Eversource 2013 Annual Report Download - page 18

Download and view the complete annual report

Please find page 18 of the 2013 Eversource annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

6
which were approved by the DPU in May, 2013. However these contracts were terminated on November 6, 2013 by mutual agreement
of the parties. NSTAR Electric expects to meet its merger commitment by issuing a request for proposals to enter into long-term
contracts for additional renewable solar generation.
The following table shows the sources of the 2013 electric franchise retail revenues of NSTAR Electric and WMECO based on
categories of customers:
NSTAR Electric
WMECO
(Thousands of Dollars, except percentages)
2013
% of Total
2013
% of Total
Residential
$
1,066,673
45
$
228,632
57
Commercial(1)
1,181,678
25
131,763
33
Industrial
98,130
29
41,218
10
Other
17,092
1
(882)
-
Total Retail Electric Revenues
$
2,363,573
100%
$
400,731
100%
(1) Commercial retail electric revenue includes Streetlighting and Railroad retail revenue.
A summary of NSTAR Electric’s and WMECO’s retail electric GWh sales and percentage changes for 2013, as compared to 2012, is as
follows:
NSTAR Electric
WMECO
2013
2012
Percentage
Change
2013
2012
Percentage
Change
Residential
6,831
6,741
1.3 %
1,544
1,517
1.7 %
Commercial(1)
13,163
13,115
0.4 %
1,496
1,503
(0.4)%
Industrial
1,312
1,353
(3.0)%
643
663
(3.0)%
Total
21,306
21,209
0.5 %
3,683
3,683
- %
(1) Commercial retail electric GWh sales include Streetlighting and Railroad retail sales.
Rates
NSTAR Electric and WMECO are each subject to regulation by the DPU, which has jurisdiction over, among other things, rates,
accounting procedures, certain dispositions of property and plant, mergers and consolidations, issuances of long-term securities,
acquisition of securities, standards of service and construction and operation of facilities. The present general rate structure for both
NSTAR Electric and WMECO consists of various rate and service classifications covering residential, commercial and industrial
services. Massachusetts utilities are entitled under state law to charge rates that are sufficient to allow them an opportunity to recover
their reasonable operation and capital costs, to attract needed capital and maintain their financial integrity, while also protecting relevant
public interests.
Under Massachusetts law, all customers of each of NSTAR Electric and WMECO are entitled to choose their energy suppliers, while
NSTAR Electric or WMECO, as the case may be, remains their distribution company. Both NSTAR Electric and WMECO purchase
power from competitive suppliers for, and pass through the cost to, their respective customers who do not choose a competitive energy
supplier (basic service). Basic service charges are adjusted and reconciled on an annual basis. Most of the residential and small
commercial and industrial customers of NSTAR Electric and WMECO have continued to buy their power from NSTAR Electric or
WMECO, as the case may be, at basic service rates. Most large commercial and industrial customers have switched to a competitive
energy supplier.
The Cape Light Compact, an inter-governmental organization consisting of the 21 towns and two counties on Cape Cod and Martha’s
Vineyard, serves 200,000 customers through the delivery of energy efficiency programs, effective consumer advocacy, competitive
electricity supply and green power options. NSTAR Electric continues to provide electric service to these customers including the
delivery of power, meter reading, billing, and customer service.
NSTAR Electric continues to supply approximately 46 percent of its customer load at basic service rates while the other 54 percent of
its customer load has migrated to competitive energy suppliers. WMECO continues to supply approximately 49 percent of its customer
load at basic service rates while the other 51 percent of its customer load has migrated to competitive energy suppliers. Because
customer migration is limited to energy supply service, it has no impact on the delivery business or operating income of NSTAR and
WMECO.
The rates established by the DPU for NSTAR Electric and WMECO are comprised of the following:
• A basic service charge that represents the collection of energy costs, including costs related to charge-offs of uncollected
energy costs. Electric distribution companies in Massachusetts are required to obtain and resell power to retail customers
through basic service for those who choose not to buy energy from a competitive energy supplier. Basic service rates are
reset every six months (every three months for large commercial and industrial customers). Additionally, the DPU has
authorized NSTAR Electric to recover the cost of its Dynamic Pricing Smart Grid Pilot Program through the basic service
charge. Basic service costs are reconciled annually.