Eversource 2013 Annual Report Download - page 97

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The Liability Assumed Upon Consolidation of CYAPC and YAEC represents the CYAPC and YAEC ARO fair value as of the merger
date. The fair value of the ARO for CYAPC and YAEC includes uncertainties of the fuel off-load dates related to the DOE’s timing of
performance regarding its obligation to dispose of the spent nuclear fuel and high level waste. The incremental asset recorded as an
offset to the ARO was fully depreciated since the plants have no remaining useful life. Any changes in the assumptions used to
calculate the fair value of the ARO are recorded as an offset to the related regulatory asset. The assets held in the decommissioning
trust are restricted for settling the asset retirement obligation and all other decommissioning obligations. For further information on the
assets held in trust to support this obligation, see Note 6, "Marketable Securities," to the financial statements.
8. SHORT-TERM DEBT
Limits: The amount of short-term borrowings that may be incurred by CL&P, NSTAR Electric and WMECO is subject to periodic
approval by the FERC. On July 31, 2013, the FERC granted authorization to allow CL&P and WMECO to incur total short-term
borrowings up to a maximum of $600 million and $300 million, respectively, effective January 1, 2014 through December 31, 2015. On
May 16, 2012, the FERC granted authorization to allow NSTAR Electric to issue total short-term debt securities in an aggregate
principal amount not to exceed $655 million outstanding at any one time, effective October 23, 2012 through October 23, 2014. As a
result of the NHPUC having jurisdiction over PSNH's short-term debt, PSNH is not currently required to obtain FERC approval for its
short-term borrowings.
PSNH is authorized by regulation of the NHPUC to incur short-term borrowings up to 10 percent of net fixed plant plus an additional
$60 million until further ordered by the NHPUC. As of December 31, 2013, PSNH's short-term debt authorization under the 10 percent
of net fixed plant test plus $60 million totaled approximately $293 million.
CL&P's certificate of incorporation contains preferred stock provisions restricting the amount of unsecured debt that CL&P may incur,
including limiting unsecured indebtedness with a maturity of less than 10 years to 10 percent of total capitalization. In November 2003,
CL&P obtained from its preferred stockholders a waiver of such 10 percent limit for a ten-year period expiring in March 2014, provided
that all unsecured indebtedness does not exceed 20 percent of total capitalization. As of December 31, 2013, CL&P had $776.9 million
of unsecured debt capacity available under this authorization.
Yankee Gas and NSTAR Gas are not required to obtain approval from any state or federal authority to incur short-term debt.
Credit Agreements and Commercial Paper Programs: NU parent, CL&P, PSNH, WMECO, NSTAR Gas and Yankee Gas are parties to
a five-year revolving credit facility. The revolving credit facility is to be used primarily to backstop the commercial paper program at NU,
which commenced July 25, 2012. The commercial paper program allows NU parent to issue commercial paper as a form of short-term
debt. On September 6, 2013, the $1.15 billion revolving credit facility dated July 25, 2012 was amended to increase the aggregate
principal amount available thereunder by $300 million to $1.45 billion, to extend the expiration date from July 25, 2017 to September 6,
2018, and to increase CL&P's borrowing sublimit from $300 million to $600 million. PSNH and WMECO each have borrowing sublimits
of $300 million. On September 6, 2013, NU parent’s $1.15 billion commercial paper program was increased by $300 million to $1.45
billion.
NSTAR Electric has a five-year $450 million revolving credit facility. This facility serves to backstop NSTAR Electric’s existing $450
million commercial paper program. On September 6, 2013, NSTAR Electric amended its revolving credit facility dated July 25, 2012 to
extend the expiration date from July 25, 2017 to September 6, 2018.
On September 6, 2013, the CL&P five-year $300 million revolving credit facility was terminated. As of December 31, 2012, CL&P had
$89 million in borrowings outstanding under this credit agreement with a weighted average interest rate of 3.325 percent.
As of December 31, 2013 and 2012, NU had approximately $1.01 billion and $1.15 billion, respectively, in short-term borrowings
outstanding under the commercial paper program, leaving $435.5 million of available borrowing capacity as of December 31, 2013.
The weighted-average interest rate on these borrowings as of December 31, 2013 and 2012 was 0.24 percent and 0.46 percent,
respectively, which is generally based on money market rates. As of December 31, 2013 and 2012, NSTAR Electric had $103.5 million
and $276 million, respectively, in short-term borrowings outstanding under its commercial paper program, leaving $346.5 million and
$174 million of available borrowing capacity as of December 31, 2013 and 2012, respectively. The weighted-average interest rate on
these borrowings as of December 31, 2013 and 2012 was 0.13 percent and 0.31 percent, respectively, which is generally based on
money market rates.
Amounts outstanding under the commercial paper programs for NU and NSTAR Electric are generally included in Notes Payable and
classified in current liabilities on the balance sheets as all borrowings are outstanding for no more than 364 days at one time. On
January 2, 2014, Yankee Gas issued $100 million of Series L First Mortgage Bonds. A portion of the proceeds was used to pay short-
term borrowings outstanding under the NU commercial paper program. As a result and in accordance with applicable accounting
guidance, $25 million of the NU commercial paper program borrowings have been classified as Long-Term Debt as of December 31,
2013.
As of December 31, 2013 and 2012, there were intercompany loans from NU of $287.3 million and $405.1 million to CL&P, $86.5
million and $63.3 million to PSNH, and zero and $31.9 million to WMECO, respectively. Intercompany loans from NU to CL&P, PSNH
and WMECO are included in Notes Payable to Affiliated Companies and generally classified in current liabilities on the CL&P, PSNH
and WMECO balance sheets. On January 15, 2013, CL&P issued $400 million of Series A First and Refunding Mortgage Bonds. The
proceeds, net of issuance costs, were used to pay short-term borrowings outstanding under the CL&P credit agreement of $89 million