Eversource 2013 Annual Report Download - page 120

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Renewable Energy: Renewable energy contracts include non-cancellable commitments under contracts of CL&P, NSTAR Electric,
PSNH, and WMECO for the purchase of energy and capacity from renewable energy facilities. Such contracts have terms extending
for 20 years at CL&P, up to 40 years at NSTAR Electric, up to 30 years for PSNH and 15 years for WMECO.
On September 20, 2013, NSTAR Electric and WMECO, along with two other Massachusetts utilities, signed a long-term commitment,
as required by the DPU, to purchase wind power from six wind farms in Maine and New Hampshire for a combined estimated
generating capacity of approximately 565 MW. On November 21, 2013, the utility companies provided a supplemental filing to the DPU
to reflect the termination of three of the six wind farms. Over the 15-year life of the remaining contracts, the utilities will pay an average
price of less than $0.08 per kWh. On September 19, 2013, CL&P, along with another Connecticut utility, signed long-term
commitments, as required by the PURA, to purchase approximately 250 MW of wind power from a Maine wind farm and 20 MW of solar
power from sites in Connecticut, at a combined average price of less than $0.08 per kWh. The table above does not include these
commitments, as such commitments are contingent on the future construction of the respective energy facilities. The table above also
does not include NSTAR Electric’s commitment to purchase 129 MW of renewable energy from a wind facility to be constructed
offshore and certain other CL&P and NSTAR Electric commitments for the purchase of renewable energy and related products that are
contingent on the future construction of facilities.
Peaker CfDs: In 2008, CL&P entered into three CfDs with developers of peaking generation units approved by the PURA (Peaker
CfDs). These units have a total of approximately 500 MW of peaking capacity. As directed by the PURA, CL&P and UI have entered
into a sharing agreement, whereby CL&P is responsible for 80 percent and UI for 20 percent of the net costs or benefits of these CfDs.
The Peaker CfDs pay the developer the difference between capacity, forward reserve and energy market revenues and a cost-of-
service payment stream for 30 years. The ultimate cost or benefit to CL&P under these contracts will depend on the costs of plant
operation and the prices that the projects receive for capacity and other products in the ISO-NE markets. CL&P's portion of the
amounts paid or received under the Peaker CfDs will be recoverable from or refunded to CL&P's customers.
Natural Gas Procurement: NU’s natural gas distribution businesses have long-term contracts for the purchase, transportation and
storage of natural gas in the normal course of business as part of its portfolio of supplies. These contracts extend through 2029.
Coal, Wood and Other: PSNH has entered into various arrangements for the purchase of wood, coal and the transportation services
for fuel supply for its electric generating assets. Also included in the table above is a contract for capacity on the Portland Natural Gas
Transmission System (PNGTS) pipeline that extends through 2018. The costs on this contract are not recoverable from customers.
Transmission Support Commitments: Along with other New England utilities, CL&P, NSTAR Electric, PSNH and WMECO entered into
agreements in 1985 to support transmission and terminal facilities that were built to import electricity from the Hydro-Québec system in
Canada. CL&P, NSTAR Electric, PSNH and WMECO are obligated to pay, over a 30-year period ending in 2020, their proportionate
shares of the annual operation and maintenance expenses and capital costs of those facilities.
The total costs incurred under these agreements in 2013, 2012, and 2011 were as follows:
NU
For the Years Ended December 31,
(Millions of Dollars)
2013
2012 (1)
2011
Supply and Stranded Cost
$
141.0
$
216.8
$
156.0
Renewable Energy
91.3
48.7
5.1
Peaker CfDs
51.9
59.3
40.2
Natural Gas Procurement
349.8
243.1
191.7
Coal, Wood and Other
112.6
105.2
113.2
Transmission Support Commitments
24.9
24.8
18.1
For the Years Ended December 31,
2013
2012
2011
NSTAR
NSTAR
NSTAR
(Millions of Dollars)
CL&P
Electric
PSNH
WMECO
CL&P
Electric
PSNH
WMECO
CL&P
Electric
PSNH
WMECO
Supply and
Stranded Cost
$
77.6
$
32.4
$
29.0
$
2.0
$
158.2
$
36.3
$
30.5
$
0.9
$
114.9
$
80.9
$
40.8
$
0.3
Renewable Energy
-
84.9
6.4
-
-
60.2
4.1
-
-
61.8
5.1
-
Peaker CfDs
51.9
-
-
-
59.3
-
-
-
40.2
-
-
-
Coal, Wood and Other
-
-
112.6
-
-
-
105.2
-
-
-
113.2
-
Transmission Support
Commitments
9.8
7.7
5.3
2.1
9.6
7.6
5.2
2.0
10.3
8.1
5.6
2.2
(1) NSTAR amounts were included in NU beginning April 10, 2012.
C. Contractual Obligations - Yankee Companies
CL&P, NSTAR Electric, PSNH and WMECO have decommissioning and plant closure cost obligations to the 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 CL&P, NSTAR Electric, PSNH and
WMECO. These companies in turn recover these costs from their customers through state regulatory commission-approved retail
rates.