Eversource 2013 Annual Report Download - page 118

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contamination at the site, the extent of NU, CL&P, NSTAR Electric, PSNH and WMECO's responsibility or the extent of remediation
required, recently enacted laws and regulations or a change in cost estimates due to certain economic factors.
The amounts recorded as environmental liabilities included in Other Current Liabilities and Other Long-Term Liabilities on the balance
sheets represent management's best estimate of the liability for environmental costs, and take into consideration site assessment,
remediation and long-term monitoring costs. The environmental liability also takes into account recurring costs of managing hazardous
substances and pollutants, mandated expenditures to remediate previously contaminated sites and any other infrequent and non-
recurring clean-up costs. A reconciliation of the activity in the environmental reserves is as follows:
(Millions of Dollars)
NU (1)
CL&P
NSTAR Electric
PSNH
WMECO
Balance as of January 1, 2012
$
31.7
$
2.9
$
1.3
$
6.6
$
0.3
Liabilities Assumed from Merger with NSTAR
11.8
-
-
-
-
Additions
4.7
1.3
0.7
0.2
0.5
Payments/Reductions
(8.8)
(0.5)
(0.3)
(1.9)
(0.2)
Balance as of December 31, 2012
39.4
3.7
1.7
4.9
0.6
Additions
3.5
0.2
0.2
1.0
-
Payments/Reductions
(7.5)
(0.5)
(0.7)
(0.5)
(0.2)
Balance as of December 31, 2013
$
35.4
$
3.4
$
1.2
$
5.4
$
0.4
(1) NSTAR amounts were included in NU beginning April 10, 2012.
These liabilities are estimated on an undiscounted basis and do not assume that any amounts are recoverable from insurance
companies or other third parties. The environmental reserves include sites at different stages of discovery and remediation and do not
include any unasserted claims.
It is possible that new information or future developments could require a reassessment of the potential exposure to related
environmental matters. As this information becomes available, management will continue to assess the potential exposure and adjust
the reserves accordingly.
The number of environmental sites and reserves related to these sites for which remediation or long-term monitoring, preliminary site
work or site assessment are being performed are as follows:
As of December 31, 2013 As of December 31, 2012
Reserve
Reserve
Number of Sites
(in millions)
Number of Sites
(in millions)
NU
68
$
35.4
77
$
39.4
CL&P
18
3.4
19
3.7
NSTAR Electric
12
1.2
16
1.7
PSNH
15
5.4
16
4.9
WMECO
5
0.4
6
0.6
Included in the NU number of sites and reserve amounts above are former MGP sites that were operated several decades ago and
manufactured gas from coal and other processes, which resulted in certain by-products remaining in the environment that may pose a
potential risk to human health and the environment. The reserve balance related to these former MGP sites was $31.4 million and
$34.5 million as of December 31, 2013 and 2012, respectively, and relates primarily to the natural gas business segment.
As of December 31, 2013, for 6 environmental sites (2 for PSNH, and 1 for WMECO) that are included in the Company's reserve for
environmental costs, the information known and nature of the remediation options at those sites allow for the Company to estimate the
range of losses for environmental costs. As of December 31, 2013, $5.8 million ($0.7 million for PSNH) had been accrued as a liability
for these sites, which represent management's best estimates of the liabilities for environmental costs. These amounts are the best
estimates with estimated ranges of additional losses from zero to $30 million (zero to $4.2 million for PSNH, and zero to $8.6 million for
WMECO).
As of December 31, 2013, for 20 environmental sites (4 for CL&P, 1 for NSTAR Electric, 3 for PSNH, and 2 for WMECO) that are
included in the Company’s reserve for environmental costs, management cannot reasonably estimate the exposure to loss in excess of
the reserve, or range of loss, as these sites are under investigation and/or there is significant uncertainty as to what remedial actions, if
any, the Company may be required to undertake. As of December 31, 2013, $16.7 million ($1.6 million for CL&P, $0.1 million for
PSNH, and $0.3 million for WMECO) had been accrued as a liability for these sites. As of December 31, 2013, for the remaining 42
environmental sites (14 for CL&P, 11 for NSTAR Electric, 10 for PSNH, and 2 for WMECO) that are included in the Company’s reserve
for environmental costs, the $12.9 million accrual ($1.8 million for CL&P, $1.2 million for NSTAR Electric, $4.6 million for PSNH, and
$0.1 million for WMECO) represents management’s best estimate of the liability and no additional loss is anticipated.
CERCLA: The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and its
amendments or state equivalents impose joint and several strict liabilities, regardless of fault, upon generators of hazardous substances
resulting in removal and remediation costs and environmental damages. Liabilities under these laws can be material and in some
instances may be imposed without regard to fault or for past acts that may have been lawful at the time they occurred. Of the 68 sites,
10 sites (2 for CL&P, 3 for NSTAR Electric, 4 for PSNH and 1 for WMECO) are superfund sites under CERCLA for which the Company
has been notified that it is a potentially responsible party but for which the site assessment and remediation are not being managed by