Eversource 2009 Annual Report Download - page 43

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On October 7, 2009, the Internal Revenue Service issued final regulations on the Pension Protection Act (PPA) funding rules, which
allows us to maximize our funding flexibility by using the October 2008 yield curve rate for the January 1, 2009 valuation of pension plan
liabilities. Using the October 2008 yield curve rate, our pension plan funded ratio (the value of plan assets divided by the funding target
in accordance with the requirement of the PPA) was 100 percent as of January 1, 2009. As of January 1, 2010, the fair value of our
pension plan assets increased by $232.8 million to $1.79 billion, and our estimated pension plan funded ratio was 90 percent. We
currently estimate that a contribution of approximately $45 million will be made in the third quarter of 2010 for the purpose of satisfying
benefit obligations accrued during 2009. We will potentially make contributions totaling approximately $200 million in 2011. The actual
amounts of contributions in 2011 and in future plan years will depend on many factors, including the performance of existing plan
assets, valuation of the plan's liabilities, and long-term discount rates.
Business Development and Capital Expenditures
Consolidated: Our consolidated capital expenditures, including amounts incurred but not paid, cost of removal, AFUDC, and the
capitalized portions of pension and PBOP expense or income (all of which are non-cash factors), totaled $969.2 million in 2009,
compared with $1.3 billion in both 2008 and 2007. These amounts included $52.7 million in 2009, $33.2 million in 2008, and $16 million
in 2007 that related to our corporate service companies that support the regulated companies.
Regulated Companies: Capital expenditures for the regulated companies totaled $916.5 million ($446 million for CL&P) in 2009.
Transmission Segment: Transmission segment capital expenditures decreased by $422.5 million in 2009, as compared with 2008, due
primarily to a $423.3 million reduction in expenditures at CL&P, which completed three major transmission projects in southwest
Connecticut in the second half of 2008. A summary of transmission segment capital expenditures by company in 2009, 2008 and 2007
is as follows:
For the Years Ended December 31,
(Millions of Dollars) 2009 2008 2007
CL&P $ 163.0 $586.3 $660.6
PSNH 61.1 81.9 80.7
WMECO 67.7 46.1 * 20.5 *
Totals $ 291.8 $714.3 $761.8
* Includes $1.9 million in 2008 and $1.2 million in 2007 of capital additions of HWP Company (HWP), formerly known as Holyoke Water
Power Company, which were transferred to WMECO in December 2008.
In October 2008, CL&P and WMECO made state siting filings in Connecticut and Massachusetts, respectively, for the first and largest
component of our New England East-West Solutions (NEEWS) project, the Greater Springfield Reliability Project (GSRP). In October
2009, the New England Independent System Operator (ISO-NE) affirmed the need and need date for GSRP. In Connecticut, hearings
have been completed and final briefs were filed in mid-January 2010 with the Connecticut Siting Council (CSC). We believe a final
decision may be received from the CSC as early as March 2010. In Massachusetts, hearings were completed in mid-February 2010
with final briefs expected to be filed in the spring. We expect to receive a final decision from the Energy Facilities Siting Board in the
third quarter of 2010. GSRP, which involves the construction of a 115 kilovolt (KV)/345 KV line from Ludlow, Massachusetts to
Bloomfield, Connecticut, is the largest and most complicated project within NEEWS and is expected to cost approximately $714 million
if built according to our preferred route configuration. Following decisions from the state siting boards, we expect to commence
construction in late 2010 and to place the project in service in 2013.
Our second major NEEWS project is the Interstate Reliability Project, which is being designed and built in coordination with National
Grid USA. CL&P's share of this project includes an approximately 40-mile, 345 KV line from Lebanon, Connecticut to the Connecticut-
Rhode Island border where it would connect with enhancements National Grid USA is designing. We estimate CL&P's share of the
costs of this project will be approximately $250 million. Municipal consultations concluded in November 2008, and CL&P plans to file its
siting application with Connecticut regulators later in 2010, following the completion of ISO-NE’s reassessment of the need date and
issuance of its regional system plan. We currently expect the project to be placed in service in 2014.
The third major part of NEEWS is the Central Connecticut Reliability Project, which involves construction of a new line from Bloomfield,
Connecticut to Watertown, Connecticut. This line would provide another 345 KV connection to move power across the state of
Connecticut. The timing of this project would be six to twelve months behind the Interstate Reliability Project. This project is currently
expected to cost approximately $315 million.
ISO-NE is currently performing an evaluation of all projects in its regional system plan, including the other components of NEEWS, and
assessing the presently estimated need dates for these projects. We expect ISO-NE’s view on need dates for the second and third
major NEEWS projects to be updated in the next version of the regional system plan, which we expect to see as a draft during the third
quarter of 2010.
Included as part of NEEWS are approximately $211 million of associated reliability related expenditures for projects, over $50 million of
which are moving forward through the siting and construction phases and are expected to be completed in advance of the three major
projects. We estimate that CL&P's and WMECO's total capital expenditures for NEEWS will be $1.49 billion. Our current capital