Eversource 2009 Annual Report Download - page 23

15
requirement in 2004, the requirement increases each year. For 2009, the requirement was 12 percent, increasing to 14 percent by
2010, 19.5 percent by 2015 and 27 percent by 2020. Massachusetts’ RPS program required electricity suppliers to meet a 1 percent
renewable energy standard in 2003, which increased to 4 percent for 2009 and has a goal of 15 percent by 2015. Any costs incurred in
complying with RPS would be passed on to customers through rates.
In addition, many states and environmental groups have challenged certain of the federal laws and regulations relating to air emissions
as not being sufficiently strict. As a result, it is possible that state and federal regulations could be developed that will impose more
stringent limitations on emissions than are currently in effect.
Hazardous Materials Regulations
Prior to the last quarter of the 20th century when environmental best practices and laws were implemented, residues from operations
were often disposed of 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, fuel oils, ash, gasoline and other hazardous materials that might contain
polychlorinated biphenyls. It has since been determined that deposited or buried wastes, under certain circumstances, could cause
groundwater contamination or create other environmental risks. We have recorded a liability for what we believe is, based upon
currently available information, our estimated environmental investigation and/or remediation costs for waste disposal sites for which we
expect to bear legal liability. We continue to evaluate the environmental impact of our former disposal practices. Under federal and
state law, government agencies and private parties can attempt to impose liability on us for such past disposal. At December 31, 2009,
the liability recorded by us for our reasonably estimable and probable environmental remediation costs for known sites needing
investigation and/or remediation, exclusive of recoveries from insurance or from third parties, was approximately $26 million,
representing 57 sites. These costs could be significantly higher if remediation becomes necessary or when additional information as to
the extent of contamination becomes available.
The most significant liabilities currently relate to future clean up costs at former manufactured gas plant (MGP) facilities. These facilities
were owned and operated by predecessor companies to us from the mid-1800's to mid-1900's. By-products from the manufacture of
gas using coal resulted in fuel oils, hydrocarbons, coal tar, purifier wastes, metals and other waste products that may pose risks to
human health and the environment. We, through our subsidiaries, currently have partial or full ownership responsibilities at 28 former
MGP sites. Of our total recorded liabilities of $26 million, a reserve of approximately $24.1 million has been established to address
future investigation and/or remediation costs at MGP sites.
HWP Company (HWP), formerly known as Holyoke Water Power Company, a wholly-owned subsidiary of NU, is continuing to evaluate
additional potential remediation requirements at a river site in Massachusetts containing tar deposits associated with an MGP site which
it sold to Holyoke Gas and Electric (HG&E), a municipal electric utility, in 1902. HWP is at least partially responsible for this site and
has already conducted substantial investigative and remediation activities.
The Massachusetts Department of Environmental Protection (MA DEP) issued a letter on April 3, 2008 to HWP and HG&E, which share
responsibility for the site, providing conditional authorization for additional investigatory and risk characterization activities and providing
detailed comments on HWP’s 2007 reports and proposals for further investigations. MA DEP also indicated that further removal of tar
in certain areas was necessary prior to HWP commencing many of the additional studies and evaluation. This letter represents
guidance from the MA DEP, rather than mandates. HWP has developed and implemented site characterization studies to further
delineate tar deposits in conformity with MA DEP’s guidance letter, including estimated costs and schedules. These matters are subject
to ongoing discussions with MA DEP and HG&E and may change from time to time.
HWP first established a reserve for this site in 1994. The cumulative expense recorded to this reserve through December 31, 2009 was
approximately $17 million, of which $15.9 million had been spent, leaving approximately $1.1 million in the reserve as of
December 31, 2009. At this time, we believe that the $1.1 million remaining in the reserve is at the low end of a range of probable and
estimable costs of approximately $1.1 million to $1.8 million and will be sufficient for HWP to evaluate the results of the additional tar
delineation and site characterization studies, evaluate its approach to this matter and conduct certain soft tar remediation. There are
many outcomes that could affect our estimates and require an increase to the reserve for HWP’s costs on this matter, and a reserve
increase would be reflected as a charge to pre-tax earnings. However, we cannot reasonably estimate the range of additional
investigation and remediation costs because they will depend on, among other things, the level and extent of the remaining tar, the
extent of remediation required by the DEP and the related scope and timing, all of which are difficult to estimate because of a number of
uncertainties at this time. Further developments may require a material increase to this reserve.
HWP's share of the remediation costs related to this site is not recoverable from customers.
For further information on environmental liabilities, see Note 7A, "Commitments and Contingencies - Environmental Matters," to the
Consolidated Financial Statements contained in this Annual Report on Form 10-K.
Electric and Magnetic Fields
For more than twenty 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. Although weak
health risk associations reported in some epidemiology studies remain unexplained, most researchers, as well as numerous scientific
review panels, considering all significant EMF epidemiology and laboratory studies, have concluded that the available body of scientific
information does not support the conclusion that EMF affects human health.