National Grid 2005 Annual Report Download - page 22

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LONG TERM
The Company’s total capital requirements consist of amounts for its construction programs, work-
ing capital needs and maturing debt issues. Construction expenditure levels for the energy delivery
business are generally consistent from year to year.
The following table summarizes estimated long-term contractual cash obligations of the Company:
OTHER REGULATORY MATTERS
Regional Transmission Organizations
Midwest. GridAmerica manages a range of electricity transmission operations on behalf of its three
participant utilities. It is the first multi-system independent transmission company and was formed
under agreements with Ameren, First Energy, Northern Indiana Public Service Company and the
Midwest Independent System Operator (MISO), which was approved by FERC to operate as an
RTO.
During April 2005, Ameren notified the Company’s electricity transmission business and its fellow
GridAmerica participants that it will withdraw from GridAmerica effective November 1, 2005.
Together with FirstEnergy and Northern Indiana Public Service Company, the Company evaluated
GridAmerica’s viability given the current industry environment, their respective long-term corporate
strategies and Ameren’s departure, and ultimately agreed to cease GridAmerica operations also
effective November 1, 2005.
NEW YORK PSC MATTERS
The New York PSC has issued orders that will or may have an impact on Niagara Mohawk.
Pension settlement loss
In July 2004, Niagara Mohawk obtained PSC approval that would provide rate recovery for
approximately $14 million of the $30 million pension settlement loss incurred in fiscal 2003. In
addition, the agreement covers the funding of the entire settlement loss to benefit plan trust funds.
Niagara Mohawk has filed a petition with the PSC seeking recovery of a $21 million pension settle-
ment loss incurred in fiscal year 2004. For further discussion of the settlement losses see
Footnote G – “Employee Benefits” of the Consolidated Financial Statements.
Pension and post-retirement benefits costs
In August 2003, the New York State PSC approved a settlement with Niagara Mohawk
following an audit that identified reconciliation issues between the rate allowance and actual
costs of Niagara Mohawk’s pension and other post-retirement benefits. The settlement resolved all
issues associated with those obligations for the period prior to its acquisition by National Grid and,
among other things, covered the funding of Niagara Mohawk’s pension and post-retirement bene-
fit plans. As part of the settlement, Niagara Mohawk provided $100 million of tax-deductible fund-
22
National Grid USA / Annual Report
Payment due in:
($'s in millions) 2006 2007 2008 2009 2010 Thereafter Total
Long-term debt 568$ 302$ 207$ 687$ 357$ 2,113$ 4,234$
Electric purchase power commitments 1,745 1,064 1,050 1,065 869 3,057 8,850
Gas supply commitments 255 114 52 5 5 10 441
Derivative swap commitments* 204 196 183 36 - - 619
Expected pension and post-retirement
trust funding** 234 N/A N/A N/A N/A N/A 234
Interest on long-term debt*** 157 119 101 75 54 N/A 506
Construction expenditures**** 608 N/A N/A N/A N/A N/A 608
Total contractual cash obligations 3,771$ 1,795$ 1,593$ 1,868$ 1,285$ 5,180$ 15,492$
* Forecasted, actual amounts could differ based on changes in market conditions.
** These are expected contributions to Company's pension and post-retirement benefit
plans' trusts, not the minimum funding requirement.
*** Forecasted, actual amounts could differ based on changes in market conditions.
Amounts beyond five years are not forecasted.
**** Budgeted amount in which substantial commitments have been made. Amounts
beyond 1 year are budgetary in nature and not contractual obligations and are therefore
not included.