Eversource 2009 Annual Report Download - page 157

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These companies in turn recover these costs from their customers through state regulatory commission-approved retail rates. The
table of estimated future annual regulated companies costs above includes the estimated decommissioning and closure costs for the
Yankee Companies. CL&P, PSNH and WMECO's total cost of these billings amounted to $18.2 million, $3.7 million and $5.0 million,
respectively, in 2009, $20 million, $4.4 million and $5.4 million, respectively, in 2008, and $21 million, $6.4 million and $7.6 million,
respectively, in 2007 ($26.9 million in 2009, $29.8 million in 2008, and $35 million in 2007 in the aggregate for NU).
See Note 7D, "Commitments and Contingencies - Deferred Contractual Obligations," to the consolidated financial statements for
information regarding the collection of the Yankee Companies' decommissioning costs.
Clean Air Project Commitments: These amounts represent commitments for engineering, program management services and major
component supply and installation associated with PSNH's coal-fired 440 MW Merrimack Station clean air project, which includes the
addition of a wet scrubber to reduce mercury and SO2 emissions at Merrimack Station Units 1 and 2. The total cost under these
contracts amounted to $107.5 million in 2009, $20.5 million in 2008, and $1.9 million in 2007.
Vehicle/Equipment Commitments: CL&P and Yankee Gas have remaining obligations under master lease agreements that were
terminated by the lessor in November 2008. As a result of the termination, in accordance with the lease agreements, remaining
vehicle/equipment balances for PSNH and WMECO were paid in 2009 totaling $13 million and $6.6 million, respectively. Remaining
balances will be paid by January 2011. At the end of the lease, the lessee company will either purchase the vehicle/equipment or sell it
at auction with the balances paid to the lessor.
NU Enterprises:
Estimated Future Annual NU Enterprises Costs: The estimated future annual costs of NU Enterprises' significant contractual
arrangements are as follows:
(Millions of Dollars) 2010 2011 2012 2013 2014 Thereafter Totals
Select Energy purchase agreements $ 42.8 $ 42.9 $ 40.6 $ 46.6 $ - $ -$ 172.9
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. Most purchase commitments are recorded at their mark-to-market value
with the exception of one nonderivative contract, which is accounted for on the accrual basis.
Select Energy's purchase commitment amounts are reported on a net basis in Fuel, purchased and net interchange power on the
accompanying consolidated statements of income along with certain sales contracts and mark-to-market amounts. Accordingly, the
amount included in Fuel, purchased and net interchange power will be less than the amounts included in the table above. Select
Energy also maintains certain energy commitments whose mark-to-market values have been recorded on the consolidated balance
sheets as Derivative assets and liabilities. These contracts are included in the table above.
D. Deferred Contractual Obligations (CL&P, PSNH, WMECO)
CL&P, PSNH and WMECO have decommissioning and plant closure cost obligations to the Yankee Companies, which have each
completed the physical decommissioning of their respective nuclear facilities and are now engaged in the long-term storage of their
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. These companies recover
these costs through state regulatory commission-approved retail rates.
CL&P, PSNH and WMECO's percentage share of the obligations to support the Yankee Companies under FERC-approved rate tariffs
is the same as their respective ownership percentages in the Yankee Companies. For further information on the ownership
percentages, see Note 1K, "Summary of Significant Accounting Policies - Equity Method Investments," to the consolidated financial
statements.
The Yankee Companies are currently collecting amounts that management believes are adequate to recover the remaining
decommissioning and closure cost estimates for the respective plants. Management believes CL&P and WMECO will recover their
shares of these decommissioning and closure obligations from their customers. PSNH has already recovered its share of these costs
from its customers.
Spent Nuclear Fuel Litigation: In 1998, CYAPC, YAEC and MYAPC filed separate complaints against the DOE in the Court of Federal
Claims seeking monetary damages resulting from the DOE's failure to begin accepting spent nuclear fuel for disposal by January 31,
1998 pursuant to the terms of the 1983 spent fuel and high level waste disposal contracts between the Yankee Companies and the
DOE. In a 2006 ruling, the Court of Federal Claims held that the DOE was liable for damages to CYAPC for $34.2 million through 2001,
YAEC for $32.9 million through 2001 and MYAPC for $75.8 million through 2002. In December 2007, the Yankee Companies each filed
subsequent lawsuits against the DOE seeking recovery of actual damages incurred in the years following 2001/2002.
In December 2006, the DOE appealed the 2006 ruling, and the Yankee Companies filed a cross-appeal. The Court of Appeals issued
its decision on August 7, 2008, effectively agreeing with the trial court's findings as to the liability of the DOE but disagreeing with the
method that the trial court used to calculate damages. The Court of Appeals vacated the decision and remanded the case for new
findings consistent with its decision.