Eversource 2009 Annual Report Download - page 49

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TCAM Rates: On July 24, 2009, the NHPUC approved a transmission cost adjustment mechanism (TCAM) rate of 1.195 cents per
KWh, which is effective August 1, 2009 through June 30, 2010.
ES and SCRC Reconciliation: On an annual basis, PSNH files with the NHPUC an ES/SCRC reconciliation filing for the preceding year.
On May 1, 2009, PSNH filed its 2008 ES/SCRC reconciliation with the NHPUC, whose evaluation includes a prudence review of
PSNH's generation activities. During 2008, ES revenues exceeded ES costs by $20.7 million, and SCRC costs exceeded SCRC
revenues by $6.4 million, resulting in an ES regulatory liability for refunds to customers and a SCRC regulatory asset for costs that will
be recovered from customers. PSNH includes these deferrals in the subsequent ES/SCRC rate calculation as a means of
refunding/recovering these amounts to/from customers in the next ES/SCRC rate period. On December 30, 2009, the NHPUC
approved a settlement on the reconciliation filing that did not have a material adverse impact on PSNH’s earnings, financial position or
cash flows.
Massachusetts:
Customer Rates: On December 30, 2009, the DPU approved rate changes for WMECO's various tracking mechanisms effective
January 1, 2010. On an aggregate basis, these changes resulted in an increase in customer rates of 0.509 cents per KWh, or 3.7
percent. WMECO intends to file a distribution rate case in mid-2010 to be effective January 1, 2011. The distribution rate case will
include a proposal, as required by the DPU, to fully decouple distribution revenues from KWh sales.
Basic Service Rates: In 2009, basic service rates ranged from 8.554 cents per KWh to 11.805 cents per KWh for residential customers,
9.179 cents per KWh to 12.074 cents per KWh for small commercial and industrial customers, and 7.256 cents per KWh to 10.212
cents per KWh for medium and large commercial and industrial customers. Effective January 1, 2010, the rates for all basic service
customers changed to reflect the basic service solicitations conducted by WMECO in November 2009. Basic service rates for
residential customers decreased to 8.257 cents per KWh, rates for small commercial and industrial customers decreased to 8.992 cents
per KWh and rates for medium and large commercial and industrial customers increased to 8.913 cents per KWh.
Transition Cost Reconciliations: On June 2, 2009, the DPU issued a decision on WMECO’s 2007 transition cost reconciliation, which did
not have a material adverse impact on WMECO’s earnings, financial position or cash flows. On July 2, 2009, WMECO filed its 2008
cost reconciliation for transition, transmission, basic/default service, basic/default service adder, and capital projects scheduling list.
The briefing period ended on December 28, 2009. The DPU is expected to issue a decision in 2010. We do not expect the outcome of
the DPU's review of this filing to have a material adverse impact on WMECO's earnings, financial position or cash flows.
Pension Factor Reconciliation Filing: On July 2, 2009, WMECO filed the 2008 reconciliation for its pension factor revenues and expenses.
There is currently no timeline for the DPU's review of this filing. We do not expect the outcome of the DPU's review of this filing to have
a material adverse impact on WMECO's earnings, financial position or cash flows.
Service Quality Performance Assessment: WMECO is subject to service quality (SQ) metrics that measure safety, reliability and
customer service. Any charges incurred for failure to meet these standards are paid by WMECO to customers through a method
approved by the DPU. WMECO will likely be required to pay assessment charges for its 2008 and 2009 reliability performance against
the metrics established for those years, primarily as a result of significant storm activity in 2008 and a power outage impacting
WMECO’s Springfield underground service territory in 2009. WMECO has performed at target for certain other non-storm related
reliability metrics. WMECO filed its 2008 SQ results and assessment calculation with the DPU in March 2009 and will file its 2009
information with the DPU in March 2010. In 2009 and 2008, WMECO recorded estimated pre-tax charges of $0.7 million and $1.3
million, respectively, to Net income for these assessments.
Deferred Contractual Obligations
We have decommissioning and plant closure cost obligations to Connecticut Yankee Atomic Power Company (CYAPC), Yankee Atomic
Electric Company (YAEC) and Maine Yankee Atomic Power Company (MYAPC) (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 our electric utility subsidiaries. These companies recover these
costs through state regulatory commission-approved retail rates. Our percentage share of the obligation to support the Yankee
companies under FERC-approved rate tariffs is the same as our ownership percentage. For further information, see Note 1K,
"Summary of Significant Accounting Policies – Equity Method Investments," to the consolidated financial statements.
The Yankee Companies are currently collecting amounts that we believe are adequate to recover the remaining decommissioning and
closure cost estimates for their respective plants. We believe 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 United States Department of
Energy (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 ruling released on October 4, 2006, 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.