Eversource 2013 Annual Report Download - page 29

17
Massachusetts’ RPS program also requires electricity suppliers to meet renewable energy standards. For 2013, the requirement was
15.1 percent, and will ultimately reach 27.1 percent in 2020. NSTAR Electric and WMECO are permitted to recover any costs incurred
in complying with RPS from its customers through rates. WMECO also owns renewable solar generation resources. The RECs
generated from WMECO’s solar units are sold to other energy suppliers and the proceeds from these sales are credited back to
customers.
Hazardous Materials Regulations
Prior to the last quarter of the 20th century, when environmental best practices laws and regulations were implemented, utility
companies often disposed of residues from operations by depositing or burying them on-site or disposing of them at off-site landfills or
other facilities. Typical materials disposed of include coal gasification byproducts, fuel oils, ash, and other materials that might contain
polychlorinated biphenyls or that otherwise might be hazardous. It has since been determined that deposited or buried wastes, under
certain circumstances, could cause groundwater contamination or create other environmental risks. We have recorded a liability for
what we believe, based upon currently available information, is our estimated environmental investigation and/or remediation costs for
waste disposal sites for which we expect to bear legal liability. We continue to evaluate the environmental impact of our former disposal
practices. Under federal and state law, government agencies and private parties can attempt to impose liability on us for these
practices. As of December 31, 2013, the liability recorded by us for our reasonably estimable and probable environmental remediation
costs for known sites needing investigation and/or remediation, exclusive of recoveries from insurance or from third parties, was
approximately $35.4 million, representing 68 sites. These costs could be significantly higher if remediation becomes necessary or
when additional information as to the extent of contamination becomes available.
The most significant liabilities currently relate to future clean-up costs at former MGP facilities. These facilities were owned and
operated by our predecessor companies from the mid-1800's to mid-1900's. By-products from the manufacture of gas using coal
resulted in fuel oils, hydrocarbons, coal tar, purifier wastes, metals and other waste products that may pose risks to human health and
the environment. We, through our subsidiaries, currently have partial or full ownership responsibilities at former MGP sites that have a
reserve balance of $31.4 million of the total $35.4 million as of December 31, 2013. Predominantly all of these MGP costs are
recoverable from customers through our rates.
Electric and Magnetic Fields
For more than twenty years, published reports have discussed the possibility of adverse health effects from electric and magnetic fields
(EMF) associated with electric transmission and distribution facilities and appliances and wiring in buildings and homes. Although weak
health risk associations reported in some epidemiology studies remain unexplained, most researchers, as well as numerous scientific
review panels, considering all significant EMF epidemiology and laboratory studies, have concluded that the available body of scientific
information does not support the conclusion that EMF affects human health.
In accordance with recommendations of various regulatory bodies and public health organizations, we reduce EMF associated with new
transmission lines by the use of designs that can be implemented without additional cost or at a modest cost. We do not believe that
other capital expenditures are appropriate to minimize unsubstantiated risks.
Global Climate Change and Greenhouse Gas Emission Issues
Global climate change and greenhouse gas emission issues have received an increased focus from state governments and the federal
government. The EPA initiated a rulemaking addressing greenhouse gas emissions and, on December 7, 2009, issued a finding that
concluded that greenhouse gas emissions are "air pollution" that endanger public health and welfare and should be regulated. The
largest source of greenhouse gas emissions in the U.S. is the electricity generating sector. The EPA has mandated greenhouse gas
emission reporting beginning in 2011 for emissions for certain aspects of our business including stationary combustion, volume of gas
supplied to large customers and fugitive emissions of SF6 gas and methane.
We are continually evaluating the regulatory risks and regulatory uncertainty presented by climate change concerns. Such concerns
could potentially lead to additional rules and regulations that impact how we operate our business, both in terms of the generating
facilities we own and operate as well as general utility operations. These could include federal "cap and trade" laws, carbon taxes, fuel
and energy taxes, or regulations requiring additional capital expenditures at our generating facilities. We expect that any costs of these
rules and regulations would be recovered from customers.
Connecticut, New Hampshire and Massachusetts are each members of the Regional Greenhouse Gas Initiative (RGGI), a cooperative
effort by nine northeastern and mid-Atlantic states, to develop a regional program for stabilizing and reducing CO2 emissions from fossil
fueled electric generating plants. Because CO2 allowances issued by any participating state are usable across all nine RGGI state
programs, the individual state CO2 trading programs, in the aggregate, form one regional compliance market for CO2 emissions. A
regulated power plant must hold CO2 allowances equal to its emissions to demonstrate compliance at the end of a three year
compliance period that began in 2012.
PSNH anticipates that its generating units will emit between two million and four million tons of CO2 per year, depending on the
capacity factor and the utilization of the respective generation plant, excluding emissions from the operation of PSNH’s Northern Wood
Power Project. New Hampshire legislation provides up to 1.5 million banked CO2 allowances per year for PSNH’s fossil fueled electric
generating plants during the 2012 through 2014 compliance period. PSNH expects to satisfy its remaining RGGI requirements by
purchasing CO2 allowances at auction or in the secondary market. The cost of complying with RGGI requirements is recoverable from