Eversource 2010 Annual Report Download - page 34

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flows. While we believe we have prudently incurred all expenditures to date, we cannot predict the outcome of any prudency reviews
should they occur. Our projected earnings and growth could be adversely affected were the NHPUC to deny recovery of some or all of
PSNH’s investment in the project.
The loss of key personnel or the inability to hire and retain qualified employees could have an adverse effect on our business,
financial condition and results of operations.
Our operations depend on the continued efforts of our employees. Retaining key employees and maintaining the ability to attract new
employees are important to both our operational and financial performance. We cannot guarantee that any member of our
management or any key employee at the NU parent or subsidiary level will continue to serve in any capacity for any particular period of
time. In addition, a significant portion of our workforce, including many workers with specialized skills maintaining and servicing the
electrical infrastructure, will be eligible to retire over the next five to ten years. Such highly skilled individuals cannot be quickly replaced
due to the technically complex work they perform. We have developed strategic workforce plans to identify key functions and
proactively implement plans to assure a ready and qualified workforce, but cannot predict the impact of these plans on our ability to hire
and retain key employees.
Grid disturbances, severe weather, or acts of war or terrorism could negatively impact our business.
Because our generation and transmission systems are part of an interconnected regional grid, we face the risk of possible loss of
business continuity due to a disruption or black-out caused by an event (severe storm, generator or transmission facility outage, solar
storm activity or terrorist action) on an interconnected system or the actions of another utility. In addition, we are subject to the risk that
acts of war or terrorism, including cyber-terrorism could negatively impact the operation of our system. Any such disruption could result
in a significant decrease in revenues and significant additional costs to repair assets, which could have a material adverse impact on
our financial condition, results of operations or cash flows.
Severe weather, such as ice and snow storms, hurricanes and other natural disasters, may cause outages and property damage, which
may require us to incur additional costs that may not be recoverable from customers. The cost of repairing damage to our operating
subsidiaries' facilities and the potential disruption of their operations due to storms, natural disasters or other catastrophic events could
be substantial, particularly as customers demand better and quicker response times to outages. The effect of the failure of our facilities
to operate as planned would be particularly burdensome during a peak demand period, such as during the hot summer months.
Market performance or changes in assumptions could require us to make significant contributions to our pension and other
post-employment benefit plans.
We provide a defined benefit pension plan and other post-retirement benefits for a substantial number of employees, former employees
and retirees. Our future pension obligations, costs and liabilities are highly dependent on a variety of factors beyond our control. These
factors include estimated investment returns, interest rates, health care cost trends, benefit changes, salary increases and the
demographics of plan participants. If our assumptions prove to be inaccurate, our future costs could increase significantly. In 2008 and
2009, due to the financial crisis, the value of our pension assets declined. As a result, we made a contribution of $45 million in 2010
and expect to make an approximate $145 million contribution in 2011. In addition, various factors, including underperformance of plan
investments and changes in law or regulation, could increase the amount of contributions required to fund our pension plan in the
future. Additional large funding requirements, when combined with the financing requirements of our construction program, could
impact the timing and amount of future equity and debt financings and negatively affect our financial position, results of operations or
cash flows.
Costs of compliance with environmental regulations, including climate change legislation, may increase and have an adverse
effect on our business and results of operations.
Our subsidiaries' operations are subject to extensive federal, state and local environmental statutes, rules and regulations that govern,
among other things, air emissions, water discharges and the management of hazardous and solid waste. Compliance with these
requirements requires us to incur significant costs relating to environmental monitoring, installation of pollution control equipment,
emission fees, maintenance and upgrading of facilities, remediation and permitting. The costs of compliance with existing legal
requirements or legal requirements not yet adopted may increase in the future. An increase in such costs, unless promptly recovered,
could have an adverse impact on our business and our financial position, results of operations or cash flows.
In addition, global climate change issues have received an increased focus from federal and state governments, which could potentially
lead to additional rules and regulations that impact how we operate our business, both in terms of the power plants we own and operate
as well as general utility operations. Although we would expect that any costs of these rules and regulations would be recovered from
customers, their impact on energy use by customers and the ultimate impact on our business would be dependent upon the specific
rules and regulations adopted and cannot be determined at this time. The impact of these additional costs to customers could lead to a
further reduction in energy consumption resulting in a decline in electricity and gas sales in our service territories, which would have an
adverse impact on our business and financial position, results of operations or cash flows.
Any failure by us to comply with environmental laws and regulations, even if due to factors beyond our control, or reinterpretations of
existing requirements, could also increase costs. Existing environmental laws and regulations may be revised or new laws and
regulations seeking to protect the environment may be adopted or become applicable to us. Revised or additional laws could result in
significant additional expense and operating restrictions on our facilities or increased compliance costs, which may not be fully