Eversource 2010 Annual Report Download - page 125

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The environmental reserve related to these sites is as follows:
As of December 31,
2010 2009
NU CL&P PSNH WMECO NU CL&P PSNH WMECO
Remediation or long-term
monitoring phase $ 30.3 $ 0.8 $ 8.8 $ 0.2 $ 18.4 $ 0.5 $ 5.0 $ 0.2
Preliminary site assessment stage 6.5 1.9 0.1 0.1 7.3 2.1 0.2 0.2
Some site assessment completed 0.3 0.1 - - 0.3 0.1 0.1 -
Total $ 37.1 $ 2.8 $ 0.3 $ 0.3 $ 26.0 $ 2.7 $ 5.3 0.4
The majority of the accruals for sites in remediation or long-term monitoring relate to MGP sites that were operated several decades
ago and produced manufacturing gas from coal, which resulted in certain byproducts in the environment that may pose a risk to human
health and the environment.
As of December 31, 2010, for 8 environmental sites (3 for CL&P, 2 for PSNH, and 1 for WMECO) that are included in the Company's
reserve for environmental costs, the information known and nature of the remediation options at those sites allow for the Company to
estimate the range of losses for environmental costs. As of December 31, 2010, $8.4 million ($1.5 million for CL&P, $0.7 million for
PSNH, and $0.1 million for WMECO) had been accrued as a liability for these sites, which represent management's best estimates of
the liabilities for environmental costs. These amounts are the best estimates within estimated ranges of losses from $4.5 million to $25
million ($1.3 million to $5.7 million for CL&P, zero to $4.1 million for PSNH, and zero to $8.7 million for WMECO). For the 50 remaining
sites (14 for CL&P, 16 for PSNH, and 8 for WMECO) that comprise the remaining $28.7 million of the environmental reserve ($1.3
million for CL&P, $8.4 million for PSNH and $0.2 million for WMECO), determining an estimated range of loss is not possible at this
time.
As of December 31, 2010, in addition to the sites identified above, there were 12 sites (7 for CL&P, 2 for PSNH, and 2 for WMECO) for
which there are unasserted claims; however, any related site assessment or remediation costs are not probable or estimable at this
time.
HWP: HWP, a subsidiary of NU, continues to investigate the potential need for additional remediation at a river site in Massachusetts
containing tar deposits associated with a MGP site that HWP sold to HG&E, a municipal utility, in 1902. HWP shares responsibility for
site remediation with HG&E and has conducted substantial investigative and remediation activities. The cumulative expense recorded
to the reserve for this site since 1994 through December 31, 2010 was $19.5 million, of which $16.6 million had been spent, leaving
$2.9 million in the reserve as of December 31, 2010. For the years ended December 31, 2010, 2009 and 2008, pre-tax charges of $2.6
million, $1.1 million and $3 million, respectively, were recorded to reflect estimated costs associated with the site. HWP's share of the
costs related to this site is not recoverable from customers.
In 2008, the MA DEP issued a letter to HWP and HG&E, representing guidance rather than a mandate, providing conditional
authorization for additional investigatory and risk characterization activities and indicating that further removal of tar in certain areas was
needed. HWP implemented several supplemental studies to further delineate and assess tar deposits in conformity with the MA DEP's
guidance letter.
In 2010, HWP delivered a report to the MA DEP describing the results of its site investigation studies and testing. Subsequent
communications and discussions with the MA DEP have focused on the course of action to achieve resolution of these matters, and are
ongoing.
The $2.9 million reserve balance as of December 31, 2010 represents estimated costs that HWP considers probable over the
remaining life of the project, including testing and related costs in the near term and field activities to be agreed upon with the MA DEP,
further studies and long-term monitoring that are expected to be required by the MA DEP, and certain soft tar remediation activities.
Various factors could affect management's estimates and require an increase to the reserve, which would be reflected as a charge to
Net Income. Although a material increase to the reserve is not presently anticipated, management cannot reasonably estimate
potential additional investigation or remediation costs because these costs would depend, among other things, on the nature, extent
and timing of additional investigation and remediation that may be required by the MA DEP.
CERCLA: CERCLA and its amendments or state equivalents impose joint and several strict liabilities, regardless of fault, upon
generators of hazardous substances resulting in removal and remediation costs and environmental damages. Liabilities under these
laws can be material and in some instances may be imposed without regard to fault or for past acts that may have been lawful at the
time they occurred. Of the total sites included in the remediation and long-term monitoring phase, 5 sites (3 for PSNH, 2 for CL&P, and
1 for WMECO) are superfund sites under CERCLA for which the Company has been notified that it is a potentially responsible party but
for which the site assessment and remediation are not being managed by the Company. As of December 31, 2010, a liability of $0.7
million ($0.4 million for CL&P, $0.3 million for PSNH, and a de minimis amount for WMECO) accrued on these sites represents
management's best estimate of its potential remediation costs with respect to these superfund sites.
Environmental Rate Recovery: PSNH and Yankee Gas have rate recovery mechanisms for environmental costs. CL&P recovers a
certain level of environmental costs currently in rates but does not have an environmental cost recovery tracking mechanism.
Accordingly, changes in CL&P's environmental reserves impact CL&P's Net Income. WMECO does not have a separate regulatory