Eversource 2010 Annual Report Download - page 28

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On September 24, 2010, NU parent entered into a three-year $500 million unsecured revolving credit facility, and CL&P, PSNH,
WMECO, and Yankee Gas jointly entered into a three-year $400 million unsecured revolving credit facility, both replacing five-year
credit facilities on similar terms and conditions that were scheduled to expire on November 6, 2010. Like the previous facility, NU’s new
revolving credit facility allows NU parent to borrow on a short-term or long-term basis, or issue LOCs, up to $500 million in the
aggregate. Under their new revolving credit facility, CL&P and PSNH are each able to draw up to $300 million, with WMECO and
Yankee Gas each able to draw up to $200 million, all subject to the $400 million maximum aggregate borrowing limit.
Our credit facilities and indentures require that NU parent and certain of its subsidiaries, including CL&P, PSNH, WMECO and Yankee
Gas, comply with certain financial and non-financial covenants as are customarily included in such agreements, including maintaining a
ratio of consolidated debt to total capitalization of no more than 65 percent. All such companies currently are, and expect to remain in
compliance with these covenants.
We have annual sinking fund requirements of $4.3 million continuing in 2011 through 2012, the mandatory tender of $62 million of tax-
exempt PCRBs by CL&P on April 1, 2011, at which time CL&P expects to remarket the bonds in the ordinary course. Neither NU nor
any of its subsidiaries have any debt maturities until April 1, 2012.
In light of the 2010 Tax Act and the related cash flow benefits, we are currently reevaluating the timing of our previously planned NU
common equity issuance. If we complete the proposed merger with NSTAR, we would no longer need to undertake the previously
planned $300 million NU common equity issuance in 2012 nor issue any additional equity in the foreseeable future.
NUCLEAR DECOMMISSIONING
General
CL&P, PSNH, WMECO and several other New England electric utilities are stockholders in three inactive regional nuclear generation
companies, CYAPC, MYAPC and YAEC (collectively, the Yankee Companies). The Yankee Companies have completed the physical
decommissioning of their respective generation facilities and are now engaged in the long-term storage of their spent nuclear fuel.
Each Yankee Company collects decommissioning and closure costs through wholesale FERC-approved rates charged under power
purchase agreements with CL&P, PSNH and WMECO and several other New England utilities. These companies in turn recover these
costs from their customers through state regulatory commission-approved retail rates. The ownership percentages of CL&P, PSNH
and WMECO in the Yankee Companies are set forth below:
CL&P PSNH WMECO Total
CYAPC 34.5% 5.0% 9.5% 49.0%
MYAPC 12.0% 5.0% 3.0% 20.0%
YAEC 24.5% 7.0% 7.0% 38.5%
Our share of the obligations to support the Yankee Companies under FERC-approved contracts is the same as the ownership
percentages above.
OTHER REGULATORY AND ENVIRONMENTAL MATTERS
General
We are regulated in virtually all aspects of our business by various federal and state agencies, including the FERC, the SEC, and
various state and/or local regulatory authorities with jurisdiction over the industry and the service areas in which each of our companies
operates, including the DPUC, which has jurisdiction over CL&P and Yankee Gas, the NHPUC, which has jurisdiction over PSNH, and
the DPU, which has jurisdiction over WMECO.
Environmental Regulation
We are subject to various federal, state and local requirements with respect to water quality, air quality, toxic substances, hazardous
waste and other environmental matters. Additionally, our major generation and transmission facilities may not be constructed or
significantly modified without a review of the environmental impact of the proposed construction or modification by the applicable
federal or state agencies. PSNH owns approximately 1,200 MW of generation assets and expects to spend approximately $430 million
on its Clean Air Project, the installation of a wet flue gas desulphurization system at its Merrimack coal station to reduce its mercury and
sulfur dioxide emissions. Compliance with additional environmental laws and regulations, particularly air and water pollution control
requirements may cause changes in operations or require further investments in new equipment at existing facilities.
Water Quality Requirements
The federal Clean Water Act requires every "point source" discharger of pollutants into navigable waters to obtain a NPDES permit from
the EPA or state environmental agency specifying the allowable quantity and characteristics of its effluent. States may also require
additional permits for discharges into state waters. We are in the process of obtaining or renewing all required NPDES or state
discharge permits in effect for our facilities. In each of the last three years, the costs incurred by the Company related to compliance
with NPDES and state discharge permits have not been material. The Company expects to incur additional costs related to these