Eversource 2013 Annual Report Download - page 121

109
CL&P, NSTAR Electric, PSNH and WMECO's percentage share of the obligations to support the Yankee Companies under FERC-
approved rate tariffs is the same as their respective ownership percentages in the Yankee Companies. For further information on the
ownership percentages, see Note 1J, "Summary of Significant Accounting Policies - Equity Method Investments," to the financial
statements.
The Yankee Companies have collected or are currently collecting amounts that management believes are adequate to recover the
remaining decommissioning and closure cost estimates for the respective plants. Management believes CL&P, NSTAR Electric 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:
DOE Phase I Damages - In 1998, the Yankee Companies filed separate complaints against the 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
(DOE Phase I Damages). Phase I covered damages for the period 1998 through 2002. Following multiple appeals and cross-appeals
in December 2012, the judgment awarding CYAPC $39.6 million, YAEC $38.3 million and MYAPC $81.7 million became final.
In January 2013, the proceeds from the DOE Phase I Damages Claim were received by the Yankee Companies and transferred to
each Yankee Company’s respective decommissioning trust. As a result of NU's consolidation of CYAPC and YAEC, the financial
statements reflected an increase of $77.9 million in marketable securities for CYAPC and YAEC’s Phase I damage awards that were
invested in the nuclear decommissioning trusts in 2013.
On May 1, 2013, CYAPC, YAEC and MYAPC filed applications with the FERC to reduce rates in their wholesale power contracts
through the application of the DOE proceeds for the benefit of customers. In its June 27, 2013 order, the FERC granted the proposed
rate reductions, and changes to the terms of the wholesale power contracts to become effective on July 1, 2013. In accordance with
the FERC order, CL&P, NSTAR Electric, PSNH and WMECO began receiving the benefit of the DOE proceeds, and the benefits have
been or will be passed on to customers.
DOE Phase II Damages - In December 2007, the Yankee Companies each filed subsequent lawsuits against the DOE seeking
recovery of actual damages incurred in the years following 2001 and 2002 related to the alleged failure of the DOE to provide for a
permanent facility to store spent nuclear fuel generated in years after 2001 for CYAPC and YAEC and after 2002 for MYAPC (DOE
Phase II Damages). On November 18, 2011, the court ordered the record closed in the YAEC case, and closed the record in the
CYAPC and MYAPC cases subject to a limited opportunity of the government to reopen the records for further limited proceedings.
On November 15, 2013, the court issued a final judgment awarding CYAPC $126.3 million, YAEC $73.3 million, and MYAPC $35.8
million. On January 14, 2014, the Yankee Companies received a letter from the U.S. Department of Justice stating that the DOE will
not appeal the court's final judgment. As of December 31, 2013, CL&P, NSTAR Electric, PSNH, WMECO, CYAPC, and YAEC have
not reflected the impact of these expected receivables on their financial statements.
The methodology for applying the DOE Phase II Damages recovered from the DOE for the benefit of customers of CL&P, NSTAR
Electric, PSNH and WMECO will be addressed in FERC rate proceedings.
DOE Phase III Damages - On August 15, 2013, the Yankee Companies each filed subsequent lawsuits against the DOE seeking
recovery of actual damages incurred in the years 2009 through 2012. Responsive pleading from the Department of Justice was filed on
November 18, 2013, and discovery is expected to begin once a protective order is in place.
D. Guarantees and Indemnifications
NU parent provides credit assurances on behalf of its subsidiaries, including CL&P, NSTAR Electric, PSNH and WMECO, in the form of
guarantees in the normal course of business.
NU provided guarantees and various indemnifications on behalf of external parties as a result of the sales of former subsidiaries of NU
Enterprises, with maximum exposures either not specified or not material.
NU also issued a guaranty under which, beginning at the time the Northern Pass Transmission line goes into commercial operation, NU
will guarantee the financial obligations of NPT under the TSA in an amount not to exceed $25 million. NU's obligations under the
guaranty expire upon the full, final and indefeasible payment of the guaranteed obligations.
Management does not anticipate a material impact to Net Income as a result of these various guarantees and indemnifications.