Eversource 2010 Annual Report Download - page 27

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Transmission Rate Base
Under our FERC-approved tariff, transmission projects generally enter rate base once they are placed in commercial operation.
However, 100 percent of the NEEWS projects will enter rate base during their construction period. At the end of 2010, our transmission
rate base was approximately $2.8 billion, including approximately $2.1 billion at CL&P, $341 million at PSNH and $269 million at
WMECO. We forecast that our total transmission rate base will grow to approximately $4.8 billion by the end of 2015, including
approximately $830 million at NPT.
CONSTRUCTION AND CAPITAL IMPROVEMENT PROGRAM
The principal focus of our construction and capital improvement program is maintaining, upgrading and expanding our existing electric
generation, transmission and distribution systems and our natural gas distribution system. Our consolidated capital expenditures in
2010 totaled approximately $1 billion, almost all of which ($967 million) was expended by the Regulated companies. The capital
expenditures of these companies in 2011 are estimated to total approximately $1.2 billion, $477 million by CL&P, $284 million by
PSNH, $287 million by WMECO and $113 million by Yankee Gas. This capital budget includes anticipated costs for all committed
capital projects (i.e., generation, transmission, distribution, environmental compliance and others) and those we expect to become
committed projects in 2011.
In 2010, CL&P’s transmission capital expenditures totaled approximately $107 million, and its distribution capital expenditures totaled
approximately $305 million. For 2011, CL&P projects transmission capital expenditures of approximately $137 million and distribution
capital expenditures of approximately $337 million. During the period 2011 through 2015, CL&P plans to invest approximately $1 billion
in transmission projects, the majority of which will be for NEEWS and $1.9 billon on distribution projects. If all of the distribution and
transmission projects are built as proposed, CL&P’s rate base for electric transmission is projected to increase from approximately $2.1
billion at the end of 2010 to approximately $2.6 billion by the end of 2015, and its rate base for distribution assets is projected to
increase from approximately $2.3 billion to approximately $3.3 billion over the same period.
In 2010, PSNH's transmission capital expenditures totaled approximately $49 million, its distribution capital expenditures totaled
approximately $84 million and its generation capital expenditures totaled $177 million. For 2011, PSNH projects transmission capital
expenditures of approximately $59 million, distribution capital expenditures of approximately $113 million and generation capital
expenditures of approximately $112 million. The bulk of the generation capital expenditures is for the Clean Air Project. During the
period 2011 through 2015, PSNH plans to spend approximately $293 million on transmission projects, approximately $621 million on
distribution projects, and $274 million on generation projects. If all of the distribution, generation and transmission projects are built as
proposed, PSNH’s rate base for electric transmission is projected to increase from approximately $341 million at the end of 2010 to
approximately $540 million by the end of 2015, and its rate base for distribution and generation assets is projected to increase from
approximately $1.2 billion to approximately $1.9 billion over the same period.
In 2010, WMECO's transmission capital expenditures totaled approximately $95 million, its distribution capital expenditures totaled
approximately $33.1 million and solar generation expenditures were $10 million. In 2011, WMECO projects transmission capital
expenditures of approximately $229 million, distribution capital expenditures of approximately $36 million and $22 million on solar
generation. During the period 2011 through 2015, WMECO plans to spend approximately $732 million on transmission projects, with
the bulk of that amount to be spent on GSRP, approximately $194 million on distribution projects and $46 million on solar generation. If
all of the generation, distribution and transmission projects are built as proposed, WMECO’s rate base for electric transmission is
projected to increase from approximately $269 million at the end of 2010 to approximately $803 million by the end of 2015 and its rate
base for distribution and generation assets is projected to increase from approximately $423 million to approximately $488 million over
the same period.
In 2010, Yankee Gas capital expenditures totaled approximately $95 million. For 2011, Yankee Gas projects total capital expenditures
of approximately $113 million, approximately $30 million of which is expected to be related to the WWL project, $37 million related to
basic business activities such as relocation of conflicting gas facilities and the purchase of meters, tools and information technology;
$30 million related to reliability improvements; and $16 million for load growth and new business requests. During the period 2011
through 2015, Yankee Gas plans on making approximately $587 million of capital expenditures, including approximately $30 million on
the WWL project. Future capital spending will likely be affected by price differences between the cost of natural gas with respect to
home heating oil, natural gas supply, new home construction, road reconstruction, regulatory mandates and business requirements.
Excluding non-recurring major projects, NU expects that approximately 28 percent of Yankee Gas’ capital expenditures over the 2011-
2015 period to be related to basic business activities, approximately 28 percent related to load growth and new business, and
approximately 39 percent related to reliability initiatives, with the balance related to the WWL project. If all of Yankee Gas projects are
built as proposed, Yankee Gas’ investment in its regulated assets is projected to increase from approximately $682 million at the end of
2010 to approximately $969 million by the end of 2015.
FINANCING
NU subsidiaries issued a total of $145 million in long-term debt in 2010. On March 8, 2010, WMECO issued $95 million of senior
unsecured notes due March 1, 2020 carrying a coupon rate of 5.1 percent and on April 22, 2010, Yankee Gas issued $50 million of first
mortgage bonds through a private placement with a maturity date of April 1, 2020 carrying a coupon rate of 4.87 percent.
In addition, on April 1, 2010, CL&P completed the remarketing of $62 million of tax-exempt secured PCRBs. The PCRBs carry a
coupon rate of 1.4 percent until April 1, 2011, at which time CL&P expects to remarket the bonds.