Eversource 1999 Annual Report Download - page 15

At a 1999 Earth Day ceremony, the U.S. Environmental Protection Agency honored PSNH with an
Environmental Merit Award in recognition of this unique pilot program. With a long-standing
tradition of volunteerism, PSNH employees are leaders in hundreds of community organizations,
making a tremendous impact on the state’s landscape – from economic and community develop-
ment, to environmental protection, education, social services and the arts.
WMECO – BUILDING ON OUR STRENGTHS
In July 1999, WMECO successfully concluded the sale of 290 MW of its fossil fuel and hydroelectric
generating facilities for $47 million to Consolidated Edison Energy, Inc. of New York. The sale
price was 3.8 times greater than the assets’ 1997 book value of $12.5 million. Proceeds from the
sale above book value are being used to reduce WMECO’s stranded costs, which include unrecovered
investments WMECO made under regulation to meet its obligation to serve all customers.
The sale did not include WMECO’s 19 percent interest in the 1,080 MW Northfield Mountain
pumped storage project and related hydroelectric facilities, which were packaged with CL&P’s
ownership share in the facility and sold as a unit later in the year. (See the “Competitive Business”
section of this report for more details.)
In September, the Department of Telecommunications and Energy issued a final restructuring
order allowing the recovery of $785 million in stranded costs. The order allowed the balance on
the decommissioned Millstone 1 plant to be treated as a regulatory asset to be recovered through
a transition charge over a 12-year period.
WMECO has complied with the state-mandated 5 percent rate reduction which went into
effect in September, in accordance with the state’s restructuring legislation. This reduction is in
addition to the mandated reduction of 10 percent that went into effect March 1, 1998.
With its regulatory issues now addressed, WMECO is moving forward aggressively with
growth plans to become the premier electric distribution service provider in Massachusetts. To
achieve this goal, WMECO will strive to maintain and improve customer satisfaction through
operational enhancements and innovations, expand its economic development partnerships,
maintain its commitment to promoting quality of life issues in the communities it serves, and
provide a work environment that fosters employee ownership and pride.
WMECO’s strengths include its modern infrastructure, solid record of reliability, cost-effective
operations, and commitment to economic development of the region’s communities. Through its
involvement in both public and private partnerships at the local and regional level, WMECO con-
tinues to contribute significantly to the economic revitalization and quality of life in its service
area. These partnerships range from urban lighting improvements in the city of Springfield to the
transfer of almost 1,600 acres of land in Montague to the Commonwealth of Massachusetts to
protect endangered species and preserve land for public outdoor recreation.
WMECO continues to be a proponent of energy efficiency throughout its service territory,
offering services totaling about $2.1 million that are expected to save residential customers 8 mil-
lion kilowatt-hours of electricity annually. Similar programs for commercial and industrial customers
are expected to save over 18 million kilowatt-hours of electricity annually.
YES – A STRATEGIC FIT
In June 1999, NU and Yankee Energy System, Inc. (YES) agreed to a merger in which YES will
become a subsidiary of our company. YES formally joined the NU family in March 2000 after
receiving all the necessary legal and regulatory approvals.
The YES acquisition is a strategic fit for our company, and it enables NU to grow its cus-
tomer base in the Northeast while helping to diversify the products and services we offer. By
combining the two companies’ core competencies, we can achieve tactical synergies in such areas
Being part of NU gives Yankee Energy
System the backing it needs for poten-
tial expansion of Yankee’s businesses,
including serving as the platform for
the strategic growth of the natural gas
business. Here, Yankee Gas installs a
new high density polyethylene gas
main to serve a new branch of the
U.S. Postal Service in South Windsor,
Connecticut. The use of plastic pipe
lowers the overall cost of the instal-
lation and maintenance, allowing
Yankee to be more competitive. 13