Eversource 1999 Annual Report Download - page 5

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On December 30, 1999, NU paid a dividend of 10 cents a share, its first dividend in 33
months. The next 10-cent quarterly dividend will be paid March 31, 2000.
NUCLEAR
Last year I said one of our major efforts in the nuclear arena would be to return Millstone Station
to service and restore its reputation as being among the best in the industry. The men and
women at Millstone worked tirelessly to bring the plants back on line safely. Millstone unit 2’s
return to service in May benefited the NU system by about $15 million a month in lower
operation and maintenance costs and the elimination of replacement power costs, and added $6
million a month in revenues.
Since July 1999 (after refueling outages at Millstone 3 and Seabrook), all our nuclear plants –
Millstone 3, Millstone 2 and Seabrook – have been operating at a capacity factor of better than
92 percent.
Late in the year we filed our plan with the Connecticut Department of Public Utility Control
(DPUC) for The Connecticut Light and Power Company (CL&P) to divest its nuclear assets. This
fall, the Board of Trustees reached the very difficult decision that we would not seek to buy them
through an unregulated subsidiary, although the law allows us to do so.
In order to be a successful nuclear operator in a deregulated environment, it would be nec-
essary to buy and run several nuclear facilities to take advantage of economies of scale. We
assessed the opportunity for success under this scenario and decided divestiture would best serve
our customers, shareholders and Millstone employees. We will request that the new owner
provide employment protection for the station’s work force.
GENERATING PLANT AUCTIONS
Restructuring legislation in Connecticut and Massachusetts required that CL&P and Western
Massachusetts Electric Company (WMECO) divest their fossil fuel and hydroelectric generating
assets, and auctions were held in both states. In Massachusetts, WMECO completed the sale in
late July of 290 megawatts of non-nuclear generation to Consolidated Edison Energy, Inc. for
$47 million, nearly four times the units’ value. CL&P’s fossil assets were sold to NRG Energy,
Inc., a subsidiary of Northern States Power Company, for $460 million, more than six times
book value. Proceeds from those sales were used to repay debt, strengthening our finances.
In July, Northeast Generation Company, an unregulated NU subsidiary created to
buy and hold generating assets in support of Select Energy’s power sales contracts, won the
bid for hydroelectric generation in Connecticut and Massachusetts, most notably the Northfield
Mountain pumped storage facility, with an offer of $865.5 million. Those plants should serve
as an excellent foundation for our power marketing business.
The settlement we reached with the state of New Hampshire will require that we auction
Public Service Company of New Hampshire’s (PSNH) generating assets, which we anticipate
will happen some time in 2000. The Seabrook nuclear power plant must be auctioned prior to
December 31, 2003.
I want to thank all the NU employees who worked hard over the years to make our
fossil/hydro fleet among the best in the industry. For those who have chosen to stay with the
plants, we wish them well. For those who have chosen to retire, we say thanks, and for those
who have joined our unregulated generation company, we wish you success.