Eversource 2013 Annual Report Download - page 28

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OTHER REGULATORY AND ENVIRONMENTAL MATTERS
General
We are regulated in virtually all aspects of our business by various federal and state agencies, including FERC, the SEC, and various
state and/or local regulatory authorities with jurisdiction over the industry and the service areas in which each of our companies
operates, including the PURA, which has jurisdiction over CL&P and Yankee Gas, the NHPUC, which has jurisdiction over PSNH, and
the DPU, which has jurisdiction over NSTAR Electric, NSTAR Gas and WMECO.
Environmental Regulation
We are subject to various federal, state and local requirements with respect to water quality, air quality, toxic substances, hazardous
waste and other environmental matters. Additionally, major generation and transmission facilities may not be constructed or
significantly modified without a review of the environmental impact of the proposed construction or modification by the applicable
federal or state agencies.
Water Quality Requirements
The Clean Water Act requires every "point source" discharger of pollutants into navigable waters to obtain a National Pollutant
Discharge Elimination System (NPDES) permit from the EPA or state environmental agency specifying the allowable quantity and
characteristics of its effluent. States may also require additional permits for discharges into state waters. We are in the process of
maintaining or renewing all required NPDES or state discharge permits in effect for our facilities. In each of the last three years, the
costs incurred by PSNH related to compliance with NPDES and state discharge permits have not been material.
On September 29, 2011, the EPA issued for public review and comment a draft renewal NPDES permit under the Clean Water Act for
PSNH’s Merrimack Station. The draft permit would require PSNH to install a closed-cycle cooling system at the station. The EPA does
not have a set deadline to consider comments and to issue a final permit. Merrimack Station is permitted to continue to operate under
its present permit pending issuance of the final permit and subsequent resolution of matters appealed by PSNH and other parties. Due
to the site specific characteristics of PSNH's other fossil generating stations, we believe it is unlikely that they would face similar
permitting determinations.
Air Quality Requirements
The Clean Air Act Amendments (CAAA), as well as New Hampshire law, impose stringent requirements on emissions of SO2 and NOX
for the purpose of controlling acid rain and ground level ozone. In addition, the CAAA address the control of toxic air pollutants.
Requirements for the installation of continuous emissions monitors and expanded permitting provisions also are included.
In December 2011, the EPA finalized the Mercury and Air Toxic Standards (MATS) that require the reduction of emissions of hazardous
air pollutants from new and existing coal- and oil-fired electric generating units. Previously referred to as the Utility MACT (maximum
achievable control technology) rules, it establishes emission limits for mercury, arsenic and other hazardous air pollutants from coal and
oil-fired units. MATS is the first implementation of a nationwide emissions standard for hazardous air pollutants across all electric
generating units and provides utility companies with up to five years to meet the requirements. PSNH owns and operates
approximately 1,000 MW of fossil fueled electric generating units subject to MATS, including the two units at Merrimack Station,
Newington Station and the two coal units at Schiller Station. We believe the Clean Air Project at our Merrimack Station, together with
existing equipment, will enable the facility to meet the MATS requirements. A review of the potential impact of MATS on our other
PSNH units is not yet complete. Additional incremental controls may be required for the two coal fired units at Schiller Station. To date,
the financial impact of this potential control has not been determined.
Each of the states in which we do business also has Renewable Portfolio Standards (RPS) requirements, which generally require fixed
percentages of our energy supply to come from renewable energy sources such as solar, hydropower, landfill gas, fuel cells and other
similar sources.
New Hampshire’s RPS provision requires increasing percentages of the electricity sold to retail customers to have direct ties to
renewable sources. In 2013, the total RPS obligation was 11.65 percent and it will ultimately reach 24.8 percent in 2025. Energy
suppliers, like PSNH, purchase RECs from producers that generate energy from a qualifying resource and use them to satisfy the RPS
requirements. PSNH also owns renewable sources and uses a portion of internally generated RECs and purchased RECs to meet its
RPS obligations. To the extent that PSNH is unable to purchase sufficient RECs, it makes up the difference between the RECs
purchased and its total obligation by making an alternative compliance payment for each REC requirement for which PSNH is deficient.
The costs of both the RECs and alternative compliance payments are recovered by PSNH through its ES rates charged to customers.
The RECs generated from PSNH’s Northern Wood Power Project, a wood-burning facility, are typically sold to other energy suppliers or
load carrying entities and the net proceeds from the sale of these RECs are credited back to customers.
Similarly, Connecticut's RPS statute requires increasing percentages of the electricity sold to retail customers to have direct ties to
renewable sources. In 2013, the total RPS obligation was 17 percent and will ultimately reach 27 percent in 2020. CL&P is permitted
to recover any costs incurred in complying with RPS from its customers through rates.