Eversource 2009 Annual Report Download - page 136

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The NU Foundation (Foundation) is an independent not-for-profit charitable entity designed to invest in projects that emphasize
economic development, workforce training and education, and a clean and healthy environment. The board of directors of the
Foundation consists of certain NU officers. The Foundation is not included in the consolidated financial statements of NU because the
Foundation is a not-for-profit entity and because the Company does not have title to the Foundation's assets and cannot receive
contributions back from the Foundation. NU did not make any contributions to the Foundation in 2009 and 2008. In 2007, NU made
aggregate discretionary contributions of $3 million (including $0.6 million for CL&P, $0.6 million for PSNH, and $0.1 million for WMECO)
to the Foundation.
2. Short-Term Debt (All Companies)
Limits: The amount of short-term borrowings that may be incurred by CL&P and WMECO is subject to periodic approval by the FERC
and short-term borrowings by PSNH are subject to approval by the NHPUC. On December 12, 2007, the FERC granted authorization
to allow CL&P and WMECO to incur total short-term borrowings up to a maximum of $450 million and $200 million, respectively,
through December 31, 2009. On December 22, 2009, the FERC extended this authorization to allow CL&P to incur total short-term
borrowings up to a maximum of $450 million and increased WMECO's authorization to $300 million, effective January 1, 2010 through
December 31, 2011.
PSNH is authorized by regulation of the NHPUC to incur short-term borrowings up to 10 percent of net fixed plant. In an order dated
October 5, 2009, the NHPUC increased the amount of short-term borrowings authorized for PSNH to a maximum of 10 percent of net
fixed plant plus an additional $60 million on a temporary basis that will expire upon PSNH's next NHPUC approval for the issuance of
long-term debt. As of December 31, 2009, PSNH's short-term debt authorization under the 10 percent of net fixed plant test plus $60
million totaled $215 million. As a result of the NHPUC having jurisdiction over PSNH's short-term debt, PSNH is not currently required
to obtain FERC approval for its short-term borrowings.
CL&P's certificate of incorporation contains preferred stock provisions restricting the amount of unsecured debt that CL&P may incur,
including limiting unsecured indebtedness with a maturity of less than 10 years to 10 percent of total capitalization. In November 2003,
CL&P obtained from its preferred stockholders a waiver of such 10 percent limit for a ten-year period expiring in March 2014, provided
that all unsecured indebtedness does not exceed 20 percent of total capitalization. As of December 31, 2009, CL&P had approximately
$910.9 million of unsecured debt capacity available under this authorization.
Yankee Gas is not required to obtain approval from any state or federal authority to incur short-term debt.
Regulated Companies Credit Agreement: CL&P, PSNH, WMECO, and Yankee Gas are parties to a five-year unsecured revolving
credit facility in the nominal amount of $400 million that expires on November 6, 2010. CL&P may draw up to $200 million under this
facility, with PSNH, WMECO, and Yankee Gas able to draw up to $100 million each, subject to the $400 million maximum borrowing
limit. This total commitment may be increased to $500 million at the request of the borrowers, subject to lender approval. There were
no borrowings outstanding under this facility as of December 31, 2009. There were $188 million, $45.2 million, $29.9 million and $52.3
million in short-term borrowings outstanding by CL&P, PSNH, WMECO, and Yankee Gas, respectively, as of December 31, 2008. The
weighted-average interest rate on these short-term borrowings on December 31, 2008 was 3.35 percent.
NU Parent Credit Agreement: NU has a 5-year unsecured revolving credit agreement with a total nominal commitment of $500 million,
which expires on November 6, 2010. Subject to the amount of advances outstanding, letters of credit (LOCs) may be issued for periods
up to 364 days in the name of NU or any of its subsidiaries.
Under this facility, NU can borrow either on a short-term or a long-term basis. As of December 31, 2009 and 2008, NU had $100.3
million and $303.5 million, respectively, in short-term borrowings outstanding under this facility. The weighted-average interest rate on
such borrowings outstanding under these credit agreements on December 31, 2009 and 2008 was 0.63 percent and 3.35 percent,
respectively. There were $41 million ($39 million for PSNH) and $87 million ($85 million for PSNH) in LOCs outstanding as of
December 31, 2009 and 2008, respectively.
Under the regulated companies' and NU parent credit agreements, NU and the regulated companies may borrow at prime rates or
variable rates plus an applicable margin based upon the higher of Standard and Poor's or Moody's Investors Service credit ratings
assigned to the borrower.
A participating lender in both agreements, Lehman Brothers Commercial Bank, Inc. has refused to fund its remaining aggregate
commitment of approximately $56 million since September 2008. As a result, the amount of borrowing availability under NU's credit
facility was $341 million while the amount available under the regulated companies' facility was $361.8 million as of December 31, 2009.
In addition, NU and the regulated companies must comply with certain financial and non-financial covenants, including a consolidated
debt to total capitalization ratio. NU and the regulated companies are in compliance with these covenants as of December 31, 2009. If
NU or the regulated companies were not in compliance with these covenants, an Event of Default would occur requiring all outstanding
borrowings to be repaid and additional borrowings would not be permitted under the respective credit agreement.
Pool: NU Parent, CL&P, PSNH, WMECO, Yankee Gas and certain of NU's other subsidiaries are members of the Pool. The Pool
provides a more efficient use of cash resources of NU and reduces outside short-term borrowings. NUSCO participates in the Pool and
administers the Pool as agent for the member companies. Short-term borrowing needs of the member companies are met with