Eversource 2005 Annual Report Download - page 81

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judge proceedings. CYAPC received an order on August 30, 2004 from
the FERC allowing collection of its decommissioning and closure costs,
subject to refund. The table of estimated future annual Utility Group
costs below includes the estimated decommissioning and closure
costs for YAEC, MYAPC and CYAPC.
Estimated Future Annual Utility Group Costs: The estimated future annual
costs of the Utility Group’s significant long-term contractual
arrangements at December 31, 2005 are as follows:
(Millions of Dollars) 2006 2007 2008 2009 2010 Thereafter
VYNPC $ 28.6 $ 27.5 $ 27.8 $ 30.2 $ 29.2 $ 37.1
Electricity procurement contracts 336.3 267.4 230.4 200.7 179.2 930.5
Natural gas procurement contracts 239.6 103.3 38.0 37.5 37.1 73.0
PNGTS pipeline commitments 2.0 2.0 2.0 2.0 2.0 15.9
Hydro-Quebec 23.4 22.3 22.1 21.9 21.9 216.9
Transmission business project commitments 173.8 7.0 7.0 7.0 — —
Yankee Gas LNG facility 41.9 4.0 — — — —
Northern Wood Power Project 6.5 — — — — —
Yankee Companies FERC-approved billings, subject to refund 95.1 75.4 65.4 61.7 60.6 —
Totals $947.2 $508.9 $392.7 $361.0 $330.0 $1,273.4
NU Enterprises:
Select Energy Purchase Agreements: Select Energy maintains long-term
agreements to purchase energy as part of its portfolio of resources
to meet its actual or expected sales commitments. These sales
commitments wereformerly accounted for on the accrual basis but
arenow recorded at their mark-to-market value.
Contract Assignment Agreement: During the fourth quarter of 2005, Select
Energy settled a wholesale contract for $55.9 million with payments
commencing in Januaryof 2006 and ending in December of 2008. If
certain conditions aremet, these payments could be accelerated.
NGC Northfield Mountain Commitment: NGC has a commitment to purchase
aspare main transformer to be delivered in the summer of 2006 for
on-site storage. The transformer will cost $4 million and will replace
one of the two existing in-service transformers.
HWP Project Commitments: In March of 2005, HWP notified Massachusetts
environmental regulators that it planned to install a selective catalytic
reduction system at the 146 MW Mt. Tom coal-fired station in Holyoke,
Massachusetts. The $14 million project commenced in July of 2005
and is expected to be completed by mid-2006. Amounts spent on this
project through December 31, 2005 totaled $9.9 million.
HWP Coal Commitments: In July of 2005, HWP entered into a $50.4 million
contract to purchase coal to fuel the Mt. Tom coal-fired station in
Holyoke, Massachusetts. Obligations under this contract will
commence in 2006.
Estimated FutureAnnual NU Enterprises Costs: The estimated futureannual
costs of NU Enterprises’ significant contractual arrangements are
as follows:
(Millions of Dollars) 2006 2007 2008 2009 2010 Thereafter
Select Energy purchase agreements $2,226.1 $657.0 $281.1 $20.3 $18.2 $5.0
Contract assignment agreement 18.5 18.3 19.1 — — —
NGC Northfield Mountain commitment 4.0 — — — — —
HWP project commitments 4.1 — — — — —
HWP coal commitments 2.3 22.9 22.9 2.3 — —
Totals $2,255.0 $698.2 $323.1 $22.6 $18.2 $5.0
Select Energy’s purchase contract amounts exceed the amount
expected to be reported in fuel, purchased and net interchange power
because energy trading transactions are classified in revenues. Select
Energy also maintains certain wholesale energy commitments whose
mark-to-market values have been recorded on the consolidated balance
sheets as derivative assets and liabilities. The aggregate amount of
these purchase contracts was $2.6 billion at December 31, 2005.
The amounts and timing of the costs associated with Select Energy’s
purchase agreements could be impacted by the exit from NU
Enterprises’ merchant energy business.
E. Deferred Contractual Obligations
FERC Proceedings: In 2003, CYAPC increased the estimated
decommissioning and plant closure costs for the period 2000 through
2023 by approximately $395 million over the April 2000 estimate of
$436 million approved by the FERC in a 2000 rate case settlement.
The revised estimate reflects the increases in the projected costs of
spent fuel storage, increased security and liability and property insurance
costs, and the fact that CYAPC is now self performing all work to
complete the decommissioning of the plant due to the termination
of the decommissioning contract with Bechtel Power Corporation
(Bechtel) in July of 2003. NU’s share of CYAPC’s increase in
decommissioning and plant closure costs is approximately $194 million.