Eversource 2009 Annual Report Download - page 27

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Judicial or regulatory proceedings or changes in regulatory or legislative policy could jeopardize completion of, or full
recovery of costs incurred by PSNH in constructing, the Clean Air Project.
Pursuant to New Hampshire law, PSNH is building the Clean Air Project at its Merrimack Station in Bow, New Hampshire. As a result of
an increase in the estimated cost of the project from $250 million to $457 million, several parties initiated legal proceedings challenging
the project. These proceedings, or new legislation, regulations or judicial or regulatory interpretations of applicable law or regulations
could result in the delay or cancelation of this project or add to its cost. Any delay or cancelation of the project would adversely affect
our ability to achieve forecasted levels of earnings. At this time, we cannot predict any legislative or regulatory changes or the outcome
of the pending legal proceedings.
In addition, PSNH’s investment in the project after it is completed is subject to prudence review by the NHPUC at the time the project is
placed in service. A prudence disallowance of a material nature could adversely affect PSNH’s cash flows and results of operations.
While we believe that all expenditures to date have been prudently incurred, we cannot predict the outcome of any prudency reviews
should they occur. Our projected earnings and growth could be adversely affected were the NHPUC to deny recovery of some or all of
PSNH’s investment in the project.
The loss of key personnel or the inability to hire and retain qualified employees could have an adverse effect on our business,
financial condition and results of operations.
Our operations depend on the continued efforts of our employees. Retaining key employees and maintaining the ability to attract new
employees are important to both our operational and financial performance. We cannot guarantee that any member of our
management or any key employee at the NU parent or subsidiary level will continue to serve in any capacity for any particular period of
time. In addition, a significant portion of our workforce, including many workers with specialized skills maintaining and servicing the
electrical infrastructure, will be eligible to retire over the next five to ten years. Such highly skilled individuals cannot be quickly replaced
due to the technically complex work they perform. We have developed strategic workforce plans to identify key functions and
proactively implement plans to assure a ready and qualified workforce, but cannot predict the impact of these plans on our ability to hire
and retain key employees.
Grid disturbances, severe weather, or acts of war or terrorism could negatively impact our business.
Because our generation and transmission systems are part of an interconnected regional grid, we face the risk of possible loss of
business continuity due to a disruption or black-out caused by an event (severe storm, generator or transmission facility outage, or
terrorist action) on an interconnected system or the actions of another utility. In addition, we are subject to the risk that acts of war or
terrorism, including cyber-terrorism could negatively impact the operation of our system. Any such disruption could result in a significant
decrease in revenues and significant additional costs to repair assets, which could have a material adverse impact on our financial
condition and results of operations.
Severe weather, such as ice and snow storms, hurricanes and other natural disasters, may cause outages and property damage which
may require us to incur additional costs that may not be recoverable from customers. The cost of repairing damage to our operating
subsidiaries' facilities and the potential disruption of their operations due to storms, natural disasters or other catastrophic events could
be substantial. The effect of the failure of our facilities to operate as planned would be particularly burdensome during a peak demand
period, such as during the hot summer months.
Market performance or changes in assumptions could require us to make significant contributions to our pension and other
post-employment benefit plans.
We provide a defined benefit pension plan and other post-retirement benefits for a substantial number of employees, former employees
and retirees. The measurement of our expected future pension obligations, costs and liabilities is highly dependent on a variety of
assumptions, most of which relate to factors beyond our control. These assumptions include investment returns, interest rates, health
care cost trends, benefit improvements, salary increases and the demographics of plan participants. If our assumptions prove to be
inaccurate, our future costs could increase significantly. In addition, various factors, including underperformance of plan investments,
could increase the amount of contributions required to fund our pension plan in the future. Large funding requirements, when combined
with the financing requirements of our construction program, could impact the timing and amount of future equity and debt financings
and would negatively affect our financial position, cash flows and results of operations.
Costs of compliance with environmental regulations, including climate change legislation, may increase and have an adverse
effect on our business and results of operations.
Our subsidiaries' operations are subject to extensive federal, state and local environmental statutes, rules and regulations which govern,
among other things, air emissions, water discharges and the management of hazardous and solid waste. Compliance with these
requirements requires us to incur significant costs relating to environmental monitoring, installation of pollution control equipment,
emission fees, maintenance and upgrading of facilities, remediation and permitting. The costs of compliance with existing legal
requirements or legal requirements not yet adopted may increase in the future. An increase in such costs, unless promptly recovered,
could have an adverse impact on our business and our results of operations, financial position and cash flows.