Eversource 2009 Annual Report Download - page 156

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million for CL&P, $72.9 million for PSNH, and $2.6 million for WMECO) in 2007. The majority of the contracts/purchase obligations
expire by 2014 for CL&P and 2018 for PSNH.
In addition, CL&P and UI have entered into four CfDs for a total of approximately 787 MW of capacity with three generation projects
being built or modified and one demand response project. The capacity CfDs extend through 2026 and obligate the utilities to pay the
difference between a set price and the value that the projects receive in the ISO-NE markets. The total cash cost recorded by CL&P for
these contracts amounted to $1.3 million in 2009. The contracts have terms of up to 15 years beginning in 2009 and are subject to a
sharing agreement with UI, whereby UI will share 20 percent of the costs and benefits of these contracts. CL&P's portion of the costs
and benefits of these contracts will be paid by or refunded to CL&P's customers. The information in the table above includes 100
percent of the payments projected as of December 31, 2009 under the contracts entered into by CL&P and 80 percent of the payments
projected under the contracts entered into by UI. The amounts of these payments are subject to changes in capacity and forward
reserve prices that the projects receive in the ISO-NE capacity markets. On February 7, 2010, an explosion occurred at the
construction site of Kleen Energy Systems, LLC's 620 MW generation project with which CL&P has a CfD. This event could delay or
change CL&P's estimated payments under the CfD contract. Currently, management cannot estimate the effects of this recent event on
the amounts of CL&P's obligations under the contract. For further information, see Note 19, “Subsequent Event,” to the consolidated
financial statements.
These amounts do not include contractual commitments related to CL&P's standard or last resort service or WMECO's default service,
both of which represent contractual commitments that are conditional upon CL&P and WMECO customers' use of energy, and PSNH's
short-term power supply management.
Renewable Energy Contracts: CL&P has entered into various agreements to purchase energy, capacity and renewable energy credits
from renewable energy facilities. Amounts payable under these contracts are subject to a sharing agreement with UI, whereby UI will
share approximately 20 percent of the costs and benefits of these contracts. In addition, UI has entered into contracts that are subject
to this cost sharing agreement under which CL&P will share in approximately 80 percent of the costs and benefits of the contract. The
information in the table above includes 100 percent of the payments projected under the contracts entered into by CL&P and 80 percent
of the payments projected under the contracts entered into by UI. CL&P's portion of the costs and benefits of these contracts will be
paid by or refunded to CL&P's customers.
Peaker CfDs: In 2008, CL&P entered into three CfDs with developers of peaking generation units approved by the DPUC (Peaker
CfDs). These units will have a total of approximately 500 MW of peaking capacity. As directed by the DPUC, CL&P and UI have
entered into a sharing agreement, whereby CL&P is responsible for 80 percent and UI for 20 percent of the net costs or benefits of
these CfDs. The Peaker CfDs pay the developer the difference between capacity, forward reserve and energy market revenues and a
cost-of-service payment stream for 30 years. The information in the table above includes 100 percent of the estimated payments
projected under the contracts, before reimbursement from UI under the sharing agreement. The ultimate cost or benefit to CL&P under
these contracts will depend on the costs of plant construction and operation and the prices that the projects receive for capacity and
other products in the ISO-NE markets. CL&P's portion of the amounts paid or received under the Peaker CfDs will be recoverable from
or refunded to CL&P's customers.
Natural Gas Procurement Contracts: Yankee Gas has entered into long-term contracts for the purchase of natural gas in the normal
course of business as part of its portfolio of supplies. These contracts extend through 2022. The total cost of Yankee Gas'
procurement portfolio, including these contracts, amounted to $236.3 million in 2009, $352.5 million in 2008 and $305.3 million in 2007.
Wood, Coal and Transportation Contracts: PSNH has entered into various arrangements for the purchase of wood, coal and the
transportation services for fuel supply for its electric generating assets in 2009. PSNH's fuel and natural gas costs, excluding emissions
allowances, amounted to approximately $156.7 million in 2009, $165.4 million in 2008 and $183.8 million in 2007.
PNGTS Pipeline Commitments: PSNH has a contract for capacity on the Portland Natural Gas Transmission System (PNGTS) pipeline
that extends through 2018. The cost under this contract amounted to $1.6 million in 2009, $1.5 million in 2008 and $3.1 million in 2007.
These costs are not recovered from PSNH's retail customers.
Transmission Support Commitments: Along with other New England utilities, CL&P, PSNH and WMECO entered into agreements in
1985 to support transmission and terminal facilities that were built to import electricity from the Hydro-Québec system in Canada.
CL&P, PSNH and WMECO are obligated to pay, over a 30-year period ending in 2020, their proportionate shares of the annual O&M
expenses and capital costs of those facilities. CL&P, PSNH and WMECO's total cost of these agreements amounted to $10.7 million,
$5.7 million and $2.2 million, respectively, in 2009, $10.5 million, $5.6 million and $2.2 million, respectively, in 2008, and $10.8 million,
$5.8 million and $2.2 million, respectively, in 2007 ($18.6 million in 2009, $18.3 million in 2008, and $18.8 million in 2007 in the
aggregate for NU).
Transmission Segment Project Commitments: These amounts primarily represent commitments for various services and materials
associated with the NEEWS 115 kilovolt (KV) and 345 KV Overhead projects. The remaining amounts are for transmission projects at
PSNH and WMECO.
Yankee Companies Billings: CL&P, PSNH and WMECO have significant decommissioning and plant closure cost obligations to the
Yankee Companies. Each Yankee Company has completed the physical decommissioning of its facility and is now engaged in the
long-term storage of its spent fuel. The Yankee Companies collect decommissioning and closure costs through wholesale, FERC-
approved rates charged under power purchase agreements with several New England utilities, including CL&P, PSNH and WMECO.