Eversource 2013 Annual Report Download - page 17

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Expense/revenue reconciliation amounts for the electric generation services charge and the FMCC are recovered in subsequent rates.
CL&P, jointly with UI, has entered into four CfDs for a total of approximately 787 MW of capacity consisting of three electric generation
units and one demand response project. The capacity CfDs extend through 2026 and obligate the utilities to pay the difference
between a set price and the value that the generation units receive in the ISO-NE markets. The contracts have terms of up to 15 years
beginning in 2009 and are subject to a sharing agreement with UI, whereby UI will have a 20 percent share of the costs and benefits of
these contracts. CL&P's portion of the costs and benefits of these contracts will be paid by or refunded to CL&P's customers through
the FMCC charge. The amounts of these payments are subject to changes in capacity and forward reserve prices that the projects
receive in the ISO-NE capacity markets.
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.
On June 30, 2010, PURA issued a final order in CL&P’s most recent retail distribution rate case approving distribution rates and
establishing CL&P’s authorized distribution regulatory ROE at 9.4 percent.
On March 13, 2012, NU and NSTAR reached a comprehensive settlement agreement with the Connecticut Attorney General and the
Connecticut Office of Consumer Counsel related to the merger. The settlement agreement covered a variety of matters, including a
CL&P base distribution rate freeze until December 1, 2014.
On September 19, 2013, CL&P, along with another Connecticut utility, signed long-term commitments, as required by regulation, 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. On October 23, 2013, PURA issued a final decision accepting the contracts. The
two projects are expected to be operational by the end of 2016.
Sources and Availability of Electric Power Supply
As noted above, CL&P does not own any generation assets and purchases energy to serve its SS and LRS loads from a variety of
competitive sources through periodic requests for proposals. CL&P enters into supply contracts for SS periodically for periods of up to
one year for its residential and small and medium load commercial and industrial customers. CL&P enters into supply contracts for
LRS for larger commercial and industrial customers every three months. Currently, CL&P has contracts in place with various wholesale
suppliers for firm requirements service for 70 percent of its SS loads for the first half of 2014, and has energy contracts in place to self-
supply the remaining 30 percent for the first half of 2014. For the second half of 2014, CL&P has 50 percent of its SS load under
contract with various wholesale suppliers for firm requirements service and energy contracts in place to self-supply 10 percent. CL&P
intends to purchase 20 to 30 percent of the SS load for the second half of 2014 from wholesale suppliers for firm requirements service
and will self-supply the remainder needed. None of the SS load for 2015 has been procured. CL&P has contracts in place for its LRS
loads through the second quarter of 2014, and CL&P intends to purchase 100 percent of the LRS load for the third and fourth quarter of
2014 from wholesale suppliers for firm requirements service.
ELECTRIC DISTRIBUTION – MASSACHUSETTS
NSTAR ELECTRIC COMPANY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
The electric distribution businesses of NSTAR Electric and WMECO consist primarily of the purchase, delivery and sale of electricity to
residential, commercial and industrial customers within their respective franchise service territories. As of December 31, 2013, NSTAR
Electric furnished retail franchise electric service to approximately 1.2 million customers in Boston and 80 surrounding cities and towns
in Massachusetts, including Cape Cod and Martha’s Vineyard, covering an area of 1,702 square miles. WMECO provides retail
franchise electric service to approximately 207,000 retail customers in 59 cities and towns in the western region of Massachusetts,
covering an area of 1,500 square miles. Neither NSTAR Electric nor WMECO owns any fossil or hydro-electric generating facilities,
and each purchases its respective energy requirements from third party suppliers.
In 2009, WMECO was authorized by the DPU to install 6 MW of solar energy generation in its service territory. In October 2010,
WMECO completed development of a 1.8 MW solar generation facility on a site in Pittsfield, Massachusetts, and in December 2011
completed development of a 2.3 MW solar generation facility in Springfield, Massachusetts. On September 4, 2013, the DPU approved
WMECO's proposal to build a third solar generation facility and expand its solar energy portfolio from 6 MW to 8 MW. On October 22,
2013, WMECO announced it would install a 3.9 MW solar generation facility on a site in East Springfield, Massachusetts. The facility is
expected to be completed in mid-2014 with an estimated cost of approximately $15 million. WMECO will sell all energy and other
products from its solar generation facilities into the ISO-NE market. NSTAR Electric does not own any solar generating facilities, but
agreed to enter into long-term contracts for 10 megawatts of solar power in connection with the Department of Energy Resources
settlement agreement that approved the Merger in Massachusetts. NSTAR Electric has entered in two contracts for 5 MW of capacity,