns. Title to the properties of thousands
of other owners, including homeowners, has been similarly threatened. To date,
CL&P has been specifically named as a defendant in only one case, a class
action suit affecting approximately 1,500 property owners in Southbury. On
October 28, 1993, this action was dismissed; however, the dismissal has been
appealed. The outcome of the present or potential litigation either by the
Paugussetts or by other groups claiming to be "Indian tribes" cannot be
predicted at this time. However, a number of possible defenses exist to
Indian land claims in Connecticut, and the Paugussetts' success on the merits
appears unlikely.
7. Litigation Relating to the Reorganization of PSNH
An appeal has been filed against PSNH, et al., by three of PSNH's former
common shareholders, Messrs. Richards, Kaufman and Rochman (RKR), from a
judgment rendered by the U.S. Bankruptcy Court for the District of New
Hampshire. The judgment enjoined RKR and their fellow participants from
commencing a threatened class action against NU and its subsidiaries and
others. RKR's action alleged violations of the Securities Exchange Act of
1934 and sought damages in the amount of $300 million in connection with the
reorganization of PSNH.
After entry of the judgment, another shareholder, Mr. Mascioni, Trustee,
represented by Richards from the RKR group, commenced a class action in U.S.
District Court for the Southern District of New York against the System and
certain of its employees and advisors, alleging the same claims and seeking
the same damages earlier threatened by RKR. An Order of Contempt was
obtained from the Bankruptcy Court directing Mascioni and Richards to
withdraw the action, which they have done. Mascioni and Richards have filed
an appeal from the Order of Contempt. If RKR or Mascioni are successful in
reversing the Judgment or the Order of Contempt, they have stated that they
will commence an action against the System and certain of its employees and
advisors. The System intends vigorously to defend the appeals and if either
82
appeal is successful, it intends vigorously to defend any action by RKR or
Mascioni.
8. Litigation Challenging New Hampshire Property Tax
On January 27, 1992, the United States Supreme Court agreed to exercise
its "original jurisdiction" to hear a suit filed by Attorneys General from
Connecticut, Massachusetts and Rhode Island that asked the Court to overturn
a new property tax on Seabrook. A Special Master, appointed by the U.S.
Supreme Court, rendered his opinion that the New Hampshire law, which created
the Seabrook Tax and granted a credit for the amount paid in Seabrook Tax
against any Business Profits Tax owed, is unconstitutional.
In April, 1993 the matter was settled by the parties before the
United States Supreme Court acted on the report of the Special Master. The
settlement provided for a full refund to all the parties taxed over a two-
year period. The credit for the tax against the New Hampshire Business
Profits Tax was repealed.
9. Termination of the PSNH Chapter 11 Case
PSNH filed a petition for reorganization under Chapter 11 of the
Bankruptcy Code on January 28, 1988. PSNH's reorganization was substantially
completed by NU's acquisition of PSNH on June 5, 1992.
Since the acquisition, five remaining final fee applications have been
pending before the U.S. Bankruptcy Court for the District of New Hampshire,
seeking final fees, expenses and enhancements from PSNH in connection with
the PSNH Chapter 11 bankruptcy case. The law firm of Stutman Treister &
Glatt was seeking an enhancement of $3,155,293 over the $4,344,707 in fees
and $363,928 in expenses billed for legal representation of PSNH, and First
Boston Corp. was seeking $4,500,000 for merger and acquisition services
rendered to PSNH. Paul L. Gioia sought an enhancement of $200,000 over and
above the $268,875 in fees allowed based on his hourly rates under the court
order authorizing his employment as examiner. The United Illuminating
Company was seeking a "benefit to the estate" allowance to cover its costs
and expenses of making its competing bid for PSNH. Rothchild, Inc.,
financial advisor to the Official Committee of Equity Security Holders, was
seeking an enhancement of $1,000,000 over and above the $2,090,000 paid to it
in fees under the order authorizing its retention.
On August 30, 1993, the United States Bankruptcy Court for the District
of New Hampshire issued an "Omnibus Order on Final Fee Awards and Related
Matters". The Order allowed Stutman Treister and Glatt the fees and expenses
they had billed for representation of PSNH over the term of the case in the
amount of $4,344,707 in fees and $363,928 in expenses and denied any
additional fees, including the requested fee enhancement. First Boston Corp.
was denied any additional fees beyond those already collected by it as a
financial advisor during the course of the bankruptcy proceedings. Paul L.
Gioia was awarded an additional $200,000 for his services as examiner during
the proceedings. The United Illuminating Company was denied any fees as an
unsuccessful bidder for PSNH. Rothchild, Inc. was awarded the $1,000,000
enhancement requested on the grounds that exceptional results were obtained
for the equity holders under the circumstances of the PSNH bankruptcy. On
October 1, 1993 the Bankruptcy Court granted PSNH's Application for Final
Decree, closing the bankruptcy proceeding.
83
10. Utility Property - Tax Appeal Matters
On October 15, 1993, the Merrimack County Superior Court issued a
decision dismissing PSNH's appeals of the property taxes assessed against it
by the Town of Bow, New Hampshire for the years 1988, 1989, 1990 and 1991.
The decision rejects the "unit method" of valuation (essentially book cost),
which is the method predominantly used for PSNH's property throughout New
Hampshire, and approves the "reproduction cost method" of valuation. This
change in methodology would result in property tax valuations approximately
three times greater than net book cost, with a commensurate rise in property
taxes in Bow. PSNH has two generating facilities in the Town of Bow:
Merrimack Station, consisting of two coal-fired units with a total capacity
of 459 megawatts, and the Garvins Falls hydroelectric station with an
installed capacity of 12.1 megawatts. PSNH filed an appeal with the New
Hampshire Supreme Court on October 5, 1993. The appeal was accepted by the
New Hampshire Supreme Court on January 26, 1994, with the Company's briefs
due March 7, 1994.
In another property tax matter, Connecticut statues require that every
town revalue all property on its "grand list" at least once every ten years.
In late 1991, the Town of Haddam, Connecticut, where Connecticut Yankee is
located, performed its grand list revaluation. In preparation for this
revaluation, NUSCO property tax personnel had a series of meetings with
the town's Assessor in an attempt to reach an agreement concerning
Connecticut Yankee's value for property tax purposes. In October 1991, the
town's valuation contractor, United Appraisal, toured the Connecticut Yankee
facility. United Appraisal placed a fair market value of $433 million on
Connecticut Yankee. In January 1992, the town's selectmen appropriated funds
to perform a second appraisal of Connecticut Yankee by an engineering
consulting firm.. The town engaged the engineering firm of Dean and
Associates to perform this second valuation. Following a tour of Connecticut
Yankee and receipt of written material from NU, the Dean report was completed
on February 27, 1992. Dean placed a fair market value of $840 million on CY.
The town Assessor accepted Dean's fair market value.
The Company appealed the Assessor's decision to the Haddam Board of
Tax Review. It is Connecticut Yankee's position that the fair value of
Connecticut Yankee is best approximated by the facility's net book value of
$243 million. On May 21, 1992, following a March 18, 1992, hearing, the
Board of Tax Review rejected Connecticut Yankee's appeal and upheld the
Assessor's decision.
Based upon an estimate of the town's mill rate, as valued, Connecticut
Yankee's annual property tax payment is approximately $7.8 million. If
valued at net book value, the tax would be approximately $2.3 million.
The Company appealed the Board of Tax Review's decision to the
Connecticut Superior Court on July 15, 1992. The case is currently in
discovery and no trial schedule has been established.
11. Other Legal Proceedings
The following sections of Item 1 "Business" discuss additional legal
proceedings: "Rates" for information about rate and fuel adjustment clause
proceedings and the reorganization of PSNH's largest customer, NHEC;
"Resource Plans -- Future Needs" for information on proceedings involving
integrated resource planning; "Electric Operations -- Generation and
84
Transmission" for information about proceedings relating to power
transmission issues; "Electric Operations -- Nuclear Generation" for
information related to various Seabrook joint owners, high-level and low-
level radioactive waste disposal, decommissioning matters and NRC regulation;
and "Regulatory and Environmental Matters" for information about proceedings
involving surface water and air quality, toxic substances and hazardous
waste, electric and magnetic fields, licensing of hydroelectric projects, and
other matters.
ITEM 4. Submission of Matters to a Vote of Security Holders (Fourth
Quarter 1993)
A special meeting of Common, Preferred and Class A Preferred
Shareholders of CL&P was held on December 15, 1993, to vote on (1) a
proposal to amend the Certificate of Incorporation as it relates to issuance
or assumption of unsecured indebtedness that would permanently eliminate the
10% limitation on unsecured borrowings for securities with maturities of
less than 10 years and (2) a proposal to consent to the issuance or
assumption of unsecured indebtedness that would authorize the Company to
continue for a period ending March 31, 2004 to issue or assume unsecured
indebtedness in an amount up to 20% of aggregate capitalization.
The votes cast at the meeting were as follows:
FOR AGAINST ABSTAIN
Proposal (1) Common Stock 12,222,930 0 0
Senior Stock 8,468,442 4,174,126 139,210
Proposal (2) Senior Stock 10,503,710 1,581,318 696,750
A special meeting of Common, Preferred and Class A Preferred
Shareholders of WMECO was held on December 15, 1993, to vote on (1) a
proposal to amend the By-laws and Articles of Organization as they relate to
(1) a proposal to amend the Certificate of Incorporation as it relates to
issuance or assumption of unsecured indebtedness that would permanently
eliminate the 10% limitation on unsecured borrowings for securities with
maturities of less than 10 years, (2) a proposal to consent to the issuance
or assumption of unsecured indebtedness that would authorize the Company to
continue for a period ending February 10, 2004 to issue or assume unsecured
indebtedness in an amount up to 20% of aggregate capitalization and (3) a
proposal regarding the location of shareholder meetings .
The votes cast at the meeting were as follows:
FOR AGAINST ABSTAIN
Proposal (1) Common Stock 1,072,471 0 0
Senior Stock 2,485,059 1,096,056 12,865
Proposal (2) Senior Stock 2,680,268 795,767 117,945
Proposal (3) Common Stock 1,072,471 0 0
Senior Stock 2,878,229 625,453 112,074
85
Each Proposal 1 failed to attain the necessary two-thirds approving vote
of all outstanding shares of each class of stock voting, and thus failed to
carry. Each Proposal 2 attained the necessary approving vote of a majority
of all outstanding shares of Senior Stock, and thus carried.
In the case of WMECO's Proposal 3, it attained the necessary two-thirds
approving vote of all outstanding shares of each class of stock voting, and
thus carried.
86
PART II
Item 5. Market for the Registrants' Common Stock and Related
Shareholder Matters
NU. NU declared and paid quarterly dividends of $0.44 in 1993
and $0.44 in 1992. On January 24, 1994, the Board of Trustees
declared a dividend of $0.44 per share, payable on March 31, 1994 to
holders of record on March 1, 1994. The declaration of future
dividends may vary depending on capital requirements and income as
well as financial and other conditions existing at the time.
Information with respect to dividend restrictions for NU and its
subsidiaries is contained in Item 1. Business under the caption
"Financing Program--Financing Limitations" and in Note (b) to the
"Consolidated Statements of Common Shareholders' Equity" on page 34 of
NU's 1993 Annual Report to Shareholders and additional information
with respect to common shares is contained under the caption
"Shareholder Information" on page 54 of NU's 1993 Annual Report to
Shareholders, which information is incorporated herein by reference.
CL&P, PSNH, WMECO, and NAEC. The information required by this
item is not applicable because the common stock of CL&P, PSNH, WMECO,
and NAEC is held solely by NU.
Item 6. Selected Financial Data
NU. Reference is made to information under the heading "Selected
Consolidated Financial Data" contained on pages 50 and 51 of NU's 1993
Annual Report to Shareholders, which information is incorporated
herein by reference.
CL&P. Reference is made to information under the heading
"Selected Financial Data" contained on page 40 of CL&P's 1993 Annual
Report, which information is incorporated herein by reference.
PSNH. Reference is made to information under the heading
"Selected Financial Data" contained on pages 37 and 38 of PSNH's 1993
Annual Report, which information is incorporated herein by reference.
WMECO. Reference is made to information under the heading
"Selected Financial Data" contained on page 34 of WMECO's 1993 Annual
Report, which information is incorporated herein by reference.
NAEC. Reference is made to information under the heading
"Selected Financial Data" contained on page 23 of NAEC's 1993 Annual
Report, which information is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
NU. Reference is made to information under the heading
"Management's Discussion and Analysis" contained on pages 18 through
25 in NU's 1993 Annual Report to Shareholders, which information is
incorporated herein by reference.
87
CL&P. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 32 through 39 in CL&P's 1993
Annual Report, which information is incorporated herein by reference.
PSNH. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 30 through 35 in PSNH's 1993
Annual Report, which information is incorporated herein by reference.
WMECO. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 28 through 33 in WMECO's
1993 Annual Report, which information is incorporated herein by
reference.
NAEC. Reference is made to information under the heading
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained on pages 18 through 22 in NAEC's 1993
Annual Report, which information is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
NU. Reference is made to information under the headings "Company
Report," "Report of Independent Public Accountants," "Consolidated
Statements of Income," "Consolidated Statements of Cash Flows,"
"Consolidated Statements of Income Taxes," "Consolidated Balance
Sheets," "Consolidated Statements of Capitalization," "Consolidated
Statements of Common Shareholders' Equity," "Notes to Consolidated
Financial Statements," and "Consolidated Statements of Quarterly
Financial Data" contained on pages 26 through 49 in NU's 1993 Annual
Report to Shareholders, which information is incorporated herein by
reference.
CL&P. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
"Statements of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statements of Quarterly Financial Data" contained on pages 1 through
31 and page 40 in CL&P's 1993 Annual Report, which information is
incorporated herein by reference.
PSNH. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
Statements of Common Equity," "Notes to Financial Statements," "Report
of Independent Public Accountants," "Independent Auditors' Report,"
and "Statements of Quarterly Financial Data" contained on pages 1
through 29 and page 39 in PSNH's 1993 Annual Report, which information
is incorporated herein by reference.
WMECO. Reference is made to information under the headings
"Balance Sheets," "Statements of Income," "Statements of Cash Flows,"
"Statements of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statements of Quarterly Financial Data" contained on pages 1 through
27 and page 34 in WMECO's 1993 Annual Report, which information is
incorporated herein by reference.
88
NAEC. Reference is made to information under the headings
"Balance Sheet," "Statement of Income," "Statement of Cash Flows,"
"Statement of Common Stockholder's Equity," "Notes to Financial
Statements," "Report of Independent Public Accountants," and
"Statement of Quarterly Financial Data" contained on pages 1 through
17 and page 23 in NAEC's 1993 Annual Report which information is
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
No event that would be described in response to this item has
occurred with respect to NU, CL&P, PSNH, WMECO, or NAEC.
89
PART III
Item 10. Directors and Executive Officers of the Registrants
NU.
In addition to the information provided below concerning the executive
officers of NU, incorporated herein by reference are pages 1 through 12 of
the definitive proxy statement for solicitation of proxies by NU's Board of
Trustees, dated April 1, 1994 and filed with the Commission pursuant to Rule
14a-6 under the Securities Exchange Act of 1934 (the Act).
First First
Positions Elected Elected
Name Held an Officer a Trustee
William B. Ellis CHB, T 06/15/76 04/26/77
Bernard M. Fox P, CEO, T 05/01/83 05/20/86
CL&P.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert G. Abair D - 01/01/89
Robert E. Busch EVP, CFO, D 06/01/87 06/01/87
John P. Cagnetta SVP, D 06/17/81 05/09/83
William B. Ellis CH, D 06/15/76 06/15/76
Bernard M. Fox VC, D 05/15/81 05/01/83
William T. Frain, Jr. D - 02/01/94
Cheryl W. Grise SVP, D 06/01/91 01/01/94
John B. Keane D - 08/01/92
Francis L. Kinney SVP 04/24/74 -
Frank R. Locke (1) D 10/01/83 05/01/83
Hugh C. MacKenzie P, D 07/01/88 06/06/90
John W. Noyes VP, CONT 07/01/87 -
John F. Opeka D - 06/10/85
PSNH.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert E. Busch EVP, CFO, D 06/05/92 06/05/92
John C. Collins D - 10/19/92
William B. Ellis CH, D 06/05/92 06/05/92
William T. Frain, Jr. P, COO, D 03/18/71 02/01/94
Bernard M. Fox VC, CEO, D 06/05/92 06/05/92
Gerald Letendre D - 10/19/92
Frank R. Locke (1) P, COO, D 06/05/92 06/05/92
Hugh C. MacKenzie D - 02/01/94
Jane E. Newman D - 10/19/92
Dale F. Nitzschke D - 10/19/92
John W. Noyes VP, CONT 06/05/92 -
Robert P. Wax D - 02/01/93
90
WMECO.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert G. Abair D - 01/01/89
Robert E. Busch EVP, CFO, D 06/01/87 06/01/87
John P. Cagnetta SVP, D 06/17/81 05/09/83
William B. Ellis CH, D 06/15/76 06/15/76
Bernard M. Fox VC, D 05/15/81 05/01/83
William T. Frain D - 02/01/94
Cheryl W. Grise SVP, D 06/01/91 01/01/94
John B. Keane D - 08/01/92
Francis L. Kinney SVP 04/24/74 -
Frank R. Locke (1) D - 05/01/83
Hugh C. MacKenzie P, D 07/01/88 06/06/90
John W. Noyes VP, CONT 04/01/92 -
John F. Opeka D - 06/10/85
NAEC.
First First
Positions Elected Elected
Name Held an Officer a Director
Robert E. Busch P, CFO, D 10/21/91 10/16/91
John P. Cagnetta SVP, D 10/21/91 10/16/91
William B. Ellis CH, D 10/21/91 10/16/91
Ted C. Feigenbaum SVP, D 10/21/91 10/16/91
Bernard M. Fox VC, CEO, D 10/21/91 10/16/91
William T. Frain, Jr. D - 02/01/94
Cheryl W. Grise SVP, D 10/21/91 01/01/94
Francis L. Kinney SVP 10/21/91 -
John B. Keane D - 08/01/92
Frank R. Locke (1) SVP, CAO, D 10/21/91 10/16/91
Hugh C. MacKenzie D - 01/01/94
John W. Noyes VP, CONT 10/21/91 -
John F. Opeka EVP, D 10/21/91 10/16/91
KEY: CAO - Chief Administrative Officer EVP - Executive Vice President
CEO - Chief Executive Officer P - President
CFO - Chief Financial Officer SVP - Senior Vice President
CH - Chairman T - Trustee
CHB - Chairman of the Board VC - Vice Chairman
COO - Chief Operating Officer VP - Vice President
CONT - Controller
D - Director
(1) Resigned effective February 1, 1994.
91
Name Age Business Experience During Past 5 Years
Robert G. Abair (1) 55 Elected Vice President and Chief Administrative
Officer of WMECO in 1988.
Robert E. Busch (2) 47 Elected President and Chief Financial Officer
of NAEC in 1994; elected Executive Vice
President and Chief Financial Officer of NU,
CL&P, PSNH, and WMECO in 1992; previously
Executive Vice President and Chief Financial
Officer of NAEC since 1992; Senior Vice
President and Chief Financial Officer of NU,
CL&P and WMECO since 1990.
John P. Cagnetta (3) 61 Elected Senior Vice President of CL&P and WMECO
in 1987 and of NAEC in 1991.
John C. Collins (4) 49 Chief Executive Officer, The Hitchcock Clinic,
Dartmouth - Hitchcock Medical Center since
1977.
William B. Ellis 53 Elected Chairman of the Board of NU in 1993;
elected Chairman of CL&P, NAEC, PSNH and WMECO
in 1993; previously Chairman of the Board and
Chief Executive Officer of NU and Chairman and
Chief Executive Officer of CL&P and WMECO since
1987, NAEC since 1991 and PSNH since 1992.
Ted C. Feigenbaum 43 Elected Senior Vice President of NAEC in 1991;
previously Senior Vice President and Chief
Nuclear Officer of PSNH June, 1992 to
August, 1992; previously President and Chief
Executive Officer - New Hampshire Yankee
Division of PSNHOctober, 1990 to June, 1992 and
Chief Nuclear Production Officer of PSNH
January, 1990 to June, 1992; Senior Vice
President and Chief Operating Officer - New
Hampshire Yankee Division of PSNH (1989-1990)
and Vice President (1987-1989) - New Hampshire
Yankee Division of PSNH.
Bernard M. Fox (5) 51 Elected Vice Chairman of CL&P and WMECO, and
Vice Chairman and Chief Executive Officer of
NAEC, in 1994; previously Chief Executive
Officer of NU, CL&P, PSNH, WMECO and NAEC
in 1993; previously President and Chief
Operating Officer of NU, CL&P and WMECO in 1990
and NAEC since 1991; Vice Chairman of PSNH
since 1992; previously President and Chief
Operating and Financial Officer of NU, CL&P and
WMECO since 1987.
William T. Frain, Jr.(6) 52 Elected President and Chief Operating Officer
of PSNH in 1994; previously Senior Vice
President of PSNH since 1992; previously
Treasurer of PSNH since 1991 and Vice President
of PSNH since 1982.
92
Cheryl W. Grise 41 Elected Senior Vice President-Human Resources
and Administrative Services of CL&P, WMECO and
NAEC in 1994; previously Vice President-
Human Resources of NAEC since 1992 and of CL&P
and WMECO since 1991.
John B. Keane (7) 47 Elected Vice President and Treasurer of NU,
CL&P, PSNH, WMECO and NAEC in 1993; previously
Vice President, Secretary and General
Counsel-Corporate of NU, CL&P, PSNH, WMECO and
NAEC since February 1, 1993; previously Vice
President, Assistant Secretary and General
Counsel-Corporate of PSNH and NAEC, Vice
President, Secretary and General
Counsel-Corporate of NU and CL&P, and Vice
President, Secretary, Assistant Clerk and
General Counsel-Corporate of WMECO since 1992;
previously Associate General Counsel of NUSCO
since 1985.
Francis L. Kinney (8) 61 Elected Senior Vice President-
Governmental Affairs of CL&P, WMECO and NAEC in
1994; previously Vice President-Public Affairs
of NAEC since 1992 and of CL&P and WMECO since
1978.
Gerald Letendre 52 President, Diamond Casting & Machine Co., Inc.
since 1972.
Frank R. Locke 66 Resigned effective February 1, 1994; previously
President and Chief Operating Officer of PSNH
since in 1992 and Senior Vice President and
Chief Administrative Officer-New Hampshire of
NAEC since 1991; and of NUSCO since
1990; previously Senior Vice President of
NUSCO since 1988.
Hugh C. MacKenzie (9) 51 Elected President of CL&P and WMECO in 1994;
previously Senior Vice President-Customer
Service Operations of CL&P and WMECO since
1990; previously Vice President of CL&P and
WMECO since 1988.
Jane E. Newman (10) 48 President, Coastal Broadcasting Corporation
since 1992; previously Assistant to the
President of the United States for Management
and Administration from 1989 to 1991 and
President of the Business and Industry
Association of New Hampshire from 1985 to 1988.
Dale F. Nitzschke 56 President, University of New Hampshire, Durham,
New Hampshire since 1990; previously President,
Marshall University, Huntington, West Virginia
from 1984 to 1990.
John W. Noyes 46 Elected Vice President and Controller of NU,
CL&P, PSNH, WMECO and NAEC in 1992; previously
Vice President of CL&P and WMECO since 1987.
93
John F. Opeka (11) 53 Elected Executive Vice President - Nuclear of
NAEC in 1991 and of NUSCO in 1986, previously
Executive Vice President - Nuclear of CL&P
and WMECO from 1986 to 1993.
Robert P. Wax 45 Elected Vice President, Secretary and General
Counsel of NU and CL&P, Vice President,
Secretary, Assistant Clerk and General Counsel
of WMECO and Vice President, Assistant
Secretary and General Counsel of PSNH and NAEC
in 1993; previously Vice President and General
Counsel-Regulatory of NU, CL&P, PSNH, WMECO and
NAEC since 1992; previously Associate General
Counsel of NUSCO since 1985.
_____________________
(1) Trustee of Easthampton Savings Bank.
(2) Director Connecticut Yankee Atomic Power Company.
(3) Director of Connecticut Yankee Atomic Power Company.
(4) Director of Fleet Bank - New Hampshire.
(5) Chairman of the Board of The Institute of Living, and a Director of
Shawmut Bank Connecticut, N.A., Shawmut Bank, N.A. and Shawmut National
Corp., Mount Holyoke College, Connecticut Yankee Atomic Power Company and
The Dexter Corporation.
(6) Director of Connecticut Yankee Atomic Power Company, Maine Yankee Atomic
Power Company and Yankee Atomic Power Company.
(7) Director of Maine Yankee Atomic Power Company, Vermont Yankee Nuclear
Power Corporation and Yankee Atomic Power Company.
(8) Director of Mid-Conn Bank.
(9) Director of Connecticut Yankee Atomic Power Company.
(10) Director of Fleet Bank - New Hampshire, Perini Corporation and New
England Telephone.
(11) Director of Connecticut Yankee Atomic Power Company, Maine Yankee Atomic
Power Company, Vermont Yankee Nuclear Power Corporation and Yankee
Atomic Electric Company.
There are no family relationships between any director or executive
officer and any other director or executive officer of NU, CL&P, PSNH, WMECO
or NAEC.
Item 11. Executive Compensation
NU.
Incorporated herein by reference are pages 7 through 12 of the definitive
proxy statement for solicitation of proxies by NU's Board of Trustees, dated
April 1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the
Act.
94
SUMMARY COMPENSATION TABLE
CL&P, PSNH, WMECO, and NAEC.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table presents the cash and non-cash compensation received
by the five highest-paid executive officers of CL&P, PSNH, WMECO and NAEC, in
accordance with rules of the Securities and Exchange Commission (SEC):
Annual Compensation Long Term Compensation
------------------------------ ----------------------------------------
Awards Payouts
----------------------- ----------------
Name and Year Salary Bonus ($) Other Restricted Options/ Long All Other
Principal Position ($) (Note 1) Annual Award(s) Stock Term Compensa-
Compen- ($) Apprecia- Incentive tion ($)
sation (Note 1) tion Program (Note 3)
($) (Note 2) Rights(#) Payouts
($)
- ---------------- ------- ------- ---------- ------- ---------- --------- -------- ---------
Bernard M. Fox 1993 478,775 (Note 4) None None None 61,155 7,033
President and 1992 424,517 54,340 None None None 19,493 6,860
Chief Executive 1991 402,333 103,872 None 38,173 None 15,398 3,380
Officer (Note 5)
- --------------------------------------------------------------------------------------------------------
William B. Ellis 1993 521,250 (Note 4) None None None 87,363 None
Chairman 1992 522,212 97,029 None None None 30,707 None
(Note 5) 1991 500,000 185,519 None 54,608 None 24,451 None
- --------------------------------------------------------------------------------------------------------
John F. Opeka 1993 277,304 (Note 4) None None None 40,014 6,875
Executive Vice 1992 268,958 19,644 None None None 14,017 6,813
President 1991 260,600 49,676 None 28,498 None 11,184 3,385
- --------------------------------------------------------------------------------------------------------
Robert E. Busch 1993 255,915 (Note 4) None None None 32,337 7,072
Executive Vice 1992 236,654 27,934 None None None 10,040 6,866
President 1991 212,333 46,597 None 23,026 None 7,444 3,185
- --------------------------------------------------------------------------------------------------------
John P. Cagnetta 1993 208,900 (Note 4) None None None 29,679 6,134
Senior Vice 1992 200,462 21,635 None None None 10,730 6,014
President 1991 194,266 35,446 None 17,893 None 8,909 2,913
- --------------------------------------------------------------------------------------------------------
95
Notes:
1. Until 1991, awards under the short-term programs of the Northeast tilities
Executive Incentive Compensation Program (EICP) were made in restricted
stock. In 1991, the Northeast Utilities Executive Incentive Plan (EIP)
was adopted, which did not require restricted stock awards. Awards under
the 1991 and 1992 short-term programs under the EIP were paid in 1992 and
1993, respectively, in the form of unrestricted stock and, in accordance
with the requirements of the SEC, are included as "bonus" in the years
earned.
2. The five executive officers listed in the table above each received an
award of restricted stock in May, 1991 (which vested in January, 1993),
under the EICP. The number of shares in each such award is shown below.
All restricted stock awards under the EICP vested prior to December 31,
1993.
Name Shares
B. M. Fox 1,807
W. B. Ellis 2,585
J. F. Opeka 1,349
R. E. Busch 1,090
J. P. Cagnetta 847
3. "All Other Compensation" consists of employer matching contributions under
the Northeast Utilities Service Company Supplemental Retirement and
Savings Plan (401(k) Plan), generally available to all eligible
employees. In 1993, the employer match for non-union employees was 100
percent of the first three percent of compensation contributed on a
before-tax basis.
4. Awards under the short-term program of the EIP have typically been made by
NU's Committee on Organization, Compensation and Board Affairs in April
each year. Based on preliminary estimates of corporate performance, and
assuming that the individual performance levels of Messrs. Opeka, Busch
and Cagnetta approximate those of other system officers, it is estimated
that the five executive officers listed in the table above would receive
the following awards: Mr. Fox - $180,780; Mr. Ellis - $160,693;
Mr. Busch - $64,946; Mr. Opeka - $64,946; and Dr. Cagnetta - $43,828.
5. Mr. Fox served as President and Chief Operating Officer of CL&P, NAEC and
WMECO and Vice Chairman and Chief Operating Officers of PSNH until July 1,
1993, when he became President and Chief Executive Officer of CL&P, NAEC
and WMECO and Vice Chairman and Chief Executive Officer of PSNH. Mr.
Ellis served as Chairman and Chief Executive Officer of these companies
until July 1, 1993, when he became Chairman. Amounts listed in the "Long
Term Incentive Program" column of the Summary Compensation Table for 1993
were received by these individuals prior to their change in
responsibilities. $267,500 of Mr. Ellis's 1993 salary was paid prior to
July 1, 1993, while he was Chief Executive Officer, and $253,750 was paid
after July 1, 1993. $217,500 of Mr. Fox's 1993 salary was paid prior to
July 1, 1993, and $261,275 was paid after Mr. Fox became Chief Executive
Officer on July 1, 1993.
96
PENSION BENEFITS
The following table shows the estimated annual retirement benefits
payable to an executive officer of NU, CL&P, WMECO, PSNH and NAEC upon
retirement, assuming that retirement occurs at age 65 and that the
officer is at that time not only eligible for a pension benefit under the
Northeast Utilities Service Company Retirement Plan (the Retirement Plan) but
also eligible for the "make-whole benefit" and the "target benefit"
under the Supplemental Executive Retirement Plan for Officers of Northeast
Utilities System Companies (the Supplemental Plan). The Supplemental Plan is
a non-qualified pension plan providing supplemental retirement income to System
officers. The "make-whole benefit" under the Supplemental Plan makes up for
benefits lost through application of certain tax code limitations on the
benefits that may be provided under the Retirement Plan, and is available to all
officers. The "target benefit" further supplements these benefits and is
available to officers at the Senior Vice President level and higher who are
selected by the NU Board of Trustees to participate in the target benefit and
who remain in the employ of NU companies until at least age 60 (unless the NU
Board of Trustees sets an earlier age). Each of the executive officers of NU,
CL&P, WMECO, PSNH and NAEC named in the summary compensation table above is
currently eligible for a target benefit. If an executive officer were not
eligible for a target benefit at the time of retirement, a lower level of
retirement benefits would be paid.
The benefits presented are based on a straight life annuity beginning at
age 65 and do not take into account any reduction for joint and survivorship
annuity payments.
Years of Credited Service
Final Average ------------------------------------------------------
Compensation 15 20 25 30 35
- ------------------ ------------------------------------------------------
$ 125,000 $ 45,000 $ 60,000 $ 75,000 $ 75,000 $ 75,000
$ 150,000 $ 54,000 $ 72,000 $ 90,000 $ 90,000 $ 90,000
$ 175,000 $ 63,000 $ 84,000 $105,000 $105,000 $105,000
$ 200,000 $ 72,000 $ 96,000 $120,000 $120,000 $120,000
$ 225,000 $ 81,000 $108,000 $135,000 $135,000 $135,000
$ 250,000 $ 90,000 $120,000 $150,000 $150,000 $150,000
$ 300,000 $108,000 $144,000 $180,000 $180,000 $180,000
$ 350,000 $126,000 $168,000 $210,000 $210,000 $210,000
$ 400,000 $144,000 $192,000 $240,000 $240,000 $240,000
$ 450,000 $162,000 $216,000 $270,000 $270,000 $270,000
$ 500,000 $180,000 $240,000 $300,000 $300,000 $300,000
$ 600,000 $216,000 $288,000 $360,000 $360,000 $360,000
$ 700,000 $252,000 $336,000 $420,000 $420,000 $420,000
$ 800,000 $288,000 $384,000 $480,000 $480,000 $480,000
Final average compensation for purposes of calculating the "target
benefit" is the highest average annual compensation of the participant during
any 36 consecutive months compensation was earned. Compensation taken into
account under the "target benefit" described above includes salary, bonus,
restricted stock awards, and long-term incentive payouts shown in the Summary
Compensation Table above, but does not include employer matching contributions
under the Northeast Utilities Service Company Supplemental Retirement and
Savings Plan (401(k)) Plan. In the event that an officer's employment
terminates because of disability, the retirement benefits shown above would be
offset by the amount of any disability benefits payable to the recipient that
are attributable to contributions made by NU and its subsidiaries under long
term disability plans and policies.
97
As of December 31, 1993, the five executive officers named in the Summary
Compensation Table above had the following years of credited service for
retirement compensation purposes: Mr. Fox - 29, Mr. Ellis - 17, Mr. Opeka -
23, Mr. Busch - 20 and Dr. Cagnetta - 21. Assuming that retirement were to
occur at age 65 for these officers, retirement would occur with 43, 29, 35, 38
and 25 years of credited service, respectively.
NU has entered into agreements with Messrs. Ellis and Fox to provide for
an orderly management succession. The agreement with Mr. Ellis calls for him
to work with the NU Board of Trustees and Mr. Fox to effect the orderly
transition of his responsibilities to Mr. Fox. In accordance with the
agreement, Mr. Ellis stepped down as Chief Executive Officer of NU, CL&P, WMECO,
PSNH and NAEC as of July 1, 1993. The agreement anticipates his retirement as
of August 1, 1995.
The agreement provides that, upon his retirement, Mr. Ellis will be
entitled to receive from NU and its subsidiaries a target benefit under the
Supplemental Plan. His target benefit will be based on the greater of his
actual final average compensation or an amount determined as if his salary had
increased each year since 1991 at a rate equal to the average rate of the
increases of all other target benefit participants and as if he had received
incentive awards each year based on this modified salary, but with the same
performance as the Chief Executive Officer at the time. The agreement also
provides specified death and disability benefits for the period before Mr.
Ellis's 1995 retirement.
The agreement with Mr. Fox states that if he is terminated as Chief
Executive Officer without cause, he will be entitled to specified severance pay
and benefits. Those benefits consist primarily of (i) two years' base pay,
medical, dental and life insurance benefits, (ii) a supplemental retirement
benefit equal to the difference between the target benefit he would be entitled
to receive if he had reached the age of 55 on the termination date and the
actual target benefit to which he is entitled as of the termination date, and
(iii) a target benefit under the Supplemental Plan, notwithstanding that he
might not have reached age 60 on the termination date and notwithstanding other
forfeiture provisions of that plan. The agreement also provides specified death
and disability benefits. The agreement terminates two years after NU gives
Mr. Fox a notice of termination, but no earlier than the date he becomes 55.
The agreements do not address the officers' normal compensation and
benefits, which are to be determined by NU's Committee on Organization,
Compensation and Board Affairs and the NU Board of Trustees in accordance with
their customary practices.
Item 12. Security Ownership of Certain Beneficial Owners and Management
NU.
Incorporated herein by reference are pages 5 through 12 of the definitive
proxy statement for solicitation of proxies by NU's Board of Trustees, dated
April 1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the
Act.
CL&P, PSNH, WMECO and NAEC.
As of February 28, 1994, the Directors of CL&P, PSNH, WMECO and NAEC,
beneficially owned the following number of shares of each class of equity
securities of NU. No equity securities of CL&P, PSNH or WMECO are owned by the
Directors and Executive Officers.
98
CL&P, PSNH, WMECO, and NAEC DIRECTORS AND NAMED EXECUTIVE OFFICERS
Amount and
Nature of
Title Of Name of Beneficial Percent of
Class Beneficial Owner Ownership (1) Class (2)
NU Common Robert G. Abair (3) (621) 4,271 shares
NU Common Robert E. Busch (772) 6,054 shares
NU Common John P. Cagnetta (4) (581) 3,979 shares
NU Common John C. Collins (5) 0 shares
NU Common William B. Ellis (6) (1,259) 14,837 shares
NU Common Ted C. Feigenbaum(7) 151 shares
NU Common Bernard M. Fox (8) (1,072) 17,428 shares
NU Common William T. Frain, Jr. 885 shares
NU Common Cheryl W. Grise (221) 1,349 shares
NU Common John B. Keane (9) (368) 1,146 shares
NU Common Francis L. Kinney (10) (303) 3,781 shares
NU Common Gerald Letendre (5) 0 shares
NU Common Hugh C. MacKenzie (4)(11) (779) 4,277 shares
NU Common Jane E. Newman (5) 0 shares
NU Common Dale F. Nitzschke (5) 0 shares
NU Common John W. Noyes (658) 2,789 shares
NU Common John F. Opeka (4)(12) (1,075) 16,463 shares
NU Common Robert P. Wax (5) (651) 1,436 shares
Amount beneficially owned by Directors
and Executive Officers as a group - CL&P (7,709) 77,259 shares
- PSNH (6,790) 69,299 shares
- WMECO (7,709) 77,259 shares
- NAEC (7,088) 73,139 shares
(1) Unless otherwise noted, each Director and Executive Officer of CL&P, PSNH,
WMECO and NAEC has sole voting and investment power with respect to the
listed shares. The numbers in parentheses reflect the number of shares
owned by each Director and Executive Officer under the Northeast
Utilities Service Company Supplemental Retirement and Savings Plan (401(k)
Plan), as to which the Officer has no investment power.
(2) As of February 28, 1994 there were 134,208,461 common shares of NU
outstanding. The percentage of such shares beneficially owned by any
Director or Executive Officer, or by all Directors and Executive Officers
of CL&P, PSNH, WMECO and NAEC as a group, does not exceed one percent.
(3) Mr. Abair is a Director of CL&P and WMECO only.
(4) Mr. Opeka and Dr. Cagnetta are not officers of PSNH, but each in his
capacity as an officer (with the stated title) of NUSCO, an affiliate of
PSNH, performs policy-making functions for PSNH.
(5) Messrs. Collins, Letendre, Nitzschke and Wax and Ms. Newman areDirectors
of PSNH only.
(6) Mr. Ellis shares voting and investment power with his wife for 1,117
shares.
(7) Mr. Feigenbaum is a Director and an Executive Officer of NAEC only.
99
(8) Mr. Fox shares voting and investment power with his wife for 3,031 of
these shares. In addition, Mr. Fox's wife has sole voting and investment
power for 140 shares, as to which Mr. Fox disclaims beneficial ownership.
(9) Mr. Keane is a Director of CL&P, WMECO and NAEC only.
(10) Mr. Kinney shares voting and investment power with his wife for 2,155
shares.
(11) Mr. MacKenzie shares voting and investment power with his wife for 1,259
shares.
(12) Mr. Opeka shares voting and investment power with his wife for 1,718
shares.
Item 13. Certain Relationships and Related Transactions
NU.
Incorporated herein by reference is page 14 of the definitive proxy
statement for solicitation of proxies by NU's Board of Trustees, dated April
1, 1994 and filed with the Commission pursuant to Rule 14a-6 under the Act.
CL&P, PSNH, WMECO and NAEC.
No relationships or transactions that would be described in response
to this item exist now or existed during 1993 with respect to CL&P, PSNH, WMECO
and NAEC.
100
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
(a) 1. Financial Statements:
The Report of Independent Public Accountants and
financial statements of NU, CL&P, PSNH, WMECO, and NAEC
are hereby incorporated by reference and made a part of
this report (see "Item 8. Financial Statements and
Supplementary Data").
Reports of Independent Public Accountants
on Schedules S-1
Consents of Independent Public Accountants S-3
2. Schedules:
Financial Statement Schedules for NU
(Parent), NU and Subsidiaries, CL&P,
PSNH, WMECO, and NAEC are listed
in the Index to Financial Statement
Schedules S-5
3. Exhibits Index E-1
(b) Reports on Form 8-K:
During the fourth quarter of 1993, the companies
filed Form 8-Ks dated December 2, 1993 disclosing
the following:
o On December 2, 1993, the Northeast Utilities
system announced a reorganization of its corporate
structure.
o On December 3, 1993, NNECO was informed by the NRC
that it was being assessed a civil penalty in
response to repair activities at Millstone 2.
In addition, the Form 8-K dated December 2, 1993 which
was filed by PSNH also discussed the following:
o On June 8, 1992, PSNH changed its independent
public accountant.
101
NORTHEAST UTILITIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NORTHEAST UTILITIES
-------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------------
William B. Ellis
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Trustee and Chairman /s/ William B. Ellis
- -------------- of the Board -------------------------
William B. Ellis
March 18, 1994 Trustee, President /s/ Bernard M. Fox
- -------------- and Chief Executive -------------------------
Officer Bernard M. Fox
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President and Chief -------------------------
Financial Officer Robert E. Busch
March 18, 1994 Vice President and /s/ John B. Keane
- -------------- Treasurer -------------------------
John B. Keane
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller -------------------------
John W. Noyes
102
NORTHEAST UTILITIES
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Trustee /s/ Cotton Mather Cleveland
- -------------- ---------------------------
Cotton Mather Cleveland
March 18, 1994 Trustee /s/ George David
- -------------- ---------------------------
George David
March 18, 1994 Trustee /s/ Donald J. Donahue
- -------------- ---------------------------
Donald J. Donahue
March 18, 1994 Trustee /s/ Eugene D. Jones
- -------------- ---------------------------
Eugene D. Jones
March 18, 1994 Trustee /s/ Elizabeth T. Kennan
- -------------- ---------------------------
Elizabeth T. Kennan
Trustee
- -------------- ---------------------------
Denham C. Lunt, Jr.
March 18, 1994 Trustee /s/ William J. Pape II
- -------------- ---------------------------
William J. Pape II
March 18, 1994 Trustee /s/ Robert E. Patricelli
- -------------- ---------------------------
Robert E. Patricelli
Trustee
- -------------- ---------------------------
Norman C. Rasmussen
Trustee
- -------------- ---------------------------
John F. Swope
103
THE CONNECTICUT LIGHT AND POWER COMPANY
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE CONNECTICUT LIGHT AND POWER COMPANY
---------------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman and /s/ Bernard M. Fox
- -------------- Director --------------------------
Bernard M. Fox
March 18, 1994 President and Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
104
THE CONNECTICUT LIGHT AND POWER COMPANY
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
- ------------------- Director --------------------------
Robert G. Abair
March 18, 1994 Director /s/ John P. Cagnetta
- ------------------- --------------------------
John P. Cagnetta
March 18, 1994 Director /s/ William T. Frain, Jr.
- ------------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- ------------------- -----------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- ------------------- -----------------------
John B. Keane
March 18, 1994 Director /s/ John F. Opeka
- ------------------- -----------------------
John F. Opeka
105
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
---------------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- -------------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman, Chief /s/ Bernard M. Fox
- -------------- Executive Officer and --------------------------
Director Bernard M. Fox
March 18, 1994 President, Chief /s/ William T. Frain, Jr.
- -------------- Operating Officer --------------------------
and Director William T. Frain, Jr.
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
106
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Director /s/ John C. Collins
- ------------------- --------------------------
John C. Collins
March 18, 1994 Director /s/ Gerald Letendre
- ------------------- --------------------------
Gerald Letendre
March 18, 1994 Director /s/ Hugh C. MacKenzie
- ------------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Director /s/ Jane E. Newman
- ------------------- --------------------------
Jane E. Newman
March 18, 1994 Director /s/ Dale S. Nitzschke
- ------------------- --------------------------
Dale S. Nitzschke
March 18, 1994 Director /s/ Robert P. Wax
- ------------------- --------------------------
Robert P. Wax
107
WESTERN MASSACHUSETTS ELECTRIC COMPANY
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WESTERN MASSACHUSETTS ELECTRIC COMPANY
--------------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- --------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman and /s/ Bernard M. Fox
- -------------- Director --------------------------
Bernard M. Fox
March 18, 1994 President and Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Executive Vice /s/ Robert E. Busch
- -------------- President, Chief --------------------------
Financial Officer Robert E. Busch
and Director
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
108
WESTERN MASSACHUSETTS ELECTRIC COMPANY
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
- ------------------- Director --------------------------
Robert G. Abair
March 18, 1994 Director /s/ John P. Cagnetta
- ------------------- --------------------------
John P. Cagnetta
March 18, 1994 Director /s/ William T. Frain, Jr.
- ------------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- ------------------- -----------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- ------------------- -----------------------
John B. Keane
March 18, 1994 Director /s/ John F. Opeka
- ------------------- -----------------------
John F. Opeka
109
NORTH ATLANTIC ENERGY CORPORATION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
NORTH ATLANTIC ENERGY CORPORATION
---------------------------------
(Registrant)
Date: March 18, 1994 By /s/ William B. Ellis
-------------- ---------------------
William B. Ellis
Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Date Title Signature
---- ----- ---------
March 18, 1994 Chairman and Director /s/ William B. Ellis
- -------------- --------------------------
William B. Ellis
March 18, 1994 Vice Chairman, Chief /s/ Bernard M. Fox
- -------------- Executive Officer and --------------------------
Director Bernard M. Fox
March 18, 1994 President, Chief /s/ Robert E. Busch
- -------------- Operating Officer --------------------------
and Director Robert E. Busch
March 18, 1994 Vice President and /s/ John W. Noyes
- -------------- Controller --------------------------
John W. Noyes
110
NORTH ATLANTIC ENERGY CORPORATION
SIGNATURES (CONT'D)
Date Title Signature
---- ----- ---------
March 18, 1994 Director /s/ John P. Cagnetta
- -------------- --------------------------
John P. Cagnetta
- -------------- Director --------------------------
Ted C. Feigenbaum
March 18, 1994 Director /s/ William T. Frain. Jr.
- -------------- --------------------------
William T. Frain, Jr.
March 18, 1994 Director /s/ Cheryl W. Grise
- -------------- --------------------------
Cheryl W. Grise
March 18, 1994 Director /s/ John B. Keane
- -------------- --------------------------
John B. Keane
March 18, 1994 Director /s/ Hugh C. MacKenzie
- -------------- --------------------------
Hugh C. MacKenzie
March 18, 1994 Director /s/ John F. Opeka
- -------------- --------------------------
John F. Opeka
111
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
We have audited in accordance with generally accepted auditing
standards, the financial statements included in Northeast Utilities'
annual report to shareholders and The Connecticut Light and Power
Company's, Western Massachusetts Electric Company's, North Atlantic
Energy Corporation's, and Public Service Company of New Hampshire's
annual reports, incorporated by reference in this Form 10-K, and have
issued our reports thereon dated February 18, 1994. Our reports on the
financial statements include an explanatory paragraph with respect to the
change in methods of accounting for property taxes, postretirement
benefits other than pensions, income taxes, and employee stock ownership
plans, as applicable to each company, as explained in Note 1 to the
related company's financial statements. Our audits were made for the
purpose of forming an opinion on each company's statements taken as a
whole. The schedules listed in the index to financial statement schedules are
the responsibility of each company's management and are presented for
purposes of complying with the Securities and Exchange Commission's rules
and are not part of each company's basic financial statements. The
schedules have been subjected to the auditing procedures applied in the
audits of each company's basic financial statements and, in our opinion,
fairly state in all material respects the financial data required to be
set forth therein in relation to each company's basic financial
statements taken as a whole.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
February 18, 1994
S-1
INDEPENDENT AUDITORS' REPORT ON SCHEDULES
The Board of Directors
Public Service Company of New Hampshire:
Under date of February 7, 1992, we reported on the balance sheet and
statement of capitalization of Public Service Company of New Hampshire as
of December 31, 1991 (not presented in the 1993 annual report to
stockholders) and the related statements of income, cash flows and common
stock equity for the periods January 1, 1991 to May 15, 1991 and May 16,
1991 to December 31, 1991, as contained in the annual report to
stockholders of Public Service Company for the year 1993. These
financial statements and our report thereon are incorporated by reference
herein. In connection with our audits of the aforementioned financial
statements, we have also audited the related financial statement
schedules as listed in the accompanying index. These financial statement
schedules are the responsibility of the Company's management. Our
responsiblity is to express an opinion on these financial statement
schedules based on our audit.
In our opinion, such financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massachusetts
February 7, 1992
S-2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our reports in this Form 10-K, into previously filed
Registration Statement No. 33-13444, No. 33-46291 , No. 33-59430, and No.
33-50853 of The Connecticut Light and Power Company, No. 33-34886, No.
33-51185 and No. 33-25619 of Western Massachusetts Electric Company, and No.
33-34622 and No. 33-40156 of Northeast Utilities.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
March 18, 1994
S-3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Public Service Company of New Hampshire:
We consent to the use of our reports included or incorporated by
reference herein.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Boston, Massaschusetts
March 18, 1994
S-4
INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule Page
- -------- ----
III. Financial Information of Registrant:
Northeast Utilities (Parent) Balance
Sheets 1993 and 1992 S-7
Northeast Utilities (Parent) Statements
of Income 1993, 1992, and 1991 S-8
Northeast Utilities (Parent) Statements
of Cash Flows 1993, 1992, and 1991 S-9
V. Utility Plant 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-10 -- S-12
The Connecticut Light and Power Company S-13 -- S-15
Public Service Company of New Hampshire S-16 -- S-20
Western Massachusetts Electric Company S-21 -- S-23
North Atlantic Energy Corporation S-24 -- S-25
V. Nuclear Fuel 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-26 -- S-28
The Connecticut Light and Power Company S-29 -- S-31
Public Service Company of New Hampshire S-32 -- S-36
Western Massachusetts Electric Company S-37 -- S-39
North Atlantic Energy Corporation S-40 -- S-41
VI. Accumulated Provision for Depreciation
of Utility Plant 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-42 -- S-44
The Connecticut Light and Power Company S-45
Public Service Company of New Hampshire S-46 -- S-48
Western Massachusetts Electric Company S-49
North Atlantic Energy Corporation S-50
VIII. Valuation and Qualifying Accounts and Reserves
1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-51 -- S-53
The Connecticut Light and Power Company S-54 -- S-56
Public Service Company of New Hampshire S-57 -- S-61
Western Massachusetts Electric Company S-62 -- S-64
S-5
Schedule Page
- -------- ----
IX. Short-Term Borrowings 1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-65
The Connecticut Light and Power Company S-66
Public Service Company of New Hampshire S-67
Western Massachusetts Electric Company S-68
North Atlantic Energy Corporation S-69
X. Supplementary Income Statement Information
1993, 1992, and 1991:
Northeast Utilities and Subsidiaries S-70
The Connecticut Light and Power Company S-71
Public Service Company of New Hampshire S-72
Western Massachusetts Electric Company S-73
North Atlantic Energy Corporation S-74
All other schedules of the companies' for which provision is made in
the applicable regulations of the Securities and Exchange Commission are
not required under the related instructions or are not applicable, and
therefore have been omitted.
S-6
SCHEDULE III
NORTHEAST UTILITIES (PARENT)
----------------------------
FINANCIAL INFORMATION OF REGISTRANT
-----------------------------------
BALANCE SHEETS
--------------
AT DECEMBER 31, 1993 AND 1992
------------------------------
(Thousands of Dollars)
1993 1992
---------- ----------
ASSETS
- ------
Other Property and Investments:
Investments in subsidiary companies, at
equity............................................... $2,505,950 $2,428,669
Investments in transmission companies, at equity...... 26,535 27,655
Other, at cost........................................ 1,710 1,742
----------- -----------
2,534,195 2,458,066
----------- -----------
Current Assets:
Cash and special deposits............................. 72 73
Notes receivable from affiliated companies............ 19,625 52,600
Taxes receivable...................................... 485 -
Receivables from affiliated companies................. 32,638 7,626
Prepayments........................................... 73 11
----------- -----------
52,893 60,310
----------- -----------
Deferred Charges:
Accumulated deferred income taxes..................... 5,859 2,660
Unamortized debt expense.............................. 45 50
Other................................................. 42 165
----------- -----------
5,946 2,875
----------- -----------
Total Assets..................................... $2,593,034 $2,521,251
=========== ===========
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization:
Common Shareholders' Equity:
Common shares, $5 par value--Authorized
225,000,000 shares; 134,207,025 shares issued and
124,326,836 shares outstanding in 1993 and
133,862,919 shares issued and outstanding in 1992... $ 671,035 $ 669,315
Capital surplus, paid in.............................. 901,740 897,317
Deferred benefit plan--employee stock ownership plan.. (228,205) (240,399)
Retained earnings..................................... 879,518 847,744
----------- -----------
Total common shareholders' equity................... 2,224,088 2,173,977
Long-term debt........................................ 236,000 245,000
----------- -----------
Total capitalization................................ 2,460,088 2,418,977
----------- -----------
Current Liabilities:
Notes payable to banks................................ 72,500 70,500
Long-term debt and preferred stock--current portion... 9,000 5,000
Accounts payable...................................... 5,048 6,107
Accounts payable to affiliated companies.............. 42,459 14,334
Accrued taxes......................................... - 2,283
Accrued interest...................................... 3,311 3,491
Other................................................. 13 13
----------- -----------
132,331 101,728
----------- -----------
Other Deferred Credits.................................. 615 546
----------- -----------
Total Capitalization and Liabilities $2,593,034 $2,521,251
=========== ===========
S-7
SCHEDULE III
NORTHEAST UTILITIES (PARENT)
----------------------------
FINANCIAL INFORMATION OF REGISTRANT
-----------------------------------
STATEMENTS OF INCOME
--------------------
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
---------------------------------------------
(Thousands of Dollars Except Share Information)
1993 1992 1991
------------- ------------- -------------
Operating Revenues............... $ - $ - $ -
------------- ------------- -------------
Operating Expenses:
Other.......................... 2,677 (22,915) 3,128
Federal income taxes........... (7,564) 12,736 (2,231)
------------- ------------- -------------
Total operating epenses....... (4,887) (10,179) 897
------------- ------------- -------------
Operating Income (Loss).......... 4,887 10,179 (897)
------------- ------------- -------------
Other Income:
Equity in earnings of
subsidiaries.................. 263,725 238,624 234,552
Equity in earnings of
transmission companies........ 3,736 4,141 4,229
Other, net..................... 1,302 6,439 1,959
------------- ------------- -------------
Other income, net............ 268,763 249,204 240,740
------------- ------------- -------------
Income before interest
charges..................... 273,650 259,383 239,843
------------- ------------- -------------
Interest Charges................. 23,697 3,329 3,134
------------- ------------- -------------
Net Income ...................... 249,953 256,054 236,709
Tax benefit of Employee Stock
Ownership Plan dividends........ - 7,348 -
------------- ------------- -------------
Earnings For Common Shares....... $ 249,953 $ 263,402 $ 236,709
============= ============= =============
Earnings Per Common Share........ $ 2.02 $ 2.02 $ 2.12
============= ============= =============
Common Shares Outstanding
(average)....................... 123,947,631 130,403,488 111,453,550
============= ============= =============
S-8
SCHEDULE III
NORTHEAST UTILITIES (PARENT)
FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
1993 1992 1991
CASH FLOWS FROM OPERATIONS:
Net income . . . . . . . . . . . . . . $ 249,953 $ 256,054 $ 236,709
Adjusted for the following:
Equity in earnings of subsidiary
companies . . . . . . . . . . . . . (263,725) (238,624) (234,552)
Cash dividends received from
subsidiary companies. . . . . . . . 191,297 196,267 207,319
Deferred income taxes. . . . . . . . (3,199) 7,382 (2,232)
Other sources of cash. . . . . . . . 197 19,244 4,332
Other uses of cash . . . . . . . . . (3,915) (1,346) (4,292)
Changes in working capital:
Accounts receivable. . . . . . . . 7,963 165,021 (174,631)
Accounts payable . . . . . . . . . 27,066 (4,528) 19,392
Other working capital
(excludes cash) . . . . . . . . . (3,010) (4,203) 1,776
-------- --------- --------
Net cash flows from operations. . . . 202,627 395,267 53,821
-------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares. . . . . . . . . . . . 22,252 271,128 42,420
Long-term debt . . . . . . . . . . . (5,000) 75,000 175,000
Financing expenses . . . . . . . . . - (4,597) -
Net increase (decrease) in
short-term debt. . . . . . . . . . 2,000 70,500 (67,000)
Cash dividends paid on common
shares. . . . . . . . . . . . . . . (218,179) (229,074) (195,056)
-------- -------- --------
Net cash flows from (used for) financing
activities. . . . . . . . . . . . . . (198,927) 182,957 (44,636)
-------- -------- --------
INVESTMENT ACTIVITIES:
Investments in subsidiaries. . . . . (4,853) (592,715) (2,601)
Other, at cost. . . . . . . . . . . 1,152 (83) -
-------- -------- --------
Net cash flows used for investment
activities. . . . . . . . . . . . . (3,701) (592,798) (2,601)
-------- -------- --------
NET INCREASE IN CASH (DECREASE):
For the Period . . . . . . . . . . . (1) (14,574) 6,584
Cash beginning of period . . . . . . 73 14,647 8,063
-------- -------- --------
Cash end of period . . . . . . . . . $ 72 $ 73 $ 14,647
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid (received) during the year
for interest . . . . . . . . . . . . . $ 23,808 $ (11,419) $ 2,118
======== ======== ========
Income tax refund . . . . . . . . . . . $ - $ (4,277) $ -
======== ======== ========
S-9
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 8,945,429 $ 231,332 $ 59,917 $ (2,768)<F1> $ 9,114,133
(8)<F2>
65 <F3>
Other 132,537 7,054 1,273 (1,185)<F1> 146,011
184<F4>
8,694<F6>
Construction Work in Progress
Electric 140,967 37,326 - (603)<F200> 177,690
Other 23,407 7,647 - (184)<F4> 30,394
(476)<F2>
Utility Plant Held for Future Use
Electric 5,876 - - (725)<F5> 5,151
Other 218 - - - 218
----------- ---------- ---------- ---------- -----------
TOTAL $ 9,248,434 $ 283,359 $ 61,190 $ 2,994 $ 9,473,597
=========== ========== ========== ========== ===========
<FN>
<F1> Amortization of capital leases charged to expense and construction overheads.
<F2> Adjust COE additions.
<F3> Correction of prior retirements.
<F4> Transfers between Utility Plant in Service and Constructin Work in Progress.
<F5> Transfer of land associated with two cancelled qualifying cogeneration facilities
to deferred debits.
<F6> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet Accounts.
<F200>Transfer between Construction Work in Progress and Miscellaneous Balance
Sheet accounts.
S-10
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1992
(THOUSANDS OF DOLLARS)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- ----------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $6,898,392 $ 334,367 $ 120,319 $ 1,837,120 <F7> $ 8,945,429
(1,198)<F8>
(2,137)<F9>
(796)<F10>
Other 103,561 27,781 2 (740)<F9> 132,537
1,937 <F10>
Construction Work in Progress
Electric 164,264 (34,196) - 9,522 <F7> 140,967
774 <F10>
603 <F201>
Other 36,579 (11,204) - (1,968)<F10> 23,407
Utility Plant Held for Future Use
Electric 527 662 - 4,687 <F7> 5,876
Other 218 - - - 218
---------- ----------- ----------- ----------- -----------
TOTAL $7,203,541 $ 317,410 $ 120,321 $ 1,847,804 $ 9,248,434
========== =========== =========== =========== ===========
<FN>
<F7> Plant assets - Public Service Company of New Hampshire acquisition.
<F8> Sale of plant assets.
<F9> Amortization of capital leases charged to expense and construction overheads.
<F10> Transfers between Utility Plant in Service and Construction Work in Progress.
<F201>Transfers between Construction Work in Progress and Miscellaneous Balance
Sheet accounts.
S-11
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1991
(THOUSANDS OF DOLLARS)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 6,752,985 $ 226,378 $ 79,159 $ (1,914)<F11> $ 6,898,392
18 <F12>
161 <F13>
(77)<F14>
Other 100,634 5,846 4,279 (1,685)<F11> 103,561
3,052 <F12>
(7)<F14>
Construction Work in Progress
Electric 163,561 732 - (18)<F12> 164,264
(11)<F14>
Other 20,990 17,526 - (3,052)<F12> 36,579
1,115 <F15>
Utility Plant Held for Future Use
Electric 527 - - - 527
Other 218 - - - 218
----------- ---------- ---------- ----------- -----------
TOTAL $ 7,038,915 $ 250,482 $ 83,438 $ (2,418) $ 7,203,541
=========== ========== ========== =========== ===========
<F11> Amortization of capital leases charged to expense and construction overheads.
<F12> Transfer between Utility Plant in Service and Construction Work in Progress.
<F13> Transfer between Utility Plant in Service and Accumulated Provision for Depreciation.
<F14> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet Accounts.
<F15> Transfer between Construction Work in Progress and Miscellaneous Balance Sheet Accounts.
S-12
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 5,821,900 $ 138,104 $ 23,451 $ (367)<F16> $ 5,936,186
Construction Work in Progress
Electric 110,081 11,096 - - 121,177
Utility Plant Held for Future Use
Electric 883 - - (725)<F17> 158
----------- ---------- ---------- ---------- -----------
TOTAL $ 5,932,864 $ 149,200 $ 23,451 $ (1,092) $ 6,057,521
=========== ========== ========== ========== ===========
<F16> Amortization of capital leases charged to expense and construction overheads.
<F17> Transfer of land associated with two cancelled qualifying cogeneration facilities
to deferred debits.
S-13
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1992
(THOUSANDS OF DOLLARS)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct) at close
Classification of period at Cost Retirements describe of period
- ---------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 5,660,946 $ 249,042 $ 87,127 $ (333)<F18> $ 5,821,900
(628)<F19>
Construction Work in Progress
Electric 131,600 (22,147) - 628 <F19> 110,081
Utility Plant Held for Future Use
Electric 159 724 - - 883
----------- ---------- ---------- ---------- -------------
TOTAL $ 5,792,705 $ 227,619 $ 87,127 $ (333) $ 5,932,864
=========== ========== ========== ========== =============
<F18> Amortization of capital leases charged to expense and construction overheads.
<F19> Transfer between Utility Plant in Service and Construction Work in Progress.
S-14
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1991
(THOUSANDS OF DOLLARS)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 5,534,947 $ 191,364 $ 65,147 $ (287)<F20> $ 5,660,946
19 <F21>
160 <F22>
(110)<F23>
Construction Work in Progress
Electric 132,006 (387) - (19)<F21> 131,600
Utility Plant Held for Future Use
Electric 159 - - - 159
----------- ---------- ---------- ----------- -----------
TOTAL $ 5,667,112 $ 190,977 $ 65,147 $ (237) $ 5,792,705
=========== ========== ========== =========== ===========
<F20> Amortization of capital leases charged to expense and construction overheads.
<F21> Transfer between Utility Plant in Service and Construction Work in Progress.
<F22> Transfer between Utility Plant in Service and Accumulated Provision for Depreciation.
<F23> Transfer between Utility Plant in Service and Miscellaneous Balance Sheet accounts.
S-15
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- -------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,883,035 $ 120,494 $ 27,770 $ (398)<F24> $ 1,975,426
65 <F25>
Construction Work in Progress
Electric 4,363 4,210 - - 8,573
Utility Plant Held for Future Use
Electric 4,624 - - - 4,624
--------- --------- --------- --------- -----------
TOTAL $1,892,022 $ 124,704 $ 27,770 $ (333) $ 1,988,623
========= ========= ========= ========= ===========
<F24> Amortization of capital leases charged to expense and construction overheads.
<F25> Correction of Prior Retirements.
S-16
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period<F26> at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 1,784,431 $ 56,506 $ 6,649 $ (701,336)<F27> $ 1,883,035
(188)<F30>
760,425 <F28>
(10,154)<F29>
Construction Work in Progress
Electric 9,522 (3,597) - (1,562)<F27> 4,363
Utility Plant Held for Future Use
Electric 4,686 (62) - - 4,624
----------- ---------- ---------- ---------- ------------
TOTAL $ 1,798,639 $ 52,847 $ 6,649 $ 47,185 $ 1,892,022
=========== ========== ========== ========== ============
<F26> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992.
<F27> Transferred to North Atlantic Energy Corporation.
<F28> Seabrook Power Contract.
<F29> Amortization of Seabrook Power Contract charged to expense.
<F30> Transferred to North Atlantic Energy Service Corporation.
S-17
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ------------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 1,764,828 $ 23,430 $ 3,827 $ - $ 1,784,431
Construction Work in Progress
Electric 7,697 1,825 - - 9,522
Utility Plant Held for Future Use
Electric 4,686 - - - 4,686
----------- ---------- ---------- ---------- -----------
TOTAL $ 1,777,211 $ 25,255 $ 3,827 $ - $ 1,798,639
=========== ========== ========== ========== ===========
S-18
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL)
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other change Balance
beginning Additions add (deduct) at close
Classification of period<F28> at Cost Retirements describe of Period
- -----------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 1,745,493 $ 31,251 $ 11,916 $ - $ 1,764,828
Construction Work in Progress
Electric 16,514 (8,817) - - 7,697
Utility Plant Held for Future Use
Electric 4,253 433 - - 4,686
----------- ---------- ---------- ---------- -----------
TOTAL $ 1,766,260 $ 22,867 $ 11,916 $ - $ 1,777,211
=========== ========== ========== ========== ===========
<F28> Public Service Company of New Hampshire was reorganized on May 16, 1991.
S-19
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $2,489,492 $ 9,931 $ 1,942 $ - $ 2,497,481
Construction Work in Progress
Electric 6,764 11,116 - - 17,880
Utility Plant Held for Future Use
Electric 4,254 - - (1)<F29> 4,253
--------- --------- --------- ------- -----------
TOTAL $2,500,510 $ 21,047 $ 1,942 $ (1) $ 2,519,614
========== ========= ========= ======= ===========
<F29> Reserve associated with plant held for future use.
S-20
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ----------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,157,792 $ 29,574 $ 4,314 $ (10)<F30> $ 1,183,042
Construction Work in Progress
18,522 5,268 - - 23,790
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- ---------- -----------
TOTAL $1,176,682 $ 34,842 $ 4,314 $ (10) $ 1,207,200
========== ========= ========= ========== ===========
<F30> Amortization of capital leases charged to expense and construction overheads.
S-21
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,128,710 $ 55,282 $ 26,023 $ (10)<F31> $ 1,157,792
(167)<F32>
Construction Work in Progress
Electric 27,094 (8,717) - 145<F32> 18,522
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- --------- -----------
TOTAL $1,156,172 $ 46,565 $ 26,023 $ (32) $ 1,176,682
========== ========= ========= ========= ===========
<F31> Amortization of capital leases charged to expense and construction overheads.
<F32> Transfer between Utility Plant in Service and Construction Work in Progress.
S-22
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ---------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $1,110,711 $ 31,777 $ 13,802 $ (9)<F33> $ 1,128,710
33 <F34>
Construction Work in Progress
Electric 26,091 1,003 - - 27,094
Utility Plant Held for Future Use
Electric 368 - - - 368
---------- --------- --------- ------ -----------
TOTAL $1,137,170 $ 32,780 $ 13,802 $ 24 $ 1,156,172
========== ========= ========= ====== ===========
<F33> Amortization of capital leases charged to expense and construction overheads.
<F34> Transfer between Utility Plant in Service and Amortiable Property Investment.
S-23
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUE
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- --------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ 756,806 $ 3,964 $ 2,600 $ - $ 758,170
Construction Work in Progress
Electric 4,775 2,843 - - 7,618
--------- --------- --------- --------- -----------
TOTAL $ 761,581 $ 6,807 $ 2,600 $ - $ 765,788
========= ========= ========= ========= ===========
S-24
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
UTILITY PLANT (INCLUDING INTANGIBLES AND EXCLUDING NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of Period
- ----------------------------------------------------------------------------------------------
Utility Plant in Service
Electric $ - $ 3,138 $ 168 $ 701,336 <F36> $ 756,806
52,500 <F37>
Construction Work in Progress
Electric - 3,213 - 1,562 <F35> 4,775
--------- --------- --------- --------- -----------
TOTAL $ - $ 6,351 $ 168 $ 755,398 $ 761,581
========= ========= ========= ========= ===========
<F35> North Atlantic Energy Corporation began operations on June 5, 1992.
<F36> Acquired from Public Service Company of New Hampshire.
<F37> Charged to other balance sheet accounts.
S-25
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- --------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at cost Retirements describe of period
- --------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 2,041 $ 67,245 $ - $ (36,818)<F50>$ 32,468
Nuclear fuel assemblies
in reactor 26,210 - - 669 <F50> 26,879
Spent nuclear fuel 698,721 - - 93,975 <F50> 792,696
Accumulated provision for
amortization of nuclear
fuel assemblies (709,450) - - (92,949)<F50> (806,066)
(7,550)<F51>
3,883<F250>
Leased nuclear fuel 202,730 13,103 - 35,123 <F50> 172,074
(78,882)<F51>
------------ --------- ----------- --------- -----------
TOTAL $ 220,252 $ 80,348 $ - $ (82,549) $ 218,051
============ ========= =========== ========= ===========
<FN>
<F50> Transfers between nuclear fuel accounts.
<F51> Amortization of nuclear fuel assemblies charged to expense.
<F250>Transfer to deferred credits.
S-26
NORTHEAST UTILITIES AND SUBSIDIARIES
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at cost Retirements describe of period
- ---------------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
and assemblies -
stock account $ 7,705 $ 14,086 $ - 13,248 <F44> $ 2,041
(33,059)<F45>
61 <F251>
Nuclear fuel assemblies
in reactor 11,065 - - 4,431 <F44> 26,210
10,714 <F45>
Spent nuclear fuel 689,025 - - 4,935 <F44> 698,721
4,761 <F45>
Accumulated provision for
amortization of nuclear
fuel assemblies (693,797) - - (6,941) <F44> (709,450)
(3,883) <F252>
(4,829) <F46>
Leased nuclear fuel 222,172 20,589 - 17,584 <F45> 202,730
(57,615) <F46>
------------ --------- ----------- --------- -----------
TOTAL $ 236,170 $ 34,675 - $(50,593) $ 220,252
============ ========= =========== ========= ===========
<FN>
<F44> Public Service Company of New Hampshire acquisition.
<F45> Transfers between nuclear fuel accounts.
<F46> Amortization of nuclear fuel assemblies charged to expense.
<F251>Transfer between miscellaneous balance sheet accounts.
<F252>Department of energy credits.
S-27
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment,
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 3,876 $ 19,510 $ - $ (15,681)<F47>$ 7,705
Nuclear fuel assemblies
in reactor 5,033 - - 6,032 <F47> 11,065
Spent nuclear fuel 588,337 - - 100,688 <F47> 689,025
Accumulated provision for
amortization of nuclear
fuel assemblies (584,461) - - (105,452)<F47> (693,797)
(4,937)<F48>
1,053 <F49>
Leased nuclear fuel 247,036 3,743 - 14,413 <F47> 222,172
(43,020)<F48>
------------ --------- ----------- --------- -----------
TOTAL $ 259,821 $ 23,253 $ - $ (46,904) $ 236,170
============ ========= =========== ========= ===========
<FN>
<F47> Transfers between nuclear fuel accounts.
<F48> Amortization of nuclear fuel assemblies charged to expense.
<F49> Insurance settlement.
S-28
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 993 $ 42,107 $ - $ (28,820)<F52>$ 14,280
Nuclear fuel assemblies
in reactor 9,470 - - 910 <F52> 10,380
Spent nuclear fuel 563,628 - - 74,803 <F52> 638,431
Accumulated provision for
amortization of nuclear
fuel assemblies (570,598) - - (75,342)<F52> (645,701)
3,029 <F253>
(2,790)<F53>
Leased nuclear fuel 164,323 11,691 - 28,449 <F52> 139,488
(64,975)<F53>
------------ --------- ----------- --------- -----------
TOTAL $ 167,816 53,798 - (64,736) 156,878
============ ========= =========== ========= ===========
<FN>
<F52> Transferred between nuclear fuel accounts.
<F53> Amortization of nuclear fuel assemblies charged to expense.
<F253>Transfer to deferred credits.
S-29
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F52> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 7,089 $ 11,131 $ - $ (17,227)<F54>$ 993
Nuclear fuel assemblies
in reactor 11,273 - - (1,803)<F54> 9,470
Spent nuclear fuel 558,868 - - 4,760 <F54> 563,628
Accumulated provision for
amortization of nuclear
fuel assemblies (563,752) - - (3,029)<F55> (570,598)
(3,817)<F254>
Leased nuclear fuel 180,086 16,678 - 14,270 <F54> 164,323
(46,711)<F254>
------------ --------- ----------- --------- -----------
TOTAL $ 193,564 $ 27,809 $ - $ (53,557) $ 167,816
============ ========= =========== ========= ===========
<FN>
<F54> Transfers between nuclear fuel accounts.
<F55> Amortization of nuclear fuel assemblies charged to expense.
<F254>Department of Energy Credits.
S-30
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F54> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication
and nuclear fuel
materials and
assemblies -
stock account $ 5,183 $ 15,110 $ - $ (13,204)<F56>$ 7,089
Nuclear fuel assemblies
in reactor 6,481 - - 4,792 <F56> 11,273
Spent nuclear fuel 476,656 - - 82,212 <F56> 558,868
Accumulated provision for
amortizatiion of nuclear
fuel assemblies (474,171) - - (85,478)<F56> (563,752)
(4,956)<F57>
853 <F58>
Leased nuclear fuel 200,238 3,034 - 11,678 <F56> 180,086
(34,864)<F57>
------------ --------- ----------- --------- -----------
TOTAL $ 214,387 $ 18,144 $ - $ (38,967) $ 193,564
============ ========= =========== ========= ===========
<FN>
<F56> Transfers between nuclear fuel accounts.
<F57> Amortization of nuclear fuel assemblies charged to expense.
<F58> Insurance settlement.
S-31
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 668 $ 614 $ - $ (1,261)<F82>$ 21
Nuclear fuel assemblies
in reactor 4,162 - - (512)<F82> 3,650
Spent nuclear fuel 4,936 - - 1,773 <F82> 6,709
Accumulated provision for
amortization of nuclear
fuel assemblies (7,429) - - 149 <F82> (8,273)
(993)<F83>
------------ --------- ----------- --------- -----------
TOTAL $ 2,337 $ 614 $ - $ (844) $ 2,107
============ ========= =========== ========= ===========
<FN>
<F82> Transfers between nuclear fuel accounts.
<F83> Amortization of nuclear fuel assemblies charged to expense.
S-32
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 13,248 $ 552 $ - $ (13,132)<F65>$ 668
Nuclear fuel assemblies
in reactor 4,431 - - (269)<F66> 4,162
Spent nuclear fuel 4,936 - - - 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,941) - - 82 <F66> (7,429)
(570)<F67>
------------ --------- ----------- --------- -----------
TOTAL $ 15,674 $ 552 $ - $ (13,889) $ 2,337
============ ========= =========== ========= ===========
<FN>
<F65> Public Service Company of New Hampshire was acquired by Northeast Utilities
on June 5, 1992.
<F66> Transfers to North Atlantic Energy Corporation.
<F67> Amortization of nuclear fuel assemblies charged to expense.
S-33
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 2,859 $ 9,990 $ - $ 399 <F59> $ 13,248
Nuclear fuel assemblies
in reactor 4,431 - - - 4,431
Spent nuclear fuel 4,936 - - - 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,543) - - (398)<F59> (6,941)
------------ --------- ----------- --------- -----------
TOTAL $ 5,683 $ 9,990 $ - $ 1 $ 15,674
============ ========= =========== ========= ===========
<FN>
<F59> Miscellaneous transfers.
S-34
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F60> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 207 $ 3,125 $ - $ (473)<F61>$ 2,859
Nuclear fuel assemblies
in reactor 5,586 - - 473 <F61> 4,431
(1,628)<F61>
Spent nuclear fuel 3,308 - - 1,628 <F61> 4,936
Accumulated provision for
amortization of nuclear
fuel assemblies (6,299) - - (244)<F62> (6,543)
------------ --------- ----------- --------- -----------
TOTAL $ 2,802 $ 3,125 $ - $ (244) $ 5,683
============ ========= =========== ========= ===========
<FN>
<F60> Public Service Company of New Hampshire was reorganized on May 16, 1991.
<F61> Transfers between nuclear fuel accounts.
<F62> Amortization of nuclear fuel assemblies charged to expense.
S-35
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 40,943 $ 4,264 $ - $ (1,741)<F63> 43,466
Nuclear fuel assemblies
in reactor 41,129 - - 1,741 <F63> 42,870
Spent nuclear fuel 3,308 - - - 3,308
Accumulated provision for
amortization of nuclear
fuel assemblies (15,564) - - (7,649)<F64> (23,213)
------------ --------- ----------- --------- -----------
TOTAL $ 69,816 $ 4,264 $ - $ (7,649) $ 66,431
============ ========= =========== ========= ===========
<FN>
<F63> Transfers between nuclear fuel accounts.
<F64> Amortization of nuclear fuel assemblies charged to expense.
S-36
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 197 $ 9,598 $ - $ (6,737)<F73>$ 3,058
Nuclear fuel assemblies
in reactor (208) - - 272 <F73> 64
Spent nuclear fuel 130,157 - - 17,398 <F73> 147,555
Accumulated provision for
amortization of nuclear
fuel assemblies (130,848) - - 854 <F254> (147,535)
(17,607)<F73>
66 <F74>
Leased nuclear fuel 38,406 2,697 - 6,674 <F73> 32,585
(15,192)<F254>
------------ --------- ----------- --------- -----------
TOTAL $ 37,704 $ 12,295 $ - $ (14,272) $ 35,727
============ ========= =========== ========= ===========
<FN>
<F73> Transfers between nuclear fuel accounts.
<F74> Amortization of nuclear fuel assemblies charged to expense.
<F254>Transfer to deferred credits.
S-37
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ----------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- ----------------------------------------------------------------------------------
Nuclear fuel in process of
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 1,200 $ 2,310 $ - $ (3,313)<F68>$ 197
Nuclear fuel assemblies
in reactor (208) - - - (208)
Spent nuclear fuel 130,157 - - - 130,157
Accumulated provision for
amortization of nuclear
fuel assemblies (130,045) - - (854)<F69> (130,848)
51 <F255>
Leased nuclear fuel 42,086 3,911 - (10,904)<F255> 38,406
3,313 <F68>
--------- --------- ----------- --------- -----------
TOTAL $ 43,190 $ 6,221 $ - $ (11,707)<F69>$ 37,704
========= ========= =========== ========= ===========
<FN>
<F68> Transfers between nuclear fuel accounts.
<F69> Amortization of nuclear fuel assemblies charged to expense.
<F255>Department of Energy Credits.
S-38
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- --------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes- Balance
beginning Additions add (deduct)- at close
Classification of period at Cost Retirements describe of period
- --------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 373 $ 3,304 $ - $ (2,477)<F70>$ 1,200
Nuclear fuel assemblies
in reactor (1,448) - - 1,240 <F70> (208)
Spent nuclear fuel 111,681 - - 18,476 <F70> 130,157
Accumulated provision for
amortization of nuclear
fuel assemblies (110,289) - - (19,974)<F70> (130,045)
18 <F71>
200 <F72>
Leased nuclear fuel 46,798 709 - 2,735 <F70> 42,086
(8,156)<F71>
------------ --------- ----------- --------- -----------
TOTAL 47,115 4,013 - (7,938)<F71>$ 43,190
============ ========= =========== ========= ===========
<FN>
<F70> Transfers between nuclear fuel accounts.
<F71> Amortization of nuclear fuel assemblies charged to expense.
<F72> Insurance settlements.
S-39
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
NUCLEAR FUEL
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F79> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ 1,126 $ 13,983 $ - $ - $ 15,109
Nuclear fuel assemblies
in reactor 12,786 - - - 12,786
Spent nuclear fuel - - - - 0
Accumulated provision for
amortization of nuclear
fuel assemblies (573) - - (3,983)<F81> (4,556)
------------ --------- ----------- --------- -----------
TOTAL $ 13,339 $ 13,983 $ - $ (3,983) $ 23,339
============ ========= =========== ========= ===========
<FN>
<F79> North Atlantic Energy Corporation began operations on June 5, 1992.
<F81> Amortization of nuclear fuel assemblies charged to expense.
S-40
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE V
NUCLEAR FUEL
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Balance at Other changes Balance
beginning Additions add (deduct)- at close
Classification of period<F75> at Cost Retirements describe of period
- -------------------------------------------------------------------------------------
Nuclear fuel in process
of refinement,
conversion, enrichment
and fabrication,
and nuclear fuel
materials and
assemblies -
stock account $ - $ 511 $ - $ 13,132 <F76>$ 1,126
(12,517)<F77>
Nuclear fuel assemblies
in reactor - - - 269 <F76> 12,786
12,517 <F77>
Spent nuclear fuel - - - - -
Accumulated provision for
amortization of nuclear
fuel assemblies - - - (82)<F76> (573)
(491)<F78>
------------ --------- ----------- --------- -----------
TOTAL $ - $ 511 $ - $ 12,828 $ 13,339
============ ========= =========== ========= ===========
<FN>
<F75> North Atlantic Energy Corporation began operations on June 5, 1992.
<F76> Acquired from Public Service Company of New Hampshire.
<F77> Transfers between nuclear fuel accounts.
<F78> Amortization of nuclear fuel assemblies charged to expense.
S-41
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 2,675,731 $ 325,935 $ 58,049 $ 613<F87>$ 2,944,230
Other 73,303 5,501 1,047 - 77,757
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,749,034 $ 331,436 $ 59,096 $ 613 $ 3,021,987
============ ============ ============ ============ ============
<FN>
<F87> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
S-42
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 2,113,908 $ 289,798 $ 148,122 $ 419,436<F84>$ 2,675,731
711<F85>
Other 68,236 5,205 138 - 73,303
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,182,144 $ 295,003 $ 148,260 $ 420,147 $ 2,749,034
============ ============ ============ ============ ============
<FN>
<F84> Accumulated provision for depreciation - Public Service Company of New Hampshire acquisition.
<F85> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
S-43
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 1,976,327 $ 231,862 $ 103,598 $ 9,317<F86>$ 2,113,908
Other 57,241 11,595 600 - 68,236
------------ ------------ ------------ ------------ ------------
TOTAL $ 2,033,568 $ 243,457 $ 104,198 $ 9,317 $ 2,182,144
============ ============ ============ ============ ============
<FN>
<F86> Depreciation charged to Clearing, Fuel Stock, Stores, and Other Accounts.
S-44
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993
Electric $ 1,827,024 $ 222,245 $ 38,392 $ 85<F88>$ 2,010,962
============ ============ ============ ============ ============
Year Ended December 31, 1992
Electric $ 1,724,673 $ 216,755 $ 114,511 $ 107<F88>$ 1,827,024
============ ============ ============ ============ ============
Year Ended December 31, 1991
Electric $ 1,608,784 $ 201,377 $ 85,549 $ 61<F88>$ 1,724,673
============ ============ ============ ============ ============
<FN>
<F88> Depreciation charged to Transportation Clearing, Fuel Stock, Stores, and Other Accounts.
S-45
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Electric $ 410,026 $ 38,664 $ 8,007 $ 393<F96>$ 441,076
============ ============ ============ =========== ============
<FN>
<F96> Depreciation charged to Clearing and Other Accounts.
S-46
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE PERIODS JUNE 5, 1992 THROUGH DECEMBER 31, 1992 AND JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
For the Period June 5, 1992
through December 31, 1992
Electric $ 419,436<F89>$ 21,526 $ 6,837 $ (23,316)<F90> $ 410,026
257 <F91>
(1,040)<F92>
-----------
$ (24,099)
=========== =========== =========== =========== =========
For the Period January 1, 1992
through June 4, 1992 $ 398,334 $ 25,183 $ 2,461 $ 243 <F91> $ 419,436
(1,863)<F92>
-----------
$ (1,620)
=========== =========== =========== =========== =========
<FN>
<F89> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992
<F90> Transfer of Seabrook to North Atlantic Energy Corporation.
<F91> Depreciation charged to Clearing and Other Accounts.
<F92> Net salvage.
S-47
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE PERIODS MAY 16, 1991 THROUGH DECEMBER 31, 1991 AND JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
For the Period May 16, 1991
through December 31, 1991
Electric $ 376,103<F93>$ 36,590 $ 12,377 $ 482 (b) $ 398,334
(2,464)(c)
-----------
$ (1,982)
=========== =========== =========== =========== ==========
For the Period January 1, 1991
through May 15, 1991
Electric $ 382,565 $ 28,269 $ 1,945 $ 1,705 (b) $ 409,831
(763)(c)
-----------
$ 942
=========== =========== =========== =========== ===========
<FN>
<F93> Public Service Company of New Hampshire was reorganized on May 16, 1991.
<F94> Depreciation charged Clearing and Other Accounts.
<F95> Net salvage.
S-48
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Year Ended December 31, 1993
Electric $ 364,702 $ 38,271 $ 7,801 $ 18<F97>$ 395,190
============ ============ ============ =========== ============
Year Ended December 31, 1992
Electric $ 352,855 $ 36,707 $ 24,886 $ 26<F97>$ 364,702
============ ============ ============ =========== ============
Year Ended December 31, 1991
Electric $ 332,472 $ 37,800 $ 17,429 $ 12<F97>$ 352,855
============ ============ ============ =========== ============
<FN>
<F97> Depreciation charged to Transportation Clearing, Fuel Stock, and Other Accounts.
S-49
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE VI
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
YEARS ENDED DECEMBER 31, 1993 AND 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E Column F
Additions
Balance at charged to Other changes- Balance
beginning of costs and add (deduct)- at close
Description period<F98> expenses Retirements describe of period
- ------------------------------------------------------------------------------------------------------
Year Ended Dcember 31, 1993
Electric $ 36,327 $ 22,862 $ 2,540 $ - $ 56,649
=========== =========== =========== ============== ===========
Year Ended Dcember 31, 1992
Electric $ - $ 12,981 $ (30) $ 23,316<F99>$ 36,327
=========== =========== =========== ============== ===========
<FN>
<F98> North Atlantic Energy Corporation began operations on June 5, 1992.
<F99> Acquired from Public Service Company of New Hampshire.
S-50
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ----------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 13,255 $ 22,342 $ - $ 20,968<F100>$ 14,629
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F101> $ 14,059 $ 9,231 $ - $ 7,572<F102>$ 15,718
========= ========= ========= ========= ========
Medical insurance <F103> $ 9,430 $ 42,442 $ - $ 43,215<F104>$ 8,657
========= ========= ========= ========= ========
<FN>
<F100> Amounts written off, net of recoveries.
<F101> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F102> Principally payments for various injuries and damages and expenses in connection therewith.
<F103> Provided to cover claims for employee medical insurance.
<F104> Principally payments for various employee medical expenses and expenses in connection
therewith.
S-51
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
-------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- -------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 11,607 $ 20,005 $ 2,826<F105>$ 21,183<F106>$ 13,255
========= ========= ======== ======== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F107> $ 9,465 $ 8,275 $ 3,138<F105>$ 6,819<F108>$ 14,059
========= ========= ======== ========= ========
Medical insurance <F109> $ 6,869 $ 39,693 $ 1,150<F105>$ 38,282<F110>$ 9,430
========= ========= ======== ======== ========
<FN>
<F105> Acquired as part of Northeast Utilities acquisition of Public Service Company of New Hampshire
on June 5, 1992.
<F106> Amounts charged off as uncollectible after deducting customers' deposits and recoveries
of accounts previously charged off.
<F107> Provided to cover claims for injuries to employees, workmen's compensation,
bodily injury to others, and property damage.
<F108> Principally payments for various injuries and damages and expenses in connection therewith.
<F109> Provided to cover claims for employee medical insurance.
<F110> Principally payments for various employee medical expenses and expenses in connection
therewith.
S-52
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ----------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 10,588 $ 16,593 $ - $ 15,574<F111>$ 11,607
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F112> $ 6,238 $ 10,211 $ - $ 6,984<F113> 9,465
Medical insurance <F114> 6,157 41,327 - 40,615<F115> 6,869
Other <F116> 7,028 2,393 488<F117> 11,686<F118> (1,777)
--------- --------- --------- --------- --------
TOTAL $ 19,423 $ 53,931 $ 488 $ 59,285 $ 14,557
========= ========= ========= ========= =========
<FN>
<F111> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F112> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F113> Principally payments for various injuries and damages and expenses in connection therewith.
<F114> Provided to cover claims for employee medical insurance.
<F115> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F116> Consists of a long-term disability insurance reserve, a supplemental executive retirement plan
reserve, an early retirement incentive reserve, a storm damage reserve, and a reserve for
nuclear materials and supplies remaining at decommissioning.
<F117> Employee contributions related to the long-term disability plan.
<F118> Payments under a long-term disability plan, supplemental executive retirement plan, an early
retirement incentive plan and a storm damage reserve.
S-53
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 8,358 $ 16,366 $ - $ 13,908<F119>$ 10,816
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F120> $ 8,359 $ 7,115 $ - $ 5,821<F121>$ 9,653
========= ========= ========= ========= ========
Medical insurance <F122> $ 3,496 $ 19,846 $ - $ 20,975<F123>$ 2,367
========= ========= ========= ========= ========
<FN>
<F119> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F120> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F121> Principally payments for various injuries and damages and expenses in connection therewith.
<F122> Provided to cover claims for employee medical insurance.
<F123> Principally payments for various employee medical expenses and expenses in connection
therewith.
S-54
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 9,560 $ 14,837 $ - $ 16,039<F124>$ 8,358
========= ========= ========= ========= ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F125> $ 7,369 $ 6,600 $ - $ 5,610<F126>$ 8,359
========= ========= ========= ========= ========
Medical insurance <F127> $ 3,429 $ 19,770 $ - $ 19,703<F128>$ 3,496
========= ========= ========= ========= ========
<FN>
<F124> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F125> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F126> Principally payments for various injuries and damages and expenses in connection therewith.
<F127> Provided to cover claims for employee medical insurance.
<F128> Principally payments for various employee medical expenses and expenses in connection
therewith.
S-55
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ---------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 8,610 $ 12,804 $ - $ 11,854<F129>$ 9,560
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F130> $ 4,781 $ 8,460 $ - $ 5,872<F131>$ 7,369
Medical insurance <F132> 3,167 20,990 - 20,728<F133>$ 3,429
Other <F134> 3,279 1,186 97<F135> 11,373<F136>$ (6,811)
--------- --------- --------- --------- ---------
TOTAL $ 11,227 $ 30,636 $ 97 $ 37,973 $ 3,987
========= ========= ========= ========= ==========
<FN>
<F129> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F130> Provided to cover claims for injuries to employees, workmen's compensation,
bodily injury to others and property damage.
<F131> Principally payments for various injuries and damages and expenses in connection therewith.
<F132> Provided to cover claims for employee medical insurance.
<F133> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F134> Consists of a long-term disability insurance reserve, a supplemental executive retirement
plan, an early retirement incentive reserve, a storm damage reserve, and a reserve for nuclear
materials and supplies remaining at decommissioning.
<F135> Employeee contributions related to the long-term disability plan.
<F136> Payments under a long-term disability plan, supplemental executive retirement plan, an early
retirement incentive plan, and a storm damage reserve.
S-56
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,780 $ 1,771 $ - $ 2,735<F137>$ 1,816
========= ========= ========= ========= =======
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 2,770 $ 192 $ - 917<F138>$ 2,045
========= ========= ========= ========= ========
Medical insurance $ 1,650 $ 265 $ - $ - $ 1,915
========= ========= ========= ========= ========
<FN>
<F137> Amounts written off, net of recoveries.
<F138> Principally payments for various injuries and damages and expenses in connection therewith.
S-57
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD June 5, 1992 THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period<F147> expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,826 $ 1,617 $ - $ 1,663<F148> $ 2,780
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 3,138 $ (277) $ - $ 91<F149> $ 2,770
========= ========= ========= ========= =========
Medical Insurance $ 1,150 $ 500 $ - $ - $ 1,650
========= ========= ========= ========= =========
<FN>
<F147> Public Service Company of New Hampshire was acquired by Northeast Utilities
on June 5, 1992.
<F148> Amounts written off, net of recoveries.
<F149> Nonoperating reserve transferred to operating.
S-58
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
-----------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,834 $ 1,581 $ - $ 1,589<F139>$ 2,826
========= ========= ========= ========== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 1,615 $ 1,618 $ - $ 95<F140>$ 3,138
========= ========= ========= ========= ========
Medical insurance $ 1,050 $ 100 $ - $ - $ 1,150
========= ========= ========= ========= ========
<FN>
<F139> Amounts written off, net of recoveries.
<F140> Nonoperating reserve transferred to operating.
S-59
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD MAY 16, 1991 THROUGH DECEMBER 31, 1991
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period<F141> expenses describe describe of period
- --------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,827 $ 2,267 $ - $ 2,260<F142> $ 2,834
========= ========= ========= ========= =======
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages $ 1,777 $ 325 $ - $ 487<F143> $ 1,615
========= ========= ========= ========= ========
<FN>
<F141> Public Service Company of New Hampshire was reorganized on May 15, 1991.
<F142> Accounts written off, net of recoveries.
<F143> Nonoperating reserve transferred to operating.
S-60
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE PERIOD JANUARY 1, 1991 THROUGH MAY 15, 1991
(Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,361 $ 1,340 $ - $ 874<F144> $ 2,827
========= ========= ========= ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Estimated cancellation costs
for Seabrook 2 $ 12,465 $ - $ (12,465)<F145> $ - -
========= ========= ========= ========= =========
Injuries and damages $ 1,812 $ 257 $ - $ 292<F146> $ 1,777
========= ========= ========= ========= =========
<FN>
<F144> Amounts written off, net of recoveries.
<F145> Write-off of reserve to Account 426.6.
<F146> Nonoperating reserve transferred to operating.
S-61
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR-ENDED DECEMBER 31, 1993
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
----------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 2,117 $ 2,812 $ - $ 2,932<F150> $ 1,997
========== ========== ========== ========== =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F151> $ 1,612 $ 1,750 $ - $ 602<F152> $ 2,760
========== ========== ========== ========== =========
Medical Insurance <F153> $ 741 $ 4,017 $ - $ 4,291<F154> $ 467
========== ========== ========== ========== =========
<FN>
<F150> Amounts written off, net of recoveries.
<F151> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F152> Principally payments for various injuries and damages and expenses in connection therewith.
<F153> Provided to cover claims for employee medical insurance.
<F154> Principally payments for various employee medical expenses and expenses in connection
therewith.
S-62
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
----------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 1,977 $ 3,303 $ - $ 3,163<F163> $ 2,117
========= ========== ========== ========== ========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F164> $ 1,496 $ 1,200 $ - $ 1,084<F165> $ 1,612
========= ========== ========== ========== ========
Medical insurance <F166> $ 667 $ 3,916 $ - $ 3,842<F167> $ 741
========= ========== ========== ========== ========
<FN>
<F163> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F164> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F165> Principally payments for various injuries and damages and expenses in connection therewith.
<F166> Provided to cover claims for employee medical insurance.
<F167> Principally payments for various employee medical expenses and expenses in connection
therewith.
S-63
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
Additions
--------------------
(1) (2)
Charged to
Balance at Charged to other Balance
beginning costs and accounts- Deductions- at end
Description of period expenses describe describe of period
- ------------------------------------------------------------------------------------------------------
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Reserves for uncollectible accounts $ 1,909 $ 3,789 $ - $ 3,721<F155> $ 1,977
========= ========= ======== ========= =========
RESERVES NOT APPLIED AGAINST ASSETS:
Injuries and damages <F156> $ 986 $ 1,200 $ - $ 690<F157> $ 1,496
Medical insurance <F158> 629 4,178 - 4,140<F159> 667
Other <F160> 738 397 19<F161> 150<F162> 1,004
---------- ---------- -------- --------- ---------
TOTAL $ 2,353 $ 5,775 $ 19 $ 4,980 $ 3,167
========= ========= ======== ========= =========
<FN>
<F155> Amounts charged off as uncollectible after deducting customers' deposits and recoveries of
accounts previously charged off.
<F156> Provided to cover claims for injuries to employees, workmen's compensation, bodily injury to
others, and property damage.
<F157> Principally payments for various injuries and damages and expenses in connection therewith.
<F158> Provided to cover claims for employee medical insurance.
<F159> Principally payments for various employee medical expenses and expenses in connection
therewith.
<F160> Consists of a long-term disability insurance reserve, a supplemental executive retirement plan
reserve, an early retirement incentive reserve, and a reserve for nuclear materials and
supplies remaining at decommissioning.
<F161> Employee contributions related to the long-term disability plan.
<F162> Payments under a long-term disability plan, supplemental executive retirement plan, and early
retirement incentives.
S-64
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B Column C <F161> Column D Column E <F162> Column<F163>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- ------------------------------------------------------------------------------------------------------
December 31, 1993
- -------------------------
Notes Payable to Banks $ 173,500 3.3 % $ 254,000 $ 169,081 4.0 %
Commercial Paper $ - - % $ 203,500 $ 91,031 3.4 %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 220,000 4.0 % $ 245,000 $ 84,285 5.0 %
Commercial Paper $ 132,740 4.1 % $ 138,000 $ 36,507 3.7 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 62,500 5.2 % $ 218,500 $ 114,225 7.0 %
Commercial Paper $ - - % $ 115,000 $ 38,669 6.4 %
<F161> Excludes the effect of commitment fees.
<F162> Average daily balance during the period.
<F163> Based on the daily amounts outstanding including commitmentfees.
S-65
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------
Column A Column B Column C <F164> Column D Column E <F165> Column F <F166>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -----------------------------------------------------------------------------------------------
December 31, 1993
- -------------------------
Notes Payable to Banks $ 95,000 3.3 % $ 145,500 $ 86,101 3.8 %
Commercial Paper $ - - % $ 197,500 $ 83,660 3.4 %
NU System Money Pool $ 1,250 2.9 % $ 28,500 $ 6,801 3.0 %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 96,500 4.0 % $ 193,000 $ 43,314 4.8 %
Commercial Paper $ 109,240 4.1 % $ 118,000 $ 27,911 3.7 %
NU System Money Pool $ - - % $ 272,750 $ 80,473 3.9 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 53,500 5.2 % $ 174,000 $ 75,355 6.8 %
Commercial Paper $ - - % $ 114,000 $ 18,166 6.0 %
NU System Money Pool $ 137,000 4.1 % $ 142,500 $ 11,573 4.6 %
<F164> Excludes the effect of commitment fees.
<F165> Average daily balance during the period.
<F166> Based on the daily amounts outstanding including commitmentfees.
S-66
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE IX
SHORT-TERM BORROWINGS
FOR THE YEAR ENDED DECEMBER 31, 1993, THE PERIOD JUNE 5,1992 THROUGH DECEMBER 31, 1992,
THE PERIOD JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B Column C <F167> ColumnD Column E <F168> Column F<F169>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -----------------------------------------------------------------------------------------------------
December 31, 1993 <F170>
- -------------------------------
Notes Payable to Banks $ - - % $ 35,000 $ 4,205 12.3 %
NU System Money Pool $ 2,500 2.9 % $ 17,500 N/A <F171> N/A <F171>%
For the Period June 5, 1992
through December 31, 1992 <F170>
- ------------------------------
Notes Payable to Banks $ 35,000 5.0 % $ 108,000 $ 8,767 6.7 %
NU System Money Pool $ 8,500 2.7 % $ 25,000 N/A <F171> N/A <F171>
For the Period January 1, 1992
through June 4, 1992
- ------------------------------
Notes Payable to Banks $ 108,000 5.6 % $ 128,000 $ 99,013 5.6 %
<F167> Excludes the effect of commitment fees.
<F168> Average daily balance during the period.
<F169> Based on the daily amounts outstanding including commitmentfees.
<F170> Public Service Company of New Hampshire was acquired byNortheast Utilities on June 5, 1992.
<F171> Average money pool investments were greater than averagemoney pool borrowings during the
period.
S-67
WESTERN MASSACHUSETTS ELECTRICCOMPANY SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- -------------------------------------------------------------------------------------------------
Column A Column B Column C <F172> Column D Column E <F173> Column F <F174>
Category of Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end during the during the during the
of period period period period
- -------------------------------------------------------------------------------------------------
December 31, 1993
- -------------------------
Notes Payable to Banks $ 6,000 3.3 % $ 25,000 $ 6,705 4.5 %
Commercial Paper $ - - % $ 23,500 $ 5,727 3.5 %
NU System Money Pool $ - - % $ 28,000 $ N/A <F175> N/A <F175> %
December 31, 1992
- -------------------------
Notes Payable to Banks $ 18,000 3.8 % $ 30,000 $ 2,142 10.6 %
Commercial Paper $ 23,500 4.2 % $ 30,000 $ 8,596 3.7 %
NU System Money Pool $ - - % $ 42,500 $ 10,202 4.2 %
December 31, 1991
- -------------------------
Notes Payable to Banks $ 9,000 5.3 % $ 49,000 $ 19,504 7.1 %
Commercial Paper $ - - % $ 37,000 $ 13,466 6.5 %
NU System Money Pool $ 35,750 4.1 % $ 38,000 $ 4,933 5.1 %
<F172> Excludes the effect of commitment fees.
<F173> Average daily balance during the period.
<F174> Based on the daily amounts outstanding including commitmentfees of compensating balances.
<F175> Average money pool investments were greater than averagemoney pool borrowings
during the period.
S-68
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE IX
SHORT-TERM BORROWINGS
FOR THE YEAR ENDED DECEMBER 31, 1993 AND THE PERIOD JUNE 5, 1992
THROUGH DECEMBER 31, 1992
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------
Column A Column B Column C <F176> ColumnD Column E <F177> Column F <F178>
Category o Balance Weighted Maximum Average Weighted
aggregate at end of average amount amount average
short-term period interest outstanding outstanding interest rate
borrowings rate at end duringthe during the during the
of period period period period
- -----------------------------------------------------------------------------------------------------
December 31, 1993
- -----------------------------
NU System Money Pool $ - - % $ 34,500 $ 14,835 3.2 %
For the Period June 5, 1992
through December 31, 1992 <F176>
- -----------------------------
NU System Money Pool $ 18,500 2.7 % $ 35,500 $ 21,234 3.2 %
<F176> Atlantic Energy Corporation began operations on June 5, 1992.
<F177> Average daily balance during the period.
S-69
NORTHEAST UTILITIES AND SUBSIDIARIES SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expenses
- ----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
Taxes, other than payroll and
income taxes:
State gross receipts $ 94,199 $ 87,695 $ 87,240
Real and personal property 113,253 98,279 75,416
---------------- ---------------- ----------------
TOTAL $ 207,452 $ 185,974 $ 162,656
================ ================ ================
S-70
THE CONNECTICUT LIGHT AND POWER COMPANY SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- -----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- -----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
Taxes, other than payroll and
income taxes:
State gross receipts $ 94,047 $ 87,532 $ 87,095
Real and personal property 63,551 64,054 61,344
---------------- ---------------- -----------------
TOTAL $ 157,598 $ 151,586 $ 148,439
================ ================ =================
S-71
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993 AND THE PERIODS JUNE 5, 1992
THROUGH DECEMBER 31, 1992 AND JANUARY 1, 1992 THROUGH JUNE 4, 1992
(Thousands of Dollars)
- --------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expenses
- --------------------------------------------------------------------------------------------------
December 31, 1993
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 25,020
================
TOTAL
June 5, 1992 - December 31, 1992 <F178>
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 13,827
================
TOTAL
January 1, 1992 - June 4, 1992
- --------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 16,588
================
<F178> Public Service Company of New Hampshire was acquired by Northeast Utilities on June 5, 1992.
S-72
WESTERN MASSACHUSETTS ELECTRIC COMPANY SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- ----------------------------------------------------------------------------------------------------
1993 1992 1991
---------------- ---------------- ----------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 14,279 $ 12,947 $ 11,814
================ ================ ================
TOTAL
S-73
NORTH ATLANTIC ENERGY CORPORATION SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993 AND
FOR THE PERIOD JUNE 5, 1992 THROUGH DECEMBER 31, 1992<F179>
(Thousands of Dollars)
- --------------------------------------------------------------------------------------
Column A Column B
Item Charged to Expense
- --------------------------------------------------------------------------------------
December 31, 1993
- ------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 7,549
============
TOTAL
June 5, 1992 - December 31, 1992
- ----------------------------------------
Taxes, other than payroll and
income taxes:
Real and personal property $ 4,528
============
TOTAL
<F179>North Atlantic Energy Corporation began operations on June 5, 1992.
S-74
EXHIBIT INDEX
Each document described below is incorporated by reference to the files of
the Securities and Exchange Commission, unless the reference to the document is
marked as follows:
* - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File
No. 1-5324 into the 1993 Annual Reports on Form 10-K for CL&P,
PSNH, WMECO and NAEC.
# - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File
No. 1-5324 into the 1993 Annual Report on Form 10-K for CL&P.
@ - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File No.
1-5324 into the 1993 Annual Report on Form 10-K for PSNH.
** - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 NU Form 10-K, File No.
1-5324 into the 1993 Annual Report on Form 10-K for WMECO.
## - Filed with the 1993 Annual Report on Form 10-K for NU and herein
incorporated by reference from the 1993 Form 10-K, File No.
1-5324 into the 1993 Annual Report on Form 10-K for NAEC.
Exhibit
Number Description
3 Articles of Incorporation and By-Laws
3.1 Northeast Utilities
3.1.1 Declaration of Trust of NU, as amended through May 24, 1988.
(Exhibit 3.1.1, 1988 NU Form 10-K, File No. 1-5324)
3.2 The Connecticut Light and Power Company
# 3.2.1 Certificate of Incorporation of CL&P, restated to
March 22, 1994.
# 3.2.2 By-laws of CL&P, as amended to March 1, 1982.
3.3 Public Service Company of New Hampshire
@ 3.3.1 Articles of Incorporation, as amended to May 16, 1991.
@ 3.3.2 By-laws of PSNH, as amended to November 1, 1993.
3.4 Western Massachusetts Electric Company
3.4.1 Certificate of Organization of WMECO, as amended, to
August 31, 1954. (Exhibit 3.1, File No. 2-11114)
3.4.2 Amendments to Certificate of Organization of WMECO of
May 19, 1966 and of December 5, 1967. (Exhibit 3.2, File
No. 2-30534)
E-1
3.4.3 Articles of Amendment dated December 9, 1981. (Exhibit
3.1.2, 1981 WMECO Form 10-K, File No. 0-7624)
3.4.4 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated December 16, 1981. (Exhibit 3.1.3,
1981 WMECO Form 10-K, File No. 0-7624)
3.4.5 Articles of Amendment dated April 7, 1983. (Exhibit 3.3.5,
1983 NU Form 10-K, File No. 1-5324)
3.4.6 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated April 12, 1983. (Exhibit 3.3.6, 1983
NU Form 10-K, File No. 1-5324)
3.4.7 Articles of Amendment dated January 29, 1987. (Exhibit
3.3.7, 1986 NU Form 10-K, File No. 1-5324)
3.4.8 Articles of Amendment dated February 11, 1987. (Exhibit
3.3.8, 1986 NU Form 10-K, File No. 1-5324)
3.4.9 Articles of Amendment dated February 19, 1988. (Exhibit
3.3.9, 1987 NU Form 10-K, File No. 1-5324)
3.4.10 Certificate of Vote of Directors Establishing a Series of a
Class of Stock, dated February 23, 1988. (Exhibit 3.3.10,
1987 NU Form 10-K, File No. 1-5324)
** 3.4.11 By-laws of WMECO, as amended to February 24, 1988.
3.5 North Atlantic Energy Corporation
## 3.5.1 Articles of Incorporation of NAEC dated September 20, 1991.
## 3.5.2 Articles of Amendment dated October 16, 1991 and June 2,
1992 to Articles of Incorporation of NAEC.
## 3.5.3 By-laws of NAEC, as amended to November 8, 1993.
4 Instruments defining the rights of security holders, including indentures
4.1 Northeast Utilities
4.1.1 Indenture dated as of December 1, 1991 between Northeast
Utilities and IBJ Schroder Bank & Trust Company, with
respect to the issuance of Debt Securities. (Exhibit 4.1.1,
1991 NU Form 10-K, File No. 1-5324)
4.1.2 First Supplemental Indenture dated as of December 1, 1991
between Northeast Utilities and IBJ Schroder Bank & Trust
Company, with respect to the issuance of Series A Notes.
(Exhibit 4.1.2, 1991 NU Form 10-K, File No. 1-5324)
4.1.3 Second Supplemental Indenture dated as of March 1, 1992
between Northeast Utilities and IBJ Schroder Bank & Trust
Company with respect to the issuance of 8.38% Amortizing
Notes. (Exhibit 4.1.3, 1992 NU Form 10-K, File No. 1-5324)
E-2
4.1.4 Warrant Agreement dated as of June 5, 1992 between Northeast
Utilities and the Service Company. (Exhibit 4.1.4, 1992 NU
Form 10-K, File No. 1-5324)
4.1.4.1 Additional Warrant Agent Agreement dated as of
June 5, 1992 between Northeast Utilities and
State Street Bank and Trust Company. (Exhibit
4.1.4.1, 1992 NU Form 10-K, File No. 1-5324)
4.1.4.2 Exchange and Disbursing Agent Agreement dated as
of June 5, 1992 among Northeast Utilities,
Public Service Company of New Hampshire and
State Street Bank and Trust Company. (Exhibit
4.1.4.2, 1992 NU Form 10-K, File No. 1-5324)
4.1.5 Credit Agreements among CL&P, NU, WMECO, NUSCO
(as Agent) and 19 Commercial Banks dated
December 3, 1992 (364 Day and Three-Year
Facilities). (Exhibit C.2.38, 1992 NU Form U5S,
File No. 30-246)
4.1.6 Credit Agreements among CL&P, WMECO, NU, Holyoke
Water Power Company, RRR, NNECO and NUSCO (as
Agent) dated December 3, 1992 (364 Day and
Three-Year Facilities). (Exhibit C.2.39, 1992 NU
Form U5S, File No. 30-246)
4.2 The Connecticut Light and Power Company
4.2.1 Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, Trustee, dated as of May 1, 1921.
(Composite including all twenty-four amendments to May 1,
1967.) (Exhibit 4.1.1, 1989 NU Form 10-K, File No. 1-5324)
Supplemental Indentures to the Composite May 1, 1921
Indenture of Mortgage and Deed of Trust between CL&P and
Bankers Trust Company, dated as of:
4.2.2 April 1, 1967. (Exhibit 4.16, File No. 2-60806)
4.2.3 January 1, 1968. (Exhibit 4.18, File No. 2-60806)
4.2.4 December 1, 1969. (Exhibit 4.20, File No. 2-60806)
4.2.5 June 30, 1982. (Exhibit 4.33, File No. 2-79235)
4.2.6 June 1, 1989. (Exhibit 4.1.24, 1989 NU Form 10-K, File No.
1-5324)
4.2.7 September 1, 1989. (Exhibit 4.1.25, 1989 NU Form 10-K, File
No. 1-5324)
4.2.8 December 1, 1989. (Exhibit 4.1.26, 1989 NU Form 10-K, File
No. 1-5324)
4.2.9 April 1, 1992. (Exhibit 4.30, File No. 33-59430)
4.2.10 July 1, 1992. (Exhibit 4.31, File No. 33-59430)
E-3
4.2.11 October 1, 1992. (Exhibit 4.32, File No. 33-59430)
4.2.12 July 1, 1993. (Exhibit A.10(b), File No. 70-8249)
4.2.13 July 1, 1993. (Exhibit A.10(b), File No. 70-8249)
# 4.2.14 December 1, 1993.
# 4.2.15 February 1, 1994.
# 4.2.16 February 1, 1994.
4.2.17 Financing Agreement between Industrial Development Authority
of the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of December 1, 1986. (Exhibit C.1.47, 1986
NU Form U5S, File No. 30-246)
4.2.18 Financing Agreement between Industrial Development Authority
of the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of October 1, 1988. (Exhibit C.1.55, 1988
NU Form U5S, File No. 30-246)
4.2.19 Financing Agreement between Industrial Development Authority
of the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of December 1, 1989. (Exhibit C.1.39, 1989
NU Form U5S, File No. 30-246)
4.2.20 Loan and Trust Agreement among Business Finance Authority of
the State of New Hampshire and CL&P (Pollution Control
Bonds) dated as of December 1, 1992. (Exhibit C.2.33, 1992
NU Form U5S, File No. 30-246)
# 4.2.21 Series A (Tax Exempt Refunding) PCRB Loan Agreement between
Connecticut Development Authority and CL&P (Pollution
Control Bonds) dated as of September 1, 1993.
# 4.2.22 Series B (Tax Exempt Refunding) PCRB Loan Agreement between
Connecticut Development Authority and CL&P (Pollution
Control Bonds) dated as of September 1, 1993.
# 4.2.23 Series A (Tax Exempt Refunding) PCRB Letter of Credit and
Reimbursement Agreement (Pollution Control Bonds) dated as
of September 1, 1993.
# 4.2.24 Series B (Tax Exempt Refunding) PCRB Letter of Credit and
Reimbursement Agreement (Pollution Control Bonds) dated as
of September 1, 1993.
4.3 Public Service Company of New Hampshire
4.3.1 First Mortgage Indenture dated as of August 15, 1978 between
PSNH and First Fidelity Bank, National Association, New
Jersey, Trustee, (Composite including all amendments to May
16, 1991). (Exhibit 4.4.1, 1992 NU Form 10-K, File No. 1-
5324)
E-4
4.3.1.1 Tenth Supplemental Indenture dated as of May 1,
1991 between PSNH and First Fidelity Bank,
National Association. (Exhibit 4.1, PSNH Current
Report on Form 8-K dated February 10, 1992, File
No. 1-6392).
4.3.2 Revolving Credit Agreement dated as May 1, 1991. (Exhibit
4.12, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
4.3.3 Term Credit Agreement dated as of May 1, 1991. (Exhibit
4.11, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
4.3.4 Series A (Tax Exempt New Issue) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.2, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.5 Series B (Tax Exempt Refunding) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.3, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.6 Series C (Tax Exempt Refunding) PCRB Loan and Trust
Agreement dated as of May 1, 1991. (Exhibit 4.4, PSNH
Current Report on Form 8-K dated February 10, 1992, File No.
1-6392)
4.3.7 Series D (Taxable New Issue) PCRB Loan and Trust Agreement
dated as of May 1, 1991. (Exhibit 4.5, PSNH Current Report
on Form 8-K dated February 10, 1992, File No. 1-6392)
4.3.7.1 First Supplement to Series D (Tax Exempt
Refunding Issue) PCRB Loan and Trust Agreement
dated as of December 1, 1992. (Exhibit 4.4.5.1,
1992 NU Form 10-K, File No. 1-5324)
4.3.8 Series E (Taxable New Issue) PCRB Loan and Trust Agreement
dated as of May 1, 1991. (Exhibit 4.6, PSNH Current Report
on Form 8-K dated February 10, 1992, File No. 1-6392)
@ 4.3.8.1 First Supplement to Series E (Tax Exempt
Refunding Issue) PCRB Loan and Trust Agreement
dated as of December 1, 1993.
@ 4.3.9 Series D (May 1, 1991 Taxable New Issue and December 1, 1992
Tax Exempt Refunding Issue) PCRB Letter of Credit and
Reimbursement Agreement dated as of October 1, 1992.
@ 4.3.9.1 Amended and Restated Letter of Credit dated
December 17, 1992.
4.3.10 Series E (May 1, 1991 Taxable New Issue and December 1, 1993
Tax Exempt Refunding Issue) PCRB Letter of Credit and
Reimbursement Agreement dated as of May 1, 1991. (Exhibit
4.8, PSNH Current Report on Form 8-K dated February 10,
1992, File No. 1-6392)
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@ 4.3.10.1 Amended and Restated Letter of Credit dated
December 15, 1993.
4.4 Western Massachusetts Electric Company
** 4.4.1 First Mortgage Indenture and Deed of Trust between WMECO and
Old Colony Trust Company, Trustee, dated as of August 1,
1954.
Supplemental Indentures thereto dated as of:
4.4.2 March 1, 1967. (Exhibit 2.5, File No. 2-68808)
4.4.3 March 1, 1968. (Exhibit 2.6, File No. 2-68808)
4.4.4 December 1, 1968. (Exhibit 2.7, File No. 2-68808)
4.4.5 July 1, 1972. (Exhibit 2.9, File No. 2-68808)
4.4.6 May 1, 1986. (Exhibit 4.3.18, 1986 NU Form 10-K, File No.
1-5324)
4.4.7 December 1, 1988. (Exhibit 4.3.20, 1988 NU Form 10-K, File
No. 1-5324.)
4.4.8 September 1, 1990. (Exhibit 4.3.15, 1990 NU Form 10-K, File
No. 1-5324.)
4.4.9 December 1, 1992. (Exhibit 4.15, File No. 33-55772)
4.4.10 January 1, 1993. (Exhibit 4.5.13, 1992 NU Form 10-K, File
No. 1-5324)
** 4.4.11 March 1, 1994.
** 4.4.12 March 1, 1994.
** 4.4.13 Series A (Tax Exempt Refunding) PCRB Loan Agreement between
Connecticut Development Authority and WMECO (Pollution
Control Bonds) dated as of September 1, 1993.
** 4.4.14 Series A (Tax Exempt Refunding) PCRB Letter of Credit and
Reimbursement Agreement (Pollution Control Bonds) dated as
of September 1, 1993.
4.5 North Atlantic Energy Corporation
4.5.1 First Mortgage Indenture and Deed of Trust between NAEC and
United States Trust Company of New York, Trustee, dated as
of June 1, 1992. (Exhibit 4.6.1, 1992 NU Form 10-K, File
No. 1-5324)
4.5.2 Note Indenture dated as of May 15, 1991. (Exhibit 4.10,
PSNH Current Report on Form 8-K dated February 10, 1992,
File No. 1-6392)
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4.5.3 First Supplemental Indenture dated as of June 5, 1992
between NAEC, PSNH and United States Trust Company of New
York, Trustee. (Exhibit 4.6.3, 1992 NU Form 10-K, File No.
1-5324)
10 Material Contracts
10.1 Stockholder Agreement dated as of July 1, 1964 among the
stockholders of Connecticut Yankee Atomic Power Company (CYAPC).
(Exhibit 13.1, File No. 2-22958)
10.2 Form of Power Contract dated as of July 1, 1964 between CYAPC and
each of CL&P, HELCO, PSNH and WMECO. (Exhibit 13.2, File No.
2-22958)
10.2.1 Form of Additional Power Contract dated as of April 30,
1984, between CYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.2.4, 1984 NU Form 10-K, File No. 1-5324)
10.2.2 Form of 1987 Supplementary Power Contract dated as of April
1, 1987, between CYAPC and each of CL&P, PSNH and WMECO.
(Exhibit 10.2.6, 1987 NU Form 10-K, File No. 1-5324)
10.3 Capital Funds Agreement dated as of September 1, 1964 between CYAPC
and CL&P, HELCO, PSNH and WMECO. (Exhibit 13.3, File No. 2-22958)
#@** 10.4 Stockholder Agreement dated December 10, 1958 between Yankee Atomic
Electric Company (YAEC) and CL&P, HELCO, PSNH and WMECO.
10.5 Form of Amendment No. 3, dated as of April 1, 1985, to Power
Contract between YAEC and each of CL&P, PSNH and WMECO, including
a composite restatement of original Power Contract dated June 30,
1959 and Amendment No. 1 dated April 1, 1975 and Amendment No. 2
dated October 1, 1980. (Exhibit 10.5, 1988 NU Form 10-K, File No.
1-5324.)
10.5.1 Form of Amendment No. 4 to Power Contract, dated May 6,
1988, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.1, 1989 NU Form 10-K, File No. 1-5324)
10.5.2 Form of Amendment No. 5 to Power Contract, dated June 26,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.2, 1989 NU Form 10-K, File No. 1-5324)
10.5.3 Form of Amendment No. 6 to Power Contract, dated July 1,
1989, between YAEC and each of CL&P, PSNH and WMECO.
(Exhibit 10.5.3, 1989 NU Form 10-K, File No. 1-5324)
#@** 10.5.4 Form of Amendment No. 7 to Power Contract, dated February 1,
1992, between YAEC and each of CL&P, PSNH and WMECO.
10.6 Stockholder Agreement dated as of May 20, 1968 among stockholders
of MYAPC. (Exhibit 4.15, File No. 2-30018)
10.7 Form of Power Contract dated as of May 20, 1968 between MYAPC and
each of CL&P, HELCO, PSNH and WMECO. (Exhibit 4.14, File No.
2-30018)
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#@** 10.7.1 Form of Amendment No. 1 to Power Contract dated as of March
1, 1983 between MYAPC and each of CL&P, PSNH and WMECO.
#@** 10.7.2 Form of Amendment No. 2 to Power Contract dated as of
January 1, 1984 between MYAPC and each of CL&P, PSNH and
WMECO.
10.7.3 Form of Amendment No. 3 to Power Contract dated as of
October 1, 1984 between MYAPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.7.3, 1985 NU Form 10-K, File No. 1-5324)
#@** 10.7.4 Form of Additional Power Contract dated as of February 1,
1984 between MYAPC and each of CL&P, PSNH and WMECO.
10.8 Capital Funds Agreement dated as of May 20, 1968 between Maine
Yankee Atomic Power Company (MYAPC) and CL&P, PSNH, HELCO and
WMECO. (Exhibit 4.13, File No. 2-30018)
10.8.1 Amendment No. 1 to Capital Funds Agreement, dated as of
August 1, 1985, between MYAPC, CL&P, PSNH and WMECO.
(Exhibit 10.6.1, 1985 NU Form 10-K, File No. 1-5324)
10.9 Sponsor Agreement dated as of August 1, 1968 among the sponsors of
VYNPC. (Exhibit 4.16, File No. 2-30285)
10.10 Form of Power Contract dated as of February 1, 1968 between
VYNPC and each of CL&P, HELCO, PSNH and WMECO. (Exhibit
4.18, File No. 2-30018)
10.10.1 Form of Amendment to Power Contract dated as of June
1, 1972 between VYNPC and each of CL&P, HELCO, PSNH
and WMECO. (Exhibit 5.22, File No. 2-47038)
#@** 10.10.2 Form of Second Amendment to Power Contract dated as of
April 15, 1983 between VYNPC and each of CL&P, PSNH
and WMECO.
10.10.3 Form of Third Amendment to Power Contract dated as of
April 24, 1985 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.3, 1986 NU Form 10-K, File
No. 1-5324)
10.10.4 Form of Fourth Amendment to Power Contract dated as of
June 1, 1985 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.4, 1986 NU Form 10-K, File No.
1-5324)
10.10.5 Form of Fifth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.5, 1990 NU Form 10-K, File
No. 1-5324)
10.10.6 Form of Sixth Amendment to Power Contract dated as of
May 6, 1988 between VYNPC and each of CL&P, PSNH and
WMECO. (Exhibit 10.10.6, 1990 NU Form 10-K, File No.
1-5324)
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10.10.7 Form of Seventh Amendment to Power Contract dated as
of June 15, 1989 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.7, 1990 NU Form 10-K, File
No. 1-5324)
10.10.8 Form of Eighth Amendment to Power Contract dated as of
December 1, 1989 between VYNPC and each of CL&P, PSNH
and WMECO. (Exhibit 10.10.8, 1990 NU Form 10-K, File
No. 1-5324)
#@** 10.10.9 Form of Additional Power Contract dated as of February
1, 1984 between VYNPC and each of CL&P, PSNH and
WMECO.
10.11 Capital Funds Agreement dated as of February 1, 1968 between
Vermont Yankee Nuclear Power Corporation (VYNPC) and CL&P,
HELCO, PSNH and WMECO. (Exhibit 4.16, File No. 2-30018)
10.11.1 Form of First Amendment to Capital Funds Agreement
dated as of March 12, 1968 between VYNPC and CL&P,
HELCO, PSNH and WMECO. (Exhibit 4.17, File
No. 2-30018)
#@** 10.11.2 Form of Second Amendment to Capital Funds Agreement
dated as of September 1, 1993 between VYNPC and CL&P,
HELCO, PSNH and WMECO.
10.12 Amended and Restated Millstone Plant Agreement dated as of
December 1, 1984 by and among CL&P, WMECO and Northeast
Nuclear Energy Company (NNECO). (Exhibit 10.17, 1985 NU
Form 10-K, File No. 1-5324)
10.13 Sharing Agreement dated as of September 1, 1973 with respect
to 1979 Connecticut nuclear generating unit (Millstone 3).
(Exhibit 6.43, File No. 2-50142)
10.13.1 Amendment dated August 1, 1974 to Sharing Agreement -
1979 Connecticut Nuclear Unit. (Exhibit 5.45, File
No. 2-52392)
10.13.2 Amendment dated December 15, 1975 to Sharing Agreement
- 1979 Connecticut Nuclear Unit. (Exhibit 7.47, File
No. 2-60806)
10.13.3 Amendment dated April 1, 1986 to Sharing Agreement -
1979 Connecticut Nuclear Unit. (Exhibit 10.17.3, 1990
NU Form 10-K, File No. 1-5324)
10.14 Agreement dated July 19, 1990, among NAESCO and Seabrook
Joint owners with respect to operation of Seabrook.
(Exhibit 10.53, 1990 NU Form 10-K, File No. 1-5324)
10.15 Sharing Agreement between CL&P, WMECO, HP&E, HWP and PSNH
dated as of June 1, 1992. (Exhibit 10.17, 1992 NU Form 10-
K, File No. 1-5324)
10.16 Form of Seabrook Power Contract between PSNH and NAEC, as
amended and restated. (Exhibit 10.45, NU 1992 Form 10-K,
File No. 1-5324)
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10.17 Agreement for joint ownership, construction and operation of
New Hampshire nuclear generating units dated as of May 1,
1973. (Exhibit 13-57, File No. 2-48966)
10.17.1 Amendments to Exhibit 10.17 dated May 24, 1974, June
21, 1974 and September 25, 1974. (Exhibit 5.15, File
No. 2-51999)
10.17.2 Amendments to Exhibit 10.17 dated October 25, 1974 and
January 31, 1975. (Exhibit 5.23, File No. 2-54646)
10.17.3 Sixth Amendment to Exhibit 10.17 dated as of April 18,
1979. (Exhibit 5.4.3, File No. 2-64294)
10.17.4 Seventh Amendment to Exhibit 10.17 dated as of April
18, 1979. (Exhibit 5.4.4, File No. 2-64294)
10.17.5 Eighth Amendment to Exhibit 10.17 dated as of April
25, 1979. (Exhibit 5.4.5, File No. 2-64815)
10.17.6 Ninth Amendment to Exhibit 10.17 dated as of June 8,
1979. (Exhibit 5.4.6, File No. 2-64815)
10.17.7 Tenth Amendment to Exhibit 10.17 dated as of October
10, 1979. (Exhibit 5.4.2, File No. 2-66334)
10.17.8 Eleventh Amendment to Exhibit 10.17 dated as of
December 15, 1979. (Exhibit 5.4.8, File No. 2-66492)
10.17.9 Twelfth Amendment to Exhibit 10.17 dated as of June
16, 1980. (Exhibit 5.4.9, File No. 2-68168)
10.17.10 Thirteenth Amendment to Exhibit 10.17 dated as of
December 31, 1980. (Exhibit 10.6, File No. 2-70579)
* 10.17.11 Fourteenth Amendment to Exhibit 10.17 dated as of June
1, 1982.
10.17.12 Fifteenth Amendment to Exhibit 10.17 dated as of April
27, 1984. (Exhibit 10.14.12, 1984 NU Form 10-K, File
No. 1-5324)
10.17.13 Sixteenth Amendment to Exhibit 10.17 dated as of June
15, 1984. (Exhibit 10.14.13, 1984 NU Form 10-K, File
No. 1-5324)
10.17.14 Seventeenth Amendment to Exhibit 10.17 dated as of
March 8, 1985. (Exhibit 10.13.14, 1985 NU Form 10-K,
File No. 1-5324)
10.17.15 Eighteenth Amendment to Exhibit 10.17 dated as of
March 14, 1986. (Exhibit 10.13.15, 1986 NU Form 10-K,
File No. 1-5324)
10.17.16 Nineteenth Amendment to Exhibit 10.17 dated as of May
1, 1986. (Exhibit 10.13.16, 1986 NU Form 10-K, File
No. 1-5324)
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10.17.17 Twentieth Amendment to Exhibit 10.17 dated as of July
15, 1986. (Exhibit 10.13.17, 1986 NU Form 10-K, File
No. 1-5324)
10.17.18 Twenty-first Amendment to Exhibit 10.17 dated as of
November 12, 1987. (Exhibit 10.13.18, 1987 NU Form
10-K, File No. 1-5324)
10.17.19 Twenty-second Amendment to Exhibit 10.17 dated as of
January 13, 1989. (Exhibit 10.13.19, 1989 NU Form
10-K, File No. 1-5324)
10.17.20 Twenty-third Amendment to Exhibit 10.17 dated as of
November 1, 1990. (Exhibit 10.13.20, 1990 NU Form 10-
K, File No. 1-5324)
10.17.21 Memorandum of Understanding dated November 7, 1988
between PSNH and Massachusetts Municipal Wholesale
Electric Company (Exhibit 10.17, PSNH 1989 Form 10-K,
File No. 1-6392)
10.17.22 Agreement of Settlement among Joint Owners dated as of
January 13, 1989. (Exhibit 10.13.21, 1988 NU Form 10-
K, File No. 1-5324)
10.17.22.1 Supplement to Settlement Agreement, dated as of
February 7, 1989, between PSNH and Central Maine
Power Company. (Exhibit 10.18.1, PSNH 1989 Form
10-K, File No. 1-6392)
10.18 Amended and Restated Agreement for Seabrook Project
Disbursing Agent dated as of November 1, 1990. (Exhibit
10.4.7, File No. 33-35312)
10.18.1 Form of First Amendment to Exhibit 10.18. (Exhibit
10.4.8, File No. 33-35312)
* 10.18.2 Form (Composite) of Second Amendment to Exhibit 10.18.
10.19 Agreement dated November 1, 1974 for Joint Ownership,
Construction and Operation of William F. Wyman Unit No. 4
among PSNH, Central Maine Power Company and other utilities.
(Exhibit 5.16 , File No. 2-52900)
10.19.1 Amendment to Exhibit 10.19 dated June 30, 1975.
(Exhibit 5.48, File No. 2-55458)
10.19.2 Amendment to Exhibit 10.19 dated as of August 16,
1976. (Exhibit 5.19, File No. 2-58251)
10.19.3 Amendment to Exhibit 10.19 dated as of December 31,
1978. (Exhibit 5.10.3, File No. 2-64294)
#** 10.20 Form of Service Contract dated as of July 1, 1966 between
each of NU, CL&P and WMECO and the Service Company.
10.20.1 Service Contract dated as of June 5, 1992 between PSNH
and the Service Company. (Exhibit 10.12.4, 1992 NU
Form 10-K, File No. 1-5324)
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10.20.2 Service Contract dated as of June 5, 1992 between NAEC
and the Service Company. (Exhibit 10.12.5, 1992 NU
Form 10-K, File No. 1-5324)
* 10.20.3 Form of Annual Renewal of Service Contract.
10.21 Memorandum of Understanding between CL&P, HELCO, Holyoke
Power and Electric Company (HP&E), Holyoke Water Power
Company (HWP) and WMECO dated as of June 1, 1970 with
respect to pooling of generation and transmission. (Exhibit
13.32, File No. 2-38177)
#** 10.21.1 Amendment to Memorandum of Understanding between CL&P,
HELCO, HP&E, HWP and WMECO dated as of February 2,
1982 with respect to pooling of generation and
transmission.
10.22 New England Power Pool Agreement effective as of November 1,
1971, as amended to November 1, 1988. (Exhibit 10.15, 1988
NU Form 10-K, File No. 1-5324.)
10.22.1 Twenty-sixth Amendment to Exhibit 10.22 dated as of
March 15, 1989. (Exhibit 10.15.1, 1990 NU Form 10-K,
File No. 1-5324)
10.22.2 Twenty-seventh Amendment to Exhibit 10.22 dated as of
October 1, 1990. (Exhibit 10.15.2, 1991 NU Form 10-K,
File No. 1-5324)
10.22.3 Twenty-eighth Amendment to Exhibit 10.22 dated as of
September 15, 1992. (Exhibit 10.18.3, 1992 NU Form
10-K, File No. 1-5324)
* 10.22.4 Twenty-ninth Amendment to Exhibit 10.22 dated as of
May 1, 1993.
10.23 Agreements among New England Utilities with respect to the
Hydro-Quebec interconnection projects. (See Exhibits 10(u)
and 10(v); 10(w), 10(x), and 10(y), 1990 and 1988,
respectively, Form 10-K of New England Electric System,
File No. 1-3446.)
10.24 Trust Agreement dated February 11, 1992, between State
Street Bank and Trust Company of Connecticut, as Trustor,
and Bankers Trust Company, as Trustee, and CL&P and WMECO,
with respect to NBFT. (Exhibit 10.23, 1991 NU Form 10-K,
File No. 1-5324)
10.24.1 Nuclear Fuel Lease Agreement dated as of February 11,
1992, between Bankers Trust Company, Trustee, as
Lessor, and CL&P and WMECO, as Lessees. (Exhibit
10.23.1, 1991 NU Form 10-K, File No. 1-5324)
10.25 Simulator Financing Lease Agreement, dated as of February 1,
1985, by and between ComPlan and NNECO. (Exhibit 10.52,
1985 NU Form 10-K, File No. 1-5324)
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10.26 Simulator Financing Lease Agreement, dated as of May 2,
1985, by and between The Prudential Insurance Company of
America and NNECO. (Exhibit 10.53, 1985 NU Form 10-K, File
No. 1-5324)
10.27 Lease dated as of April 14, 1992 between The Rocky River
Realty Company (RRR) and Northeast Utilities Service Company
(NUSCO) with respect to the Berlin, Connecticut headquarters
(office lease). (Exhibit 10.29, 1992 NU Form 10-K, File
No. 1-5324)
10.27.1 Lease date as of April 14, 1992 between RRR and NUSCO
with respect to the Berlin, Connecticut headquarters
(project lease). (Exhibit 10.29.1, 1992 NU Form 10-K,
File No. 1-5324)
* 10.28 Millstone Technical Building Note Agreement dated as of
December 21, 1993 between, by and between The Prudential
Insurance Company of America and NNECO.
10.29 Lease and Agreement, dated as of December 15, 1988, by and
between WMECO and Bank of New England, N.A., with BNE Realty
Leasing Corporation of North Carolina. (Exhibit 10.63, 1988
NU Form 10-K, File No. 1-5324.)
10.30 Note Agreement dated April 14, 1992, by and between The
Rocky River Realty Company (RRR) and Purchasers named
therein (Connecticut General Life Insurance Company, Life
Insurance Company of North America, INA Life Insurance
Company of New York, Life Insurance Company of Georgia),
with respect to RRR's sale of $15 million of guaranteed
senior secured notes due 2007 and $28 million of guaranteed
senior secured notes due 2017. (Exhibit 10.52, 1992 NU Form
10-K, File No. 1-5324)
10.30.1 Note Guaranty dated April 14, 1992 by Northeast
Utilities pursuant to Note Agreement dated April 14,
1992 between RRR and Note Purchasers, for the benefit
of The Connecticut National Bank as Trustee, the
Purchasers and the owners of the notes. (Exhibit
10.52.1, 1992 NU Form 10-K, File No. 1-5324)
10.30.2 Assignment of Leases, Rents and Profits, Security
Agreement and Negative Pledge, dated as of April 14,
1992 among RRR, NUSCO and The Connecticut National
Bank as Trustee, securing notes sold by RRR pursuant
to April 14, 1992 Note Agreement. (Exhibit 10.52.2,
1992 NU Form 10-K, File No. 1-5324)
10.31 Master Trust Agreement dated as of September 2, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 1 decommissioning costs.
(Exhibit 10.80, 1986 NU Form 10-K, File No. 1-5324)
10.31.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.41.1, 1992 NU
Form 10-K, File No. 1-5324)
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10.32 Master Trust Agreement dated as of September 2, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 2 decommissioning costs.
(Exhibit 10.81, 1986 NU Form 10-K, File No. 1-5324)
10.32.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.42.1, 1992 NU
Form 10-K, File No. 1-5324)
10.33 Master Trust Agreement dated as of April 23, 1986 between
CL&P and WMECO and Colonial Bank as Trustee, with respect to
reserve funds for Millstone 3 decommissioning costs.
(Exhibit 10.82, 1986 NU Form 10-K, File No. 1-5324)
10.33.1 Notice of Appointment of Mellon Bank, N.A. as
Successor Trustee, dated November 20, 1990, and
Acceptance of Appointment. (Exhibit 10.43.1, 1992 NU
Form 10-K, File No. 1-5324)
10.34 NU Executive Incentive Plan, effective as of January 1,
1991. (Exhibit 10.44, NU 1991 Form 10-K, File No. 1-5324)
10.35 Supplemental Executive Retirement Plan for Officers of NU
System Companies, Amended and Restated effective as of
January 1, 1992. (Exhibit 10.45.1, NU Form 10-Q for the
Quarter Ended June 30, 1992, File No. 1-5324)
* 10.35.1 Amendment 1 to Exhibit 10.35, effective as of August
1, 1993.
* 10.35.2 Amendment 2 to Exhibit 10.35, effective as of January
1, 1994.
10.36 Loan Agreement dated as of December 2, 1991, by and between
NU and Mellon Bank, N.A., as Trustee, with respect to NU's
loan of $175 million to an ESOP Trust. (Exhibit 10.46, NU
1991 Form 10-K, File No. 1-5324)
* 10.36.1 First Amendment to Exhibit 10.36 dated February 7,
1992.
10.36.2 Loan Agreement dated as of March 19, 1992 by and
between NU and Mellon Bank, N.A., as Trustee, with
respect to NU's loan of $75 million to the ESOP Trust.
(Exhibit 10.49.1, 1992 NU Form 10-K, File No. 1-5324)
* 10.36.3 Second Amendment to Exhibit 10.36 dated April 9, 1992.
10.37 Management Succession Agreement. (Exhibit 10.47, NU Form
10-Q for the Quarter Ended June 30, 1992, File No. 1-5324)
10.38 Employment Agreement. (Exhibit 10.48, NU Form 10-Q for the
Quarter Ended June 30, 1992, File No. 1-5324)
13 Annual Report to Security Holders (Each of the Annual Reports is filed
only with the Form 10-K of that respective registrant.)
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* 13.1 Portions of the Annual Report to Security Holders of NU (pages
17 - 54) that have been incorporated by reference into this
Form 10-K.
13.2 Annual Report of CL&P.
13.3 Annual Report of WMECO.
13.4 Annual Report of PSNH.
13.5 Annual Report of NAEC.
21 Subsidiaries of the Registrant (Exhibit 22, 1992 NU Form 10-K, File
1-5324)
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